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 September 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 October 29, 2024.

1

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

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2024 AND

DECEMBER 31, 2023 (unaudited)

4

| |

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND

NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited)

6

| |

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE

AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited)

7

| |

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE

MONTHS ENDED SEPTEMBER 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

40

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | | 57
ITEM 4. CONTROLS AND PROCEDURES | | 59
PART II. OTHER INFORMATION | | 60
ITEM 1. LEGAL PROCEEDINGS | | 60
ITEM 1A. RISK FACTORS | | 60
ITEM 6. EXHIBITS | | 61
SIGNATURES | | 63

2

Table of Contents

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

3

Table of Contents

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.

4

Table of Contents

PART I. — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share counts)

(unaudited)

5

Table of Contents

| | |
| September 30, 2024 | | December 31, 2023
Assets | | |
Current assets: | | |
Cash and cash equivalents | $66,572 | | $42,595
Restricted cash | 510 | | —

Accounts receivable, net of allowance for credit losses of $3,382 at September 30, 2024 and $4,496 at

December 31, 2023

41,003

63,246

Accounts receivable—affiliates | 4,455 | | 4,683
Inventory | 2,897 | | 3,124
Fair value of derivative assets, net | 952 | | 909
Customer acquisition costs, net | 6,407 | | 5,154
Customer relationships, net | 1,443 | | 342
Deposits | 5,134 | | 6,897
Renewable energy credit asset | 18,024 | | 25,456
Other current assets | 8,351 | | 6,567
Total current assets | 155,748 | | 158,973
Property and equipment, net | 4,989 | | 4,710
Fair value of derivative assets, net | — | | 91
Customer acquisition costs, net | 2,387 | | 1,835
Customer relationships, net | 424 | | 139
Deferred tax assets | 10,852 | | 15,282
Goodwill | 120,343 | | 120,343
Other assets | 3,677 | | 2,461
Total assets | $298,420 | | $303,834
| | |
Liabilities, Series A Preferred Stock and Stockholders' Equity | | |
Current liabilities: | | |
Accounts payable | $20,661 | | $29,524
Accounts payable—affiliates | 481 | | 472
Accrued liabilities | 17,238 | | 15,094
Renewable energy credit liability | 13,855 | | 15,706
Fair value of derivative liabilities, net | 4,091 | | 19,141
Other current liabilities | 60 | | 59
Total current liabilities | 56,386 | | 79,996
Long-term liabilities: | | |
Fair value of derivative liabilities, net | 405 | | 54
Long-term portion of Senior Credit Facility | 89,000 | | 97,000
Total liabilities | 145,791 | | 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 September 30, 2024 and December 31, 2023

88,044

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 September 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 September 30, 2024 and December 31, 2023

40

40

| | |
| | |
Additional paid-in capital | 39,041 | | 40,002
Accumulated other comprehensive loss | (40) | | (40)
Retained earnings | 19,171 | | 8,972
Treasury stock, at cost, 0 and 28,918 shares at September 30, 2024 and December 31, 2023 | — | | (2,406)
Total stockholders’ equity | 58,245 | | 46,600
Non-controlling interest in Spark HoldCo, LLC | 6,340 | | (7,881)
Total equity | 64,585 | | 38,719
Total liabilities, Series A Preferred Stock and Stockholders’ equity | $298,420 | | $303,834

