spke-20220331


UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36559

Via Renewables, Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-5453215

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

12140 Wickchester Ln, Suite 100

Houston, Texas 77079

(Address of principal executive offices)

(713) 600-2600

(Registrant's telephone number, including area code)

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


Title of each class	Trading Symbols(s)	Name of exchange on which registered
Class A common stock, par value $0.01 per share	VIA	The NASDAQ Global Select Market
8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share	VIASP	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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

Large accelerated filer ☐ Accelerated filer ☒

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging Growth Company ☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

There were 15,661,371 shares of Class A common stock, 20,000,000 shares of Class B common stock and 3,567,543 shares of Series A Preferred Stock outstanding as of May 3, 2022.


VIA RENEWABLES, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended March 31, 2022
						Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2022 AND DECEMBER 31, 2021 (unaudited)						4

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (unaudited)						5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (unaudited)						6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (unaudited)						8

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)						9

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS						34
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK						49
ITEM 4. CONTROLS AND PROCEDURES						51
PART II. OTHER INFORMATION						52
ITEM 1. LEGAL PROCEEDINGS						52
ITEM 1A. RISK FACTORS						52
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS						52



ITEM 6. EXHIBITS						53

SIGNATURES						55

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Cautionary Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), can be identified by the use of forward-looking terminology including “may,” “should,” “could,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “project,” or other similar words. Forward-looking statements appear in a number of places in this Report. All statements, other than statements of historical fact, included in this Report are forward-looking statements. The forward-looking statements include statements regarding the impacts of COVID-19 and the 2021 severe weather event, cash flow generation and liquidity, business strategy, prospects for growth and acquisitions, outcomes of legal proceedings, ability to pay cash dividends, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives, beliefs of management, availability and terms of capital, competition, governmental regulation and general economic conditions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct.

The forward-looking statements in this Report are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

•evolving risks, uncertainties and impacts relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential for continuing negative impacts of COVID-19 on economies and financial markets;

•the ultimate impact of the 2021 severe weather event, including future benefits or costs related to ERCOT market securitization efforts, and any corrective action by the State of Texas, ERCOT, the Railroad Commission of Texas, or the Public Utility Commission of Texas;

•changes in commodity prices and interest rates;

•the sufficiency of risk management and hedging policies and practices;

•the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;

•federal, state and local regulations, including the industry's ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;

•our ability to borrow funds and access credit markets;

•restrictions in our debt agreements and collateral requirements;

•credit risk with respect to suppliers and customers;

•changes in costs to acquire customers as well as actual attrition rates;

•accuracy of billing systems;

•our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;

•significant changes in, or new changes by, the independent system operators (“ISOs”) in the regions we operate;

•competition; and

•the “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and in our other public filings and press releases.

You should review the risk factors and other factors noted throughout or incorporated by reference in this Report that could cause our actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date of this Report. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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PART I. — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share counts)

(unaudited)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	51,363	$	68,899
Restricted cash	2,417		6,421
Accounts receivable, net of allowance for doubtful accounts of $3,055 at March 31, 2022 and $2,368 at December 31, 2021	65,510		66,676
Accounts receivable—affiliates	3,718		3,819
Inventory	108		1,982
Fair value of derivative assets, net	27,911		3,930
Customer acquisition costs, net	1,401		946
Customer relationships, net	9,893		8,523

Deposits	6,393		6,664
Renewable energy credit asset	21,108		14,691

Other current assets	12,307		14,129
Total current assets	202,129		196,680
Property and equipment, net	4,388		4,261
Fair value of derivative assets, net	1,177		340
Customer acquisition costs, net	853		453
Customer relationships, net	622		5,660
Deferred tax assets	19,967		23,915
Goodwill	120,343		120,343
Other assets	3,269		3,624
Total assets	$	352,748	$	355,276

