spke-20240630

0001606268-24-000022.txt : 20240801 0001606268-24-000022.hdr.sgml : 20240801 20240801124045 ACCESSION NUMBER: 0001606268-24-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 89 CONFORMED PERIOD OF REPORT: 20240630 FILED AS OF DATE: 20240801 DATE AS OF CHANGE: 20240801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Via Renewables, Inc. CENTRAL INDEX KEY: 0001606268 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] ORGANIZATION NAME: 01 Energy & Transportation IRS NUMBER: 465453215 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36559 FILM NUMBER: 241165465 BUSINESS ADDRESS: STREET 1: 12140 WICKCHESTER LANE STREET 2: SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77079 BUSINESS PHONE: (713) 600-2600 MAIL ADDRESS: STREET 1: 12140 WICKCHESTER LANE STREET 2: SUITE 100 CITY: HOUSTON STATE: TX ZIP: 77079 FORMER COMPANY: FORMER CONFORMED NAME: Spark Energy, Inc. DATE OF NAME CHANGE: 20140423 10-Q 1 spke-20240630.htm 10-Q spke-20240630


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 June 30, 2024

☐ 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

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 3,323,329 shares of Class A common stock, 4,000,000 shares of Class B common stock and 3,567,543 shares of Series A Preferred Stock outstanding as of July 30, 2024.


VIA RENEWABLES, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended June 30, 2024
						Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2024 AND DECEMBER 31, 2023 (unaudited)						4

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (unaudited)						6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (unaudited)						7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (unaudited)						11

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)						12

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS						41
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK						58
ITEM 4. CONTROLS AND PROCEDURES						60
PART II. OTHER INFORMATION						61
ITEM 1. LEGAL PROCEEDINGS						61
ITEM 1A. RISK FACTORS						61




ITEM 6. EXHIBITS						62

SIGNATURES						64

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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 Winter Storm Uri, cash flow generation and liquidity, business strategy, prospects for growth and acquisitions, outcomes of legal proceedings, the timing, availability, ability to pay and amount of cash dividends on our Series A Preferred Stock, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives, beliefs of management, availability and terms of capital, competition, government 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:

•the ultimate impact of the Winter Storm Uri, 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, the margins we achieve, and interest rates;

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

•the impact of extreme and unpredictable weather conditions, including hurricanes, heat waves 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 and covenants in our debt agreements and collateral requirements;

•credit risk with respect to suppliers and customers;

•our ability to acquire customers and actual attrition rates;

•changes in costs to acquire customers;

•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;

•risks related to our recently completed Merger (as defined below) including the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted against us and others relating to the Merger Agreement or otherwise, the impact of the Merger on our operations and the amount of the costs, fees, expenses and charges related to Merger;

•competition; and

•the “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, in our Quarterly Reports on Form 10-Q in “Item 1A — Risk Factors” of this Report, 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

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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

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share counts)

(unaudited)

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	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	53,557	$	42,595
Restricted cash	2,332		—
Accounts receivable, net of allowance for credit losses of $3,684 at June 30, 2024 and $4,496 at December 31, 2023	49,085		63,246
Accounts receivable—affiliates	4,795		4,683
Inventory	2,016		3,124
Fair value of derivative assets, net	4,279		909
Customer acquisition costs, net	6,143		5,154
Customer relationships, net	571		342

Deposits	7,706		6,897
Renewable energy credit asset	17,856		25,456

Other current assets	8,071		6,567
Total current assets	156,411		158,973
Property and equipment, net	4,906		4,710
Fair value of derivative assets, net	503		91
Customer acquisition costs, net	2,438		1,835
Customer relationships, net	130		139
Deferred tax assets	11,078		15,282
Goodwill	120,343		120,343
Other assets	3,861		2,461
Total assets	$	299,670	$	303,834

Liabilities, Series A Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable	$	22,603	$	29,524
Accounts payable—affiliates	269		472
Accrued liabilities	13,558		15,094
Renewable energy credit liability	13,341		15,706
Fair value of derivative liabilities, net	3,105		19,141