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

6

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

| | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30,
| 2024 | | 2023 | | 2024 | | 2023
Revenues: | | | | | | |
Retail revenues | $94,254 | | $109,753 | | $295,602 | | $337,499
Net asset optimization expense | (482) | | (936) | | (2,610) | | (5,568)
Other revenue | 2 | | 1,422 | | 1,534 | | 1,559
Total Revenues | 93,774 | | 110,239 | | 294,526 | | 333,490
Operating Expenses: | | | | | | |
Retail cost of revenues | 68,617 | | 71,050 | | 180,576 | | 234,417
General and administrative | 17,655 | | 17,135 | | 55,850 | | 51,073
Depreciation and amortization | 2,502 | | 1,816 | | 6,752 | | 7,146
Total Operating Expenses | 88,774 | | 90,001 | | 243,178 | | 292,636
Operating income | 5,000 | | 20,238 | | 51,348 | | 40,854
Other (expense): | | | | | | |
Interest expense | (1,667) | | (2,233) | | (5,339) | | (7,377)
Interest and other income | 16 | | 9 | | 59 | | 96
Total other expenses | (1,651) | | (2,224) | | (5,280) | | (7,281)
Income before income tax expense | 3,349 | | 18,014 | | 46,068 | | 33,573
Income tax expense | 1,694 | | 3,355 | | 9,654 | | 6,599
Net income | $1,655 | | $14,659 | | $36,414 | | $26,974
Less: Net (loss) income attributable to non-controlling interests | (483) | | 7,140 | | 18,085 | | 11,661
Net income attributable to Via Renewables, Inc. stockholders | $2,138 | | $7,519 | | $18,329 | | $15,313
Less: Dividend on Series A Preferred Stock | 2,707 | | 2,708 | | 8,130 | | 7,892

Net (loss) income attributable to stockholders of Class A common

stock

$(569)

$4,811

$10,199

$7,421

| | | | | | |

Net (loss) income attributable to Via Renewables, Inc. per share of

Class A common stock

Basic | $(0.17) | | $1.49 | | $3.12 | | $2.32
Diluted | $(0.17) | | $1.47 | | $3.12 | | $2.29
| | | | | | |
Weighted average shares of Class A common stock outstanding | | | | | | |
Basic | 3,323 | | 3,232 | | 3,272 | | 3,204
Diluted | 3,323 | | 7,232 | | 3,272 | | 7,204

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

7

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands)

(unaudited)

| | | | | | | | | | | |
Nine Months Ended September 30, 2024

Issued

Shares of

Class A

Common

Stock

Issued

Shares of

Class B

Common

Stock

Treasur

y 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

—

—

—

—

—

—

—

—

18,329

18,329

18,085

36,414

Contribution

for cash

settlement /

merger

—

—

—

—

—

—

—

—

—

—

643

643

Distributions

paid to non-

controlling

unit holders

—

—

—

—

—

—

—

—

—

—

(4,495)

(4,495)

Dividends

paid to

Preferred

Stockholders

—

—

—

—

—

—

—

—

(8,130)

(8,130)

—

(8,130)

Treasury

Shares

—

—

29

—

—

2,406

—

(2,406)

—

—

—

—

Changes in

ownership

interest

—

—

—

—

—

—

—

12

—

12

(12)

—

Balance at

September

30, 2024

3,324

4,000

—

$33

$40

$—

$(40)

$39,041

$19,171

$58,245

$6,340

$64,585

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

8

Table of Contents

| | | | | | | | | | | |
Three Months Ended September 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

June 30, 2024

3,324

4,000

—

$33

$40

$—

$(40)

$38,488

$19,740

$58,261

$7,376

$65,637

Consolidated

net income

(loss)

—

—

—

—

—

—

—

—

2,138

2,138

(483)

1,655

Dividends

paid to

Preferred

Stockholders

—

—

—

—

—

—

—

—

(2,707)

(2,707)

—

(2,707)

Changes in

Ownership

Interest

—

—

—

—

—

—

—

553

—

553

(553)

—

Balance at

September 30,

2024

3,324

4,000

—

$33

$40

$—

$(40)

$39,041

$19,171

$58,245

$6,340

$64,585

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

9

Table of Contents

| | | | | | | | | | | |
Nine Months Ended September 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

Accumulat

ed Other

Comprehe

nsive 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

—

—

—

—

—

—

—

1,779

—

1,779

—

1,779

Restricted

stock unit

vesting

47

—

—

—

—

—

—

(186)

—

(186)

—

(186)