Liabilities, Series A Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable	$	35,612	$	43,285
Accounts payable—affiliates	437		491
Accrued liabilities	16,822		19,303
Renewable energy credit liability	16,919		13,548
Fair value of derivative liabilities, net	86		4,158






Other current liabilities	503		1,707
Total current liabilities	70,379		82,492
Long-term liabilities:
Fair value of derivative liabilities, net	885		36

Long-term portion of Senior Credit Facility	106,000		135,000
Subordinated debt—affiliates	15,000		—




Other long-term liabilities	—		109
Total liabilities	192,264		217,637
Commitments and contingencies (Note 12)

Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,567,543 shares issued and 3,567,543 shares outstanding at March 31, 2022 and December 31, 2021	87,288		87,288

Stockholders' equity:
Common Stock:

Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 15,804,277 shares issued and 15,659,683 shares outstanding at March 31, 2022 and 15,791,019 shares issued and 15,646,425 shares outstanding at December 31, 2021	158		158
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 20,000,000 shares issued and outstanding at March 31, 2022 and 20,000,000 shares issued and outstanding at December 31, 2021	201		201


Additional paid-in capital	55,209		54,663
Accumulated other comprehensive loss	(40)		(40)
Retained earnings	8,960		776
Treasury stock, at cost, 144,594 shares at March 31, 2022 and December 31, 2021	(2,406)		(2,406)
Total stockholders' equity	62,082		53,352
Non-controlling interest in Spark HoldCo, LLC	11,114		(3,001)
Total equity	73,196		50,351
Total liabilities, Series A Preferred Stock and Stockholders' equity	$	352,748	$	355,276

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2022		2021

Revenues:
Retail revenues	$	128,058	$	113,145
Net asset optimization expense	(904)		(140)
Total Revenues	127,154		113,005
Operating Expenses:
Retail cost of revenues	68,707		122,168
General and administrative	14,935		12,671
Depreciation and amortization	5,184		6,036
Total Operating Expenses	88,826		140,875
Operating income (loss)	38,328		(27,870)
Other (expense)/income:
Interest expense	(1,307)		(1,311)
Interest and other income	48		86
Total other expenses	(1,259)		(1,225)
Income (loss) before income tax expense	37,069		(29,095)
Income tax expense (benefit)	6,044		(1,535)
Net income (loss)	$	31,025	$	(27,560)
Less: Net income (loss) attributable to non-controlling interests	18,052		(19,929)
Net income (loss) attributable to Via Renewables, Inc. stockholders	$	12,973	$	(7,631)
Less: Dividend on Series A Preferred Stock	1,951		1,951
Net income (loss) attributable to stockholders of Class A common stock	$	11,022	$	(9,582)







Net income (loss) attributable to Via Renewables, Inc. per share of Class A common stock
Basic	$	0.70	$	(0.66)
Diluted	$	0.70	$	(0.66)

Weighted average shares of Class A common stock outstanding
Basic	15,656		14,627
Diluted	15,796		14,627

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands)

(unaudited)


Three Months Ended March 31, 2022
	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Retained Earnings (Deficit)		Total Stockholders' Equity		Non-controlling Interest		Total Equity


Balance at December 31, 2021	15,791	20,000	(144)	$	158	$	201	$	(2,406)	$	(40)	$	54,663	$	776	$	53,352	$	(3,001)	$	50,351
Stock based compensation	—	—	—			—		—		—		345		—		345		—		345
Restricted stock unit vesting	13		—	—		—		—		—		(58)		—		(58)		—		(58)
Consolidated net income	—	—	—	—		—		—		—		—		12,973		12,973		18,052		31,025

Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(3,678)		(3,678)
Dividends paid to Class A common stockholders ($0.18125 per share)	—	—	—	—		—		—		—		—		(2,838)		(2,838)		—		(2,838)
Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(1,951)		(1,951)		—		(1,951)