Other current liabilities	60		59
Total current liabilities	52,936		79,996
Long-term liabilities:
Fair value of derivative liabilities, net	47		54

Long-term portion of Senior Credit Facility	93,000		97,000






Total liabilities	145,983		177,050
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 outstanding at June 30, 2024 and December 31, 2023	88,050		88,065

Stockholders’ equity:
Common Stock:

Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 3,323,329 shares outstanding at June 30, 2024 and 3,261,620 shares issued and 3,232,701 shares outstanding at December 31, 2023	33		32
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 4,000,000 shares issued and outstanding at June 30, 2024 and December 31, 2023	40		40


Additional paid-in capital	38,488		40,002
Accumulated other comprehensive loss	(40)		(40)
Retained earnings	19,740		8,972
Treasury stock, at cost, 0 and 28,918 shares at June 30, 2024 and December 31, 2023	—		(2,406)
Total stockholders’ equity	58,261		46,600
Non-controlling interest in Spark HoldCo, LLC	7,376		(7,881)
Total equity	65,637		38,719
Total liabilities, Series A Preferred Stock and Stockholders’ equity	$	299,670	$	303,834

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Revenues:
Retail revenues	$	86,960	$	92,621	$	201,348	$	227,746
Net asset optimization expense	(531)		(1,359)		(2,128)		(4,632)
Other revenue	267		137		1,532		137
Total Revenues	86,696		91,399		200,752		223,251
Operating Expenses:
Retail cost of revenues	42,997		45,926		111,959		163,367
General and administrative	20,862		16,713		38,195		33,938
Depreciation and amortization	2,210		1,994		4,250		5,330
Total Operating Expenses	66,069		64,633		154,404		202,635
Operating income	20,627		26,766		46,348		20,616
Other (expense):
Interest expense	(1,743)		(2,447)		(3,672)		(5,144)
Interest and other income	19		7		43		87
Total other expenses	(1,724)		(2,440)		(3,629)		(5,057)
Income before income tax expense	18,903		24,326		42,719		15,559
Income tax expense	3,208		5,240		7,960		3,244
Net income	$	15,695	$	19,086	$	34,759	$	12,315
Less: Net income attributable to non-controlling interests	8,071		11,105		18,568		4,521
Net income attributable to Via Renewables, Inc. stockholders	$	7,624	$	7,981	$	16,191	$	7,794
Less: Dividend on Series A Preferred Stock	2,713		2,640		5,423		5,184
Net income attributable to stockholders of Class A common stock	$	4,911	$	5,341	$	10,768	$	2,610







Net income attributable to Via Renewables, Inc. per share of Class A common stock
Basic	$	1.51	$	1.67	$	3.32	$	0.82
Diluted	$	1.51	$	1.67	$	3.32	$	0.82

Weighted average shares of Class A common stock outstanding
Basic	3,261		3,205		3,247		3,189
Diluted	3,261		3,205		3,247		3,189

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)


Six Months Ended June 30, 2024
	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		Total Stockholders' Equity		Non-controlling Interest		Total Equity


Balance at December 31, 2023	3,262	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	40,002	$	8,972	$	46,600	$	(7,881)	$	38,719
Stock based compensation	—	—	—	—		—		—		—		1,720		—		1,720		—		1,720
Restricted stock unit vesting	62		—	1		—		—		—		(287)		—		(286)		—		(286)
Consolidated net income	—	—	—	—		—		—		—		—		16,191		16,191		18,568		34,759

Contribution for cash settlement / merger	—	—	—	—		—		—		—		—		—		—		643		643
Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(4,495)		(4,495)

Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(5,423)		(5,423)		—		(5,423)

Treasury Shares	—	—	29	—		—		2,406		—		(2406)		—		—		—		—

Changes in ownership interest	—	—	—	—		—		—		—		(541)		—		(541)		541		—
Balance at June 30, 2024	3,324	4,000	—	$	33	$	40	$	—	$	(40)	$	38,488	$	19,740	$	58,261	$	7,376	$	65,637