Consolidated

net income

—

—

—

—

—

—

—

—

15,313

15,313

11,661

26,974

Stock issued -

reverse stock

split

14

—

—

—

—

—

—

—

—

—

—

—

Distributions

paid to non-

controlling

unit holders

—

—

—

—

—

—

—

—

—

—

(4,308)

(4,308)

Dividends

paid to Class

A common

stockholders

$0.90625 per

share)

—

—

—

—

—

—

—

(2,874)

—

(2,874)

—

(2,874)

Dividends

paid to

Preferred

Stockholders

—

—

—

—

—

—

—

(2,544)

(5,348)

(7,892)

—

(7,892)

Changes in

ownership

interest

—

—

—

—

—

—

—

184

—

184

(184)

—

Balance at

September 30,

2023

3,262

4,000

(29)

$32

$40

$(2,406)

$(40)

$39,230

$12,038

$48,894

$(7,065)

$41,829

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

10

Table of Contents

| | | | | | | | | | | |
Three Months Ended September 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

June 30, 2023

3,260

4,000

(29)

$32

$40

$(2,406)

$(40)

$38,559

$7,227

$43,412

$(13,944)

$29,468

Stock based

compensation

—

—

—

—

—

—

—

485

—

485

—

485

Restricted

stock unit

vesting

2

—

—

—

—

—

—

—

—

—

—

—

Consolidated

net income

—

—

—

—

—

—

—

—

7,519

7,519

7,140

14,659

Distributions

paid to non-

controlling

unit holders

—

—

—

—

—

—

—

—

—

—

(75)

(75)

Dividends

paid to

Preferred

Stockholders

—

—

—

—

—

—

—

—

(2,708)

(2,708)

—

(2,708)

Changes in

ownership

interest

—

—

—

—

—

—

—

186

—

186

(186)

—

Balance at

September 30,

2023

3,262

4,000

(29)

$32

$40

$(2,406)

$(40)

$39,230

$12,038

$48,894

$(7,065)

$41,829

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

11

Table of Contents

VIA RENEWABLES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

| | |
| Nine Months Ended September 30,
| 2024 | | 2023
Cash flows from operating activities: | | |
Net income | $36,414 | | $26,974
Adjustments to reconcile net income to net cash flows provided by operating activities: | | |
Depreciation and amortization expense | 6,752 | | 7,146
Deferred income taxes | 4,430 | | 3,337
Stock based compensation | 2,411 | | 1,784
Amortization of deferred financing costs | 685 | | 619
Bad debt expense | 1,858 | | 2,717
Loss on derivatives, net | 12,647 | | 50,428
Current period cash settlements on derivatives, net | (30,337) | | (51,767)
Other | 181 | | 126
Changes in assets and liabilities: | | |
Decrease in accounts receivable | 20,386 | | 27,473
Decrease in accounts receivable—affiliates | 228 | | 1,886
Decrease in inventory | 227 | | 1,378
Increase in customer acquisition costs | (7,145) | | (4,961)
Decrease in prepaid and other current assets | 9,764 | | 1,895
(Increase) decrease in other assets | (1,519) | | 641
Decrease in accounts payable and accrued liabilities | (8,541) | | (29,334)
Increase in accounts payable—affiliates | 9 | | 797
Decrease in other current liabilities | — | | (264)
Decrease in other non-current liabilities | — | | (18)
Net cash provided by operating activities | 48,450 | | 40,857
Cash flows from investing activities: | | |
Purchases of property and equipment | (1,120) | | (1,144)
Acquisition of Customers | (1,827) | | —
Net cash used in investing activities | (2,947) | | (1,144)
Cash flows from financing activities: | | |
Borrowings on notes payable | 405,000 | | 258,000
Payments on notes payable | (413,000) | | (253,000)
Net paydown on subordinated debt facility | — | | (20,000)
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) | | (4,308)
Payment of Preferred Stock dividends | (8,151) | | (7,559)
Net cash used in financing activities | (21,016) | | (29,927)
Increase in Cash, cash equivalents and Restricted cash | 24,487 | | 9,786
Cash, cash equivalents and Restricted cash—beginning of period | 42,595 | | 35,351
Cash, cash equivalents and Restricted cash—end of period | $67,082 | | $45,137
Supplemental Disclosure of Cash Flow Information: | | |
Non-cash items: | | |
Property and equipment purchase accrual | $7 | | $15
Cash paid during the period for: | | |
Interest | $4,724 | | $6,736
Taxes | $7,376 | | $2,671