Changes in ownership interest	—	—	—	—		—		—		—		259		—		259		(259)		—
Balance at March 31, 2022	15,804	20,000	(144)	$	158	$	201	$	(2,406)	$	(40)	$	55,209	$	8,960	$	62,082	$	11,114	$	73,196

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Three Months Ended March 31, 2021
	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock	Class A Common Stock		Class B Common Stock		Treasury Stock		Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Retained Earnings (Deficit)		Total Stockholders' Equity		Non-controlling Interest		Total Equity
Balance at December 31, 2020	14,772	20,800	(144)	$	148	$	209	$	(2,406)	$	(40)	$	55,222	$	11,721	$	64,854	$	23,607	$	88,461


Stock based compensation	—	—	—	—		—		—		—		377		—		377		—		377

Consolidated net loss	—	—	—	—		—		—		—		—		(7,631)		(7,631)		(19,929)		(27,560)

Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(6,439)		(6,439)
Dividends paid to Class A common stockholders ($0.18125 per share)	—	—	—	—		—		—		—		(2,651)		—		(2,651)		—		(2,651)
Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(1,951)		(1,951)		—		(1,951)


Changes in ownership interest	—	—	—	—		—		—		—		(44)		—		(44)		44		—
Balance at March 31, 2021	14,772	20,800	(144)	$	148	$	209	$	(2,406)	$	(40)	$	52,904	$	2,139	$	52,954	$	(2,717)	$	50,237

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income (loss)	$	31,025	$	(27,560)
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense	5,184		6,036
Deferred income taxes	3,948		(5,065)

Stock based compensation	351		467
Amortization of deferred financing costs	245		259


Bad debt expense	1,024		(247)
Gain on derivatives, net	(45,063)		(7,024)
Current period cash settlements on derivatives, net	13,136		1,185

Other	43		—
Changes in assets and liabilities:
Decrease in accounts receivable	177		14,926
Decrease (increase) in accounts receivable—affiliates	101		(211)
Decrease in inventory	1,874		1,365
Increase in customer acquisition costs	(1,196)		(213)
Increase in prepaid and other current assets	(833)		(3,012)
Decrease in intangible assets—customer acquisition	—		27
Decrease in other assets	252		254
Decrease in accounts payable and accrued liabilities	(4,320)		(5,271)
(Decrease) increase in accounts payable—affiliates	(54)		433
(Decrease) increase in other current liabilities	(1,203)		41
Decrease in other non-current liabilities	(108)		(22)
Net cash provided by (used in) operating activities	4,583		(23,632)
Cash flows from investing activities:
Purchases of property and equipment	(205)		(520)
Acquisition of Customers	(3,393)		—

Net cash used in investing activities	(3,598)		(520)
Cash flows from financing activities:

Borrowings on notes payable	88,000		191,000
Payments on notes payable	(117,000)		(156,000)
Net borrowings on subordinated debt facility	15,000		10,000



Restricted stock vesting	(58)		—


Payment of dividends to Class A common stockholders	(2,838)		(2,651)
Payment of distributions to non-controlling unitholders	(3,678)		(6,439)
Payment of Preferred Stock dividends	(1,951)		(1,951)

Net cash (used) provided in financing activities	(22,525)		33,959
(Decrease) Increase in Cash, cash equivalents and Restricted cash	(21,540)		9,807
Cash, cash equivalents and Restricted cash—beginning of period	75,320		71,684
Cash, cash equivalents and Restricted cash—end of period	$	53,780	$	81,491
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Property and equipment purchase accrual	$	447	$	23



Cash paid during the period for:
Interest	$	1,073	$	889
Taxes	$	205	$	(361)

The accompanying notes are an integral part of the condensed consolidated financial statements.