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

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Three Months Ended June 30, 2024
	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		Total Stockholders' Equity		Non-controlling Interest		Total Equity
Balance at March 31, 2024	3,262	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	40,726	$	14,829	$	53,181	$	2,285	$	55,466


Stock based compensation	—	—	—	—		—		—		—		1,234		—		1,234		—		1,234
Restricted stock unit vesting	62	—	—	1		—		—		—		(287)		—		(286)		—		(286)
Consolidated net income	—	—	—	—		—		—		—		—		7,624		7,624		8,071		15,695
Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(4,402)		(4,402)

Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(2,713)		(2,713)		—		(2,713)
Treasury Shares	—	—	29	—		—		2,406		—		(2,406)		—		—		—		—
Contribution for cash settlement / merger	—	—	—	—		—		—		—		—		—		—		643		643
Changes in Ownership Interest	—	—	—	—		—		—		—		(779)		—		(779)		779		—
Balance at June 30, 2024	3,324	4,000	—	$	33	$	40	$	—	$	(40)	$	38,488	$	19,740	$	58,261	$	7,376	$	65,637

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

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Six Months Ended June 30, 2023
	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		Total Stockholders' Equity		Non-controlling Interest		Total Equity


Balance at December 31, 2022	3,201	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	42,871	$	2,073	$	42,570	$	(14,234)	$	28,336
Stock based compensation	—	—	—	—		—		—		—		1,294		—		1,294		—		1,294
Restricted stock unit vesting	45	—	—	—		—		—		—		(186)		—		(186)		—		(186)
Consolidated net income	—	—	—	—		—		—		—		—		7,794		7,794		4,521		12,315
Stock issued - reverse stock split	14	—	—	—		—		—		—		—		—		—		—		—
Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(4,233)		(4,233)
Dividends paid to Class A common stockholders $0.90625 per share)	—	—	—	—		—		—		—		(2,874)		—		(2,874)		—		(2,874)
Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		(2,544)		(2,640)		(5,184)		—		(5,184)



Changes in ownership interest	—	—	—	—		—		—		—		(2)		—		(2)		2		—
Balance at June 30, 2023	3,260	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	38,559	$	7,227	$	43,412	$	(13,944)	$	29,468

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

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Three Months Ended June 30, 2023
	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		Total Stockholders' Equity		Non-controlling Interest		Total Equity
Balance at March 31, 2023	3,215	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	38,244	$	1,886	$	37,756	$	(24,553)	$	13,203


Stock based compensation	—	—	—	—		—		—		—		613		—		613		—		613
Restricted stock unit vesting	45	—	—	—		—		—		—		(186)		—		(186)		—		(186)
Consolidated net income	—	—	—	—		—		—		—		—		7,981		7,981		11,105		19,086

Distributions paid to non-controlling unit holders	—	—	—	—		—		—		—		—		—		—		(608)		(608)

Dividends paid to Preferred Stockholders	—	—	—	—		—		—		—		—		(2,640)		(2,640)		—		(2,640)


Changes in ownership interest	—	—	—	—		—		—		—		(112)		—		(112)		112		—
Balance at June 30, 2023	3,260	4,000	(29)	$	32	$	40	$	(2,406)	$	(40)	$	38,559	$	7,227	$	43,412	$	(13,944)	$	29,468

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)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	34,759	$	12,315
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense	4,250		5,330
Deferred income taxes	4,204		1,374

Stock based compensation	2,442		1,284
Amortization of deferred financing costs	518		413


Bad debt expense	1,321		1,888
Loss on derivatives, net	1,025		43,437
Current period cash settlements on derivatives, net	(23,192)		(36,667)

Other	123		71
Changes in assets and liabilities:
Decrease in accounts receivable	12,840		31,698
(Increase) decrease in accounts receivable—affiliates	(113)		1,228
Decrease in inventory	1,108		2,482
Increase in customer acquisition costs	(5,026)		(3,263)
Decrease in prepaid and other current assets	7,110		4,937
Increase in customer acquisition costs	(783)		—
(Increase) decrease in other assets	(1,599)		421
Decrease in accounts payable and accrued liabilities	(10,456)		(32,543)
(Decrease) increase in accounts payable—affiliates	(204)		567
Decrease in other current liabilities	—		(257)
Decrease in other non-current liabilities	—		(19)
Net cash provided by operating activities	28,327		34,696
Cash flows from investing activities:
Purchases of property and equipment	(730)		(775)