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

12

Table of Contents

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 the Company's Class A common stock and Class B common

stock. As a result, each previously outstanding 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: (i) shares of Class A common stock held (a) by the

Company or any subsidiary of the Company, or (b) held or beneficially owned by Mr. Maxwell and any person or

entity controlled by Mr. Maxwell, including Retailco, Merger Sub and NuDevco Retail, LLC (‘‘NuDevco Retail’’),

and 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. The adoption of ASU 2023-07 will

result in additional segment-related footnote disclosures within the notes to the consolidated financial statements.

We do not expect the adoption of ASU 2023-07 to have a material impact on the 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.

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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.

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 September 30, 2024 | | Three Months Ended September 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 | $22,122 | | $984 | | $23,106 | | $30,119 | | $993 | | $31,112
Mid-Atlantic | 32,846 | | 3,529 | | 36,375 | | 32,858 | | 3,478 | | 36,336
Midwest | 8,654 | | 1,221 | | 9,875 | | 9,384 | | 1,089 | | 10,473
Southwest | 18,993 | | 5,905 | | 24,898 | | 25,494 | | 6,338 | | 31,832
| $82,615 | | $11,639 | | $94,254 | | $97,855 | | $11,898 | | $109,753
| | | | | | | | | | |
Customer type | | | | | | | | | | |
Commercial | $13,326 | | $6,458 | | $19,784 | | $11,655 | | $6,577 | | $18,232
Residential | 76,374 | | 5,120 | | 81,494 | | 87,012 | | 5,411 | | 92,423
Unbilled revenue (b) | (7,085) | | 61 | | (7,024) | | (812) | | (90) | | (902)
| $82,615 | | $11,639 | | $94,254 | | $97,855 | | $11,898 | | $109,753
| | | | | | | | | | |
Customer credit risk | | | | | | | | | | |
POR | $52,342 | | $4,307 | | $56,649 | | $55,603 | | $4,078 | | $59,681
Non-POR | 30,273 | | 7,332 | | 37,605 | | 42,252 | | 7,820 | | 50,072
| $82,615 | | $11,639 | | $94,254 | | $97,855 | | $11,898 | | $109,753

| | | | | | | | | | |
| Reportable Segments
| Nine Months Ended September 30, 2024 | | Nine Months Ended September 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 | $70,732 | | $7,181 | | $77,913 | | $89,268 | | $6,060 | | $95,328
Mid-Atlantic | 91,059 | | 24,696 | | 115,755 | | 84,548 | | 28,753 | | 113,301
Midwest | 22,481 | | 10,699 | | 33,180 | | 24,342 | | 13,409 | | 37,751
Southwest | 46,820 | | 21,934 | | 68,754 | | 57,289 | | 33,830 | | 91,119
| $231,092 | | $64,510 | | $295,602 | | $255,447 | | $82,052 | | $337,499
| | | | | | | | | | |
Customer type | | | | | | | | | | |
Commercial | $34,680 | | $38,476 | | $73,156 | | $31,301 | | $47,021 | | $78,322
Residential | 204,278 | | 32,464 | | 236,742 | | 227,669 | | 49,158 | | 276,827
Unbilled revenue (b) | (7,866) | | (6,430) | | (14,296) | | (3,523) | | (14,127) | | (17,650)
| $231,092 | | $64,510 | | $295,602 | | $255,447 | | $82,052 | | $337,499
| | | | | | | | | | |
Customer credit risk | | | | | | | | | | |
POR | $146,711 | | $30,953 | | $177,664 | | $146,826 | | $36,432 | | $183,258
Non-POR | 84,381 | | 33,557 | | 117,938 | | 108,621 | | 45,620 | | 154,241
| $231,092 | | $64,510 | | $295,602 | | $255,447 | | $82,052 | | $337,499

| | | | | | | | | | |
| 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.