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VIA RENEWABLES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Formation and Organization

Organization

We are an independent retail energy services company that provides residential and commercial customers in competitive markets across the United States with an alternative choice for natural gas and electricity. The Company is a holding company whose primary asset consists of units in Spark HoldCo, LLC (“Spark HoldCo”). The Company is the sole managing member of Spark HoldCo, is responsible for all operational, management and administrative decisions relating to Spark HoldCo’s business and consolidates the financial results of Spark HoldCo and its subsidiaries. Spark HoldCo is the direct and indirect owner of the subsidiaries through which we operate our retail energy services. We conduct our retail energy services business through several brands across our service areas, including Electricity Maine, Electricity N.H., Major Energy, Provider Power Massachusetts, Spark Energy, and Verde Energy. Via Energy Solutions (“VES”) is a wholly owned subsidiary of the Company that offers broker services for retail energy customers.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) as it applies to interim financial statements. This information should be read along with our consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). Our unaudited condensed consolidated financial statements are presented on a consolidated basis and include all wholly-owned and controlled subsidiaries. We account for investments over which we have significant influence but not a controlling financial interest using the equity method of accounting. All significant intercompany transactions and balances have been eliminated in the unaudited condensed consolidated financial statements.

In the opinion of the Company's management, the accompanying condensed consolidated financial statements reflect all adjustments that are necessary to fairly present the financial position, the results of operations, the changes in equity and the cash flows of the Company for the respective periods. Such adjustments are of a normal recurring nature, unless otherwise disclosed.

Use of Estimates and Assumptions

The preparation of our condensed consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the period. Actual results could materially differ from those estimates.

Relationship with our Founder, Majority Shareholder, and Chief Executive Officer

W. Keith Maxwell, III (our "Founder") is the Chief Executive Officer, a director and the owner of a majority of the voting power of our common stock through his ownership of NuDevco Retail, LLC ("NuDevco Retail") and Retailco, LLC ("Retailco"). Retailco is a wholly owned subsidiary of TxEx Energy Investments, LLC ("TxEx"), which is wholly owned by Mr. Maxwell. NuDevco Retail is a wholly owned subsidiary of NuDevco Retail

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Holdings LLC ("NuDevco Retail Holdings"), which is a wholly owned subsidiary of Electric HoldCo, LLC, which is also a wholly owned subsidiary of TxEx.

New Accounting Standards Recently Adopted

There have been no changes to our significant accounting policies as disclosed in our 2021 Form 10-K, except as follows:

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform ("ASU 2021-01"), which clarifies the scope and application of certain optional expedients and exceptions regarding the original guidance. The amendments in these ASUs were effective upon issuance and can be applied prospectively through December 31, 2022. The Company's Senior Credit Facility and Series A Preferred Stock Certificate of Designations make reference to a LIBOR rate. The Senior Credit Facility outlines the specific procedures that will be undertaken once an appropriate alternative benchmark is identified. We adopted ASU 2020-04 effective January 1, 2022 and the adoption did not have a material impact on our consolidated financial statements.

Standards Being Evaluated/Standards Not Yet Adopted

The Company considers the applicability and impact of all ASUs. New ASUs were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements.

3. Revenues

Our revenues are derived primarily from the sale of natural gas and electricity to customers, including affiliates. Revenue is measured based upon the quantity of gas or power delivered at prices contained or referenced in the customer's contract, and excludes any sales incentives (e.g. rebates) and amounts collected on behalf of third parties (e.g. sales tax).

Our revenues also include asset optimization activities. Asset optimization activities consist primarily of purchases and sales of gas that meet the definition of trading activities per FASB ASC Topic 815, Derivatives and Hedging. They are therefore excluded from the scope of FASB ASC Topic 606, Revenue from Contracts with Customers.

Revenues for electricity, natural gas, and related services are recognized as the Company transfers the promised goods and services to the customer. Electricity and natural gas products may be sold as fixed-price or variable-price products. The typical length of a contract to provide electricity and/or natural gas is twelve months. Customers are billed and generally pay at least monthly, based on usage. Electricity and natural gas sales that have been delivered but not billed by period end are estimated and recorded as accrued unbilled revenues based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated residential and commercial customer usage. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class (residential or commercial). Estimated amounts are adjusted when actual usage is known and billed.