Net cash used in investing activities	(730)		(775)
Cash flows from financing activities:

Borrowings on notes payable	253,000		153,000
Payments on notes payable	(257,000)		(148,000)
Net paydown on subordinated debt facility	—		(15,000)



Restricted stock vesting	(1,013)		(186)

Contribution for cash settlement of merger	643		—
Payment of dividends to Class A common stockholders	—		(2,874)
Payment of distributions to non-controlling unitholders	(4,495)		(4,233)
Payment of Preferred Stock dividends	(5,438)		(4,920)

Net cash used in financing activities	(14,303)		(22,213)
Increase in Cash, cash equivalents and Restricted cash	13,294		11,708
Cash, cash equivalents and Restricted cash—beginning of period	42,595		35,351
Cash, cash equivalents and Restricted cash—end of period	$	55,889	$	47,059
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Property and equipment purchase accrual	$	31	$	(4)



Cash paid during the period for:
Interest	$	3,919	$	4,641
Taxes	$	7,329	$	2,218

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. We conduct our 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. Via Wireless is a wholly owned subsidiary of the Company that offers wireless services and equipment to wireless 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, 2023 (the “2023 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, Sole Common Stock Shareholder, and Chief Executive Officer

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

We enter into transactions with and pay certain costs on behalf of affiliates that are commonly controlled by Mr. Maxwell, and these affiliates enter into transactions with and pay certain costs on our behalf. We undertake these

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transactions in order to reduce risk, reduce administrative expense, create economies of scale, create strategic alliances and supply goods and services among these related parties.

These transactions include, but are not limited to, employee benefits provided through the Company’s benefit plans, insurance plans, leased office space, certain administrative salaries, management due diligence, recurring management consulting, and accounting, tax, legal, or technology services. Amounts billed under these arrangements are based on services provided, departmental usage, or headcount, which are considered reasonable by management. As such, the accompanying condensed consolidated financial statements include costs that have been incurred by the Company and then directly billed or allocated to affiliates, and costs that have been incurred by our affiliates and then directly billed or allocated to us, and are recorded net in general and administrative expense on the condensed consolidated statements of operations with a corresponding accounts receivable—affiliates or accounts payable —affiliates, respectively, recorded in the consolidated balance sheets. Additionally, the Company enters into transactions with certain affiliates for sales or purchases of natural gas and electricity, which are recorded in retail revenues, retail cost of revenues, and net asset optimization revenues in the condensed consolidated statements of operations with a corresponding accounts receivable—affiliate or accounts payable—affiliate in the consolidated balance sheets. The allocations and related estimates and assumptions are described more fully in Note 13 “Transactions with Affiliates.”

On June 13, 2024, we consummated the previously announced merger contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 29, 2023, by and among the Company, Retailco, and NuRetailco LLC, a Delaware limited liability company and wholly-owned subsidiary of Retailco (“Merger Sub”), pursuant to which Merger Sub was merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger, following which Mr. Maxwell and his affiliates became the owners of all of the issued and outstanding shares of Class A common stock and Class B common stock. As a result, each share of Class A common stock was converted into the right to receive $11.00 per share at the closing of the Merger (other than certain dissenting shares). As a result of the Merger, all of the Company’s outstanding restricted stock units were converted into $11.00 per share (other than those owned by Mr. Maxwell, which were cancelled for no consideration). Effective as of the end of trading on June 13, 2024, the Class A common stock ceased to trade on NASDAQ.