The following table discloses revenue by primary geographical market, customer type, and customer credit risk profile (in thousands). The table also includes a reconciliation of the disaggregated revenue to revenue by reportable segment (in thousands).

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	Reportable Segments
	Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
	Retail Electricity (a)		Retail Natural Gas		Total Reportable Segments		Retail Electricity		Retail Natural Gas		Total Reportable Segments

Primary markets (b)
New England	$	29,461	$	5,161	$	34,622	$	26,241	$	4,377	$	30,618
Mid-Atlantic	30,419		19,513		49,932		28,550		13,455		42,005
Midwest	9,939		9,620		19,559		11,059		10,238		21,297
Southwest	18,222		5,723		23,945		12,905		6,320		19,225
	$	88,041	$	40,017	$	128,058	$	78,755	$	34,390	$	113,145

Customer type
Commercial	$	11,080	$	20,429	$	31,509	$	15,216	$	11,516	$	26,732
Residential	79,937		22,145		102,082		73,272		26,490		99,762
Unbilled revenue (c)	(2,976)		(2,557)		(5,533)		(9,733)		(3,616)		(13,349)
	$	88,041	$	40,017	$	128,058	$	78,755	$	34,390	$	113,145

Customer credit risk
POR	$	56,176	$	25,510	$	81,686	$	50,850	$	19,600	$	70,450
Non-POR	31,865		14,507		46,372		27,905		14,790		42,695
	$	88,041	$	40,017	$	128,058	$	78,755	$	34,390	$	113,145

(a) Retail Electricity includes Services

(b) The primary markets include the following states:

•New England - Connecticut, Maine, Massachusetts, New Hampshire;

•Mid-Atlantic - Delaware, Maryland (including the District of Colombia), New Jersey, New York and Pennsylvania;

•Midwest - Illinois, Indiana, Michigan and Ohio; and

•Southwest - Arizona, California, Colorado, Florida, Nevada, and Texas.

(c) Unbilled revenue is recorded in total until it is actualized, at which time it is categorized between commercial and residential customers.

We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the three months ended March 31, 2022 and 2021, our retail revenues included gross receipts taxes of $0.3 million and $0.3 million, respectively, and our retail cost of revenues included gross receipts taxes of $1.4 million and $1.2 million, respectively.

Accounts receivables and Allowance for Credit Losses

The Company conducts business in many utility service markets where the local regulated utility purchases our receivables, and then becomes responsible for billing the customer and collecting payment from the customer (“POR programs”). These POR programs result in substantially all of the Company’s credit risk being linked to the applicable utility, which generally has an investment-grade rating, and not to the end-use customer. The Company monitors the financial condition of each utility and currently believes its receivables are collectible.

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In markets that do not offer POR programs or when the Company chooses to directly bill its customers, certain receivables are billed and collected by the Company. The Company bears the credit risk on these accounts and records an appropriate allowance for doubtful accounts to reflect any losses due to non-payment by customers. The Company’s customers are individually insignificant and geographically dispersed in these markets. The Company writes off customer balances when it believes that amounts are no longer collectible and when it has exhausted all means to collect these receivables.

For trade accounts receivables, the Company accrues an allowance for doubtful accounts by business segment by pooling customer accounts receivables based on similar risk characteristics, such as customer type, geography, aging analysis, payment terms, and related macro-economic factors. Expected credit loss exposure is evaluated for each of our accounts receivables pools. Expected credits losses are established using a model that considers historical collections experience, current information, and reasonable and supportable forecasts. The Company writes off accounts receivable balances against the allowance for doubtful accounts when the accounts receivable is deemed to be uncollectible.

A rollforward of our allowance for credit losses for the three months ended March 31, 2022 are presented in the table below (in thousands):




Balance at December 31, 2021	$	(2,368)

Current period bad debt provision	(1,024)
Write-offs	356
Recovery of previous write offs	(19)
Balance at March 31, 2022	$	(3,055)

4. Equity

Non-controlling Interest

We hold an economic interest and are the sole managing member in Spark HoldCo, with affiliates of our Founder holding the remaining economic interests in Spark HoldCo. As a result, we consolidate the financial position and results of operations of Spark HoldCo, and reflect the economic interests owned by these affiliates as a non-controlling interest. The Company and affiliates owned the following economic interests in Spark HoldCo at March 31, 2022 and December 31, 2021, respectively.


	The Company		Affiliated Owners
March 31, 2022	44.14	%	55.86	%
December 31, 2021	44.12	%	55.88	%

The following table summarizes the portion of net income and income tax expense attributable to non-controlling interest (in thousands):


	Three Months Ended March 31,
	2022		2021

Net income (loss) allocated to non-controlling interest	$	19,347	$	(18,321)
Income tax expense allocated to non-controlling interest	1,295		1,608



Net income (loss) attributable to non-controlling interest	$	18,052	$	(19,929)

Class A Common Stock and Class B Common Stock

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Holders of the Company's Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our certificate of incorporation.

Conversion of Class B Common Stock to Class A Common Stock

In July 2021, holders of Class B common stock exchanged 800,000 of their Spark HoldCo units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock at an exchange ratio of one share of Class A common stock for each Spark HoldCo unit (and corresponding share of Class B common stock) exchanged.

Dividends on Class A Common Stock

Dividends declared for the Company's Class A common stock are reported as a reduction of retained earnings, or a reduction of additional paid in capital to the extent retained earnings are exhausted. During the three months ended March 31, 2022, we paid $2.8 million in dividends to the holders of the Company's Class A common stock. This dividend represented a quarterly rate of $0.18125 per share on each share of Class A common stock.

In order to pay our stated dividends to holders of our Class A common stock, our subsidiary, Spark HoldCo is required to make corresponding distributions to holders of its units, including those holders that own our Class B common stock (our non-controlling interest holder). As a result, during the three months ended March 31, 2022, Spark HoldCo made corresponding distributions of $3.6 million to our non-controlling interest holders.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income attributable to stockholders (the numerator) by the weighted-average number of Class A common shares outstanding for the period (the denominator). Class B common shares are not included in the calculation of basic earnings per share because they are not participating securities and have no economic interests. Diluted earnings per share is similarly calculated except that the denominator is increased by potentially dilutive securities.

The following table presents the computation of basic and diluted income per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data):

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	Three Months Ended March 31,
	2022		2021
Net income (loss) attributable to Via Renewables, Inc. stockholders	$	12,973	$	(7,631)
Less: Dividend on Series A Preferred Stock	1,951		1,951
Net income (loss) attributable to stockholders of Class A common stock	$	11,022	$	(9,582)

Basic weighted average Class A common shares outstanding	15,656		14,627
Basic income (loss) per share attributable to stockholders	$	0.70	$	(0.66)

Net income (loss) attributable to stockholders of Class A common stock	$	11,022	$	(9,582)
Effect of conversion of Class B common stock to shares of Class A common stock	—		—

Diluted net income (loss) attributable to stockholders of Class A common stock	$	11,022	$	(9,582)

Basic weighted average Class A common shares outstanding	15,656		14,627
Effect of dilutive Class B common stock	—		—

Effect of dilutive restricted stock units	140		—
Diluted weighted average shares outstanding	15,796		14,627

Diluted income (loss) per share attributable to stockholders	$	0.70	$	(0.66)

The computation of diluted earnings per share for the three months ended March 31, 2022 and 2021, respectively, excludes 20.0 million and 20.8 million shares of Class B common stock because the effect of their conversion was antidilutive. The Company's outstanding shares of Series A Preferred Stock were not included in the calculation of diluted earnings per share because they contain only contingent redemption provisions that have not occurred.