New Accounting Standards Being Evaluated/Standards Not yet adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in the ASU improve reportable segment disclosures by adding and enhancing annual and interim disclosure requirements, clarifying circumstances in which entities can disclose multiple segment measures of profit or loss, providing new segment disclosure requirements for entities with a single reportable segment, and adding other disclosure requirements. ASU 2023-07 will be effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are evaluating the impact of adoption on our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires enhanced income tax disclosures, particularly related to a reporting entity's effective tax rate reconciliation and income taxes paid. For the rate reconciliation, the update requires additional categories of information about federal, state, and foreign taxes and details about significant reconciling items, subject to a quantitative threshold. Income taxes paid must be similarly disaggregated by federal, state, and foreign based on a quantitative threshold. The ASU will be effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply retrospectively. We are evaluating the impact of adoption on our consolidated financial statements.

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 condensed consolidated financial statements.

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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.

Other revenue is derived from contracts with customers through the provision of wireless and other services and the sale of wireless equipment.

Revenues for electricity and natural gas sales are recognized under the accrual method when our performance obligation to a customer is satisfied, which is the point in time when the product is delivered and control of the product passes 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 12 months. Customers are billed and typically 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 June 30, 2024				Three Months Ended June 30, 2023
	Retail Electricity (c)		Retail Natural Gas		Total Reportable Segments		Retail Electricity (c)		Retail Natural Gas		Total Reportable Segments

Primary markets (a)
New England	$	21,271	$	1,572	$	22,843	$	26,262	$	1,154	$	27,416
Mid-Atlantic	27,514		5,912		33,426		24,181		5,929		30,110
Midwest	6,518		2,107		8,625		6,819		2,515		9,334
Southwest	15,845		6,221		22,066		17,503		8,258		25,761
	$	71,148	$	15,812	$	86,960	$	74,765	$	17,856	$	92,621

Customer type
Commercial	$	9,989	$	11,304	$	21,293	$	9,353	$	11,765	$	21,118
Residential	56,956		8,703		65,659		63,420		12,472		75,892
Unbilled revenue (b)	4,203		(4,195)		8		1,992		(6,381)		(4,389)
	$	71,148	$	15,812	$	86,960	$	74,765	$	17,856	$	92,621

Customer credit risk
POR	$	44,080	$	7,177	$	51,257	$	42,080	$	7,300	$	49,380
Non-POR	27,068		8,635		35,703		32,685		10,556		43,241
	$	71,148	$	15,812	$	86,960	$	74,765	$	17,856	$	92,621


	Reportable Segments
	Six Months Ended June 30, 2024						Six Months Ended June 30, 2023
	Retail Electricity (c)		Retail Natural Gas		Total Reportable Segments		Retail Electricity (c)		Retail Natural Gas		Total Reportable Segments


Primary markets (a)
New England	$	48,610	$	6,197	$	54,807	$	59,149	$	5,067	$	64,216
Mid-Atlantic	58,213		21,167		79,380		51,690		25,275		76,965
Midwest	13,827		9,478		23,305		14,958		12,320		27,278
Southwest	27,827		16,029		43,856		31,795		27,492		59,287
	$	148,477	$	52,871	$	201,348	$	157,592	$	70,154	$	227,746

Customer type
Commercial	$	21,354	$	32,018	$	53,372	$	19,646	$	40,444	$	60,090
Residential	127,904		27,344		155,248		140,657		43,747		184,404
Unbilled revenue (b)	(781)		(6,491)		(7,272)		(2,711)		(14,037)		(16,748)
	$	148,477	$	52,871	$	201,348	$	157,592	$	70,154	$	227,746

Customer credit risk
POR	$	94,369	$	26,646	$	121,015	$	91,223	$	32,354	$	123,577
Non-POR	54,108		26,225		80,333		66,369		37,800		104,169
	$	148,477	$	52,871	$	201,348	$	157,592	$	70,154	$	227,746

Reportable Segments

(a) The primary markets include the following states:

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

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

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

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

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

Reconciliation to Condensed Consolidated Financial Information

A reconciliation of the reportable segment operating revenues to consolidated revenues is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total Reportable Segments Revenue	$	86,960	$	92,621	$	201,348	$	227,746
Net asset optimization expense	(531)		(1,359)		(2,128)		(4,632)
Other Revenue	267		137		1,532		137
Total Revenues	$	86,696	$	91,399	$	200,752	$	223,251

We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the three months ended June 30, 2024 and 2023, our retail revenues included gross receipts taxes of $0.2 million and $0.2 million, respectively, and our retail cost of revenues included gross receipts taxes of $1.3 million and $1.3 million, respectively. During the six months ended June 30, 2024 and 2023, our retail revenues included gross receipt taxes of $0.6 million and $0.5 million, respectively, and our retail cost of revenues included gross receipts taxes of $2.7 million and $2.6 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.