Variable Interest Entity

Spark HoldCo is a variable interest entity due to its lack of rights to participate in significant financial and operating decisions and its inability to dissolve or otherwise remove its management. Spark HoldCo owns all of the outstanding membership interests in each of our operating subsidiaries except VES. We are the sole managing member of Spark HoldCo, manage Spark HoldCo's operating subsidiaries through this managing membership interest, and are considered the primary beneficiary of Spark HoldCo. The assets of Spark HoldCo cannot be used to settle our obligations except through distributions to us, and the liabilities of Spark HoldCo cannot be settled by us except through contributions to Spark HoldCo. The following table includes the carrying amounts and classification of the assets and liabilities of Spark HoldCo that are included in our condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021 (in thousands):

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	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	51,143	$	68,703
Accounts receivable	65,491		66,676

Other current assets	80,148		56,392
Total current assets	196,782		191,771
Non-current assets:
Goodwill	120,343		120,343

Other assets	12,159		16,758
Total non-current assets	132,502		137,101
Total Assets	$	329,284	$	328,872

Liabilities
Current liabilities:
Accounts payable and accrued liabilities	$	52,340	$	62,538



Other current liabilities	47,934		49,328
Total current liabilities	100,274		111,866
Long-term liabilities:
Long-term portion of Senior Credit Facility	106,000		135,000
Subordinated debt — affiliate	15,000		—

Other long-term liabilities	885		145
Total long-term liabilities	121,885		135,145
Total Liabilities	$	222,159	$	247,011

5. Preferred Stock

Holders of the Series A Preferred Stock have no voting rights, except in specific circumstances of delisting or in the case the dividends are in arrears as specified in the Series A Preferred Stock Certificate of Designations. The Series A Preferred Stock accrued dividends at an annual percentage rate of 8.75% through April 14, 2022. The floating rate period for the Series A Preferred Stock began on April 15, 2022. The dividend on the Series A Preferred Stock will accrue at an annual rate equal to the sum of (a) Three-Month LIBOR (if it then exists), or an alternative reference rate as of the applicable determination date and (b) 6.578%, based on the $25.00 liquidation preference per share of the Series A Preferred Stock. The liquidation preference provisions of the Series A Preferred Stock are considered contingent redemption provisions because there are rights granted to the holders of the Series A Preferred Stock that are not solely within our control upon a change in control of the Company. Accordingly, the Series A Preferred Stock is presented between liabilities and the equity sections in the accompanying condensed consolidated balance sheets.We have the option to redeem our Series A Preferred Stock on or after April 15, 2022.

During the three months ended March 31, 2022, we paid $1.9 million in dividends to holders of the Series A Preferred Stock. As of March 31, 2022, we had accrued $2.0 million related to dividends to holders of the Series A Preferred Stock. This dividend was paid on April 15, 2022.

A summary of our preferred equity balance for the three months ended March 31, 2022 is as follows:

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	(in thousands)






Balance at December 31, 2021	$	87,288
Repurchase of Series A Preferred Stock	—
Accumulated dividends on Series A Preferred Stock	—
Balance at March 31, 2022	$	87,288

6. Derivative Instruments

We are exposed to the impact of market fluctuations in the price of electricity and natural gas, basis differences in the price of natural gas, storage charges, renewable energy credits ("RECs"), and capacity charges from independent system operators. We use derivative instruments in an effort to manage our cash flow exposure to these risks. These instruments are not designated as hedges for accounting purposes, and, accordingly, changes in the market value of these derivative instruments are recorded in the cost of revenues. As part of our strategy to optimize pricing in our natural gas related activities, we also manage a portfolio of commodity derivative instruments held for trading purposes. Our commodity trading activities are subject to limits within our Risk Management Policy. For these derivative instruments, changes in the fair value are recognized currently in earnings in net asset optimization revenues.