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 credit losses 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 credit losses when the accounts receivable is deemed to be uncollectible.

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A rollforward of our allowance for credit losses for the six months ended June 30, 2024 are presented in the table below (in thousands):




Balance at December 31, 2023	$	(4,496)

Current period credit loss provision	(1,321)
Write-offs	2,191
Recovery of previous write-offs	(58)
Balance at June 30, 2024	$	(3,684)

4. Equity

Non-controlling Interest

We hold an economic interest and are the sole managing member in Spark HoldCo, with affiliates of Mr. Maxwell and majority shareholder 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 June 30, 2024 and December 31, 2023, respectively.


	The Company		Affiliated Owners
June 30, 2024	45.38	%	54.62	%
December 31, 2023	44.92	%	55.08	%

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Net income before taxes allocated to non-controlling interest	$	8,860	$	11,957	$	20,220	$	5,623
Less: Income tax expense allocated to non-controlling interest	789		852		1,652		1,102



Net income attributable to non-controlling interests	$	8,071	$	11,105	$	18,568	$	4,521

Class A Common Stock and Class B Common Stock

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.

As a result of the Merger, on June 13, 2024, Mr. Maxwell and his affiliates became the owners of all of the issued and outstanding shares of Class A common stock and Class B common stock. Effective as of the end of trading on June 13, 2024, the Class A common stock ceased to trade on NASDAQ.

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 and six months ended June 30, 2023, we paid zero and $2.9 million in dividends to the holders of the Company's Class A common stock. This dividend represented a quarterly rate of $0.90625 per share on each share of Class A common stock.

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In April 2023, we announced that our Board of Directors elected to temporarily suspend the quarterly cash dividend on the Class A common stock. During the three and six months ended June 30, 2024, we did not pay dividends to the holders of the Company’s Class A common stock and did not make corresponding distributions to our non-controlling interest holders.

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 and six months ended June 30, 2023, Spark HoldCo made corresponding distributions of zero and $3.6 million to our non-controlling interest holders, respectively.

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 and six months ended June 30, 2024 and 2023 (in thousands, except per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income attributable to Via Renewables, Inc. stockholders	$	7,624	$	7,981	$	16,191	$	7,794
Less: Dividend on Series A Preferred Stock	2,713		2,640		5,423		5,184
Net income attributable to stockholders of Class A common stock	$	4,911	$	5,341	$	10,768	$	2,610

Basic weighted average Class A common shares outstanding	3,261		3,205		3,247		3,189
Basic income per share attributable to stockholders	$	1.51	$	1.67	$	3.32	$	0.82

Net income attributable to stockholders of Class A common stock	$	4,911	$	5,341	$	10,768	$	2,610
Effect of conversion of Class B common stock to shares of Class A common stock	—		—		—		—

Diluted net income attributable to stockholders of Class A common stock	$	4,911	$	5,341	$	10,768	$	2,610

Basic weighted average Class A common shares outstanding	3,261		3,205		3,247		3,189
Effect of dilutive Class B common stock	—		—		—		—


Diluted weighted average shares outstanding	3,261		3,205		3,247		3,189

Diluted income per share attributable to stockholders	$	1.51	$	1.67	$	3.32	$	0.82

The computation of diluted earnings per share for the three and six months ended June 30, 2024 and 2023, respectively, excludes 4.0 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.

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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. 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 June 30, 2024 and December 31, 2023 (in thousands):


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	53,308	$	42,062
Accounts receivable	48,942		62,548

Other current assets