Derivative assets and liabilities are presented net in our condensed consolidated balance sheets when the derivative instruments are executed with the same counterparty under a master netting arrangement. Our derivative contracts include transactions that are executed both on an exchange and centrally cleared, as well as over-the-counter, bilateral contracts that are transacted directly with third parties. To the extent we have paid or received collateral related to the derivative assets or liabilities, such amounts would be presented net against the related derivative asset or liability’s fair value. As of March 31, 2022 and December 31, 2021, we offset $3.2 million and $0.5 million, respectively, in collateral to net against the related derivative asset and liability's fair value. The specific types of derivative instruments we may execute to manage the commodity price risk include the following:

•Forward contracts, which commit us to purchase or sell energy commodities in the future;

•Futures contracts, which are exchange-traded standardized commitments to purchase or sell a commodity or financial instrument;

•Swap agreements, which require payments to or from counterparties based upon the differential between two prices for a predetermined notional quantity; and

•Option contracts, which convey to the option holder the right but not the obligation to purchase or sell a commodity.

The Company has entered into other energy-related contracts that do not meet the definition of a derivative instrument or for which we made a normal purchase, normal sale election and are therefore not accounted for at fair value including the following:

•Forward electricity and natural gas purchase contracts for retail customer load;

•Renewable energy credits; and

•Natural gas transportation contracts and storage agreements.

Volumes Underlying Derivative Transactions

The following table summarizes the net notional volumes of our open derivative financial instruments accounted for at fair value by commodity. Positive amounts represent net buys while bracketed amounts are net sell transactions (in thousands):

Non-trading

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Commodity

Notional

March 31, 2022

December 31, 2021

Natural Gas

MMBtu

3,807

3,862

Electricity

MWh

1,893

1,785

Trading

Commodity

Notional

March 31, 2022

December 31, 2021

Natural Gas

MMBtu

1,437

1,536

Gains (Losses) on Derivative Instruments

Gains (losses) on derivative instruments, net and current period settlements on derivative instruments were as follows for the periods indicated (in thousands):


	Three Months Ended March 31,
	2022		2021
Gain on non-trading derivatives, net	$	43,916	$	7,054
Gain (loss) on trading derivatives, net	1,147		(30)
Gain on derivatives, net	45,063		7,024
Current period settlements on non-trading derivatives	$	(13,320)	$	(1,189)
Current period settlements on trading derivatives	184		4
Total current period settlements on derivatives	$	(13,136)	$	(1,185)

Gains (losses) on trading derivative instruments are recorded in net asset optimization revenues and gains (losses) on non-trading derivative instruments are recorded in retail cost of revenues on the condensed consolidated statements of operations.

Fair Value of Derivative Instruments

The following tables summarize the fair value and offsetting amounts of our derivative instruments by counterparty and collateral received or paid (in thousands):


	March 31, 2022
Description	Gross Assets		Gross Amounts Offset		Net Assets		Cash Collateral Offset		Net Amount Presented
Non-trading commodity derivatives	$	43,219	$	(12,623)	$	30,596	$	(3,243)	$	27,353
Trading commodity derivatives	1,180		(622)		558		—		558
Total Current Derivative Assets	44,399		(13,245)		31,154		(3,243)		27,911
Non-trading commodity derivatives	1,347		(195)		1,152		—		1,152
Trading commodity derivatives	25		—		25		—		25
Total Non-current Derivative Assets	1,372		(195)		1,177		—		1,177
Total Derivative Assets	$	45,771	$	(13,440)	$	32,331	$	(3,243)	$	29,088


Description	Gross Liabilities		Gross Amounts Offset		Net Liabilities		Cash Collateral Offset		Net Amount Presented
Non-trading commodity derivatives	$	—	$	—	$	—	$	—	$	—
Trading commodity derivatives	(87)		1		(86)		—		(86)
Total Current Derivative Liabilities	(87)		1		(86)		—		(86)
Non-trading commodity derivatives	(1,420)		534		(