(c) Retail Electricity includes Services.

Reconciliation to Condensed Consolidated Financial Information

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

| | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30,
| 2024 | | 2023 | | 2024 | | 2023
Total Reportable Segments Revenue | $94,254 | | $109,753 | | $295,602 | | $337,499
Net asset optimization expense | (482) | | (936) | | (2,610) | | (5,568)
Other Revenue | 2 | | 1,422 | | 1,534 | | 1,559
Total Revenues | $93,774 | | $110,239 | | $294,526 | | $333,490

We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the three

months ended September 30, 2024 and 2023, 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 $1.3 million and

$1.5 million, respectively. During the nine months ended September 30, 2024 and 2023, our retail revenues

included gross receipt taxes of $0.8 million, and our retail cost of revenues included gross receipts taxes of

$4.0 million and $4.1 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 nine months ended September 30, 2024 are presented in the

table below (in thousands):

| |
| |
Balance at December 31, 2023 | | $(4,496)
Current period credit loss provision | | (1,858)
Write-offs | | 3,078
Recovery of previous write-offs | | (106)
Balance at September 30, 2024 | | $(3,382)

4. Equity

Non-controlling Interest

We hold an economic interest and are the sole managing member in Spark HoldCo, with affiliates of Mr. Maxwell

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. T he Company and affiliates owned the following economic interests in Spark HoldCo at

September 30, 2024 and December 31, 2023, respectively.

| |
| The Company | Affiliated Owners
September 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

September 30,

Nine Months Ended

September 30,

| 2024 | | 2023 | | 2024 | | 2023
Net income before taxes allocated to non-controlling interest | $249 | | $8,398 | | $20,469 | | $14,021

Less: Income tax expense allocated to non-controlling

interest

732

1,258

2,384

2,360

Net (loss) income attributable to non-controlling interests | $(483) | | $7,140 | | $18,085 | | $11,661

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 the Company's 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 nine

months ended September 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.

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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 nine months ended September 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.

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 nine months ended September

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 nine months

ended September 30, 2024 and 2023 (in thousands, except per share data):

| | | | | |

Three Months Ended

September 30,

Nine Months Ended

September 30,

| 2024 | 2023 | | 2024 | 2023 |

Net income attributable to Via Renewables, Inc.

stockholders

$2,138

$7,519

$18,329

$15,313

Less: Dividend on Series A Preferred Stock | 2,707 | 2,708 | | 8,130 | 7,892 |

Net (loss) income attributable to stockholders of Class A

common stock

$(569)

$4,811

$10,199

$7,421

| | | | | |
Basic weighted average Class A common shares outstanding | 3,323 | 3,232 | | 3,272 | 3,204 |
Basic (loss) income per share attributable to stockholders | $(0.17) | $1.49 | | $3.12 | $2.32 |
| | | | | |

Net (loss) income attributable to stockholders of Class A

common stock

$(569)

$4,811

$10,199

$7,421

Effect of conversion of Class B common stock to shares of

Class A common stock

—

5,803

—

9,088

Diluted net (loss) income attributable to stockholders of

Class A common stock

$(569)

$10,614

$10,199

$16,509

| | | | | |
Basic weighted average Class A common shares outstanding | 3,323 | 3,232 | | 3,272 | 3,204 |
Effect of dilutive Class B common stock | — | 4,000 | | — | 4,000 |
Diluted weighted average shares outstanding | 3,323 | 7,232 | | 3,272 | 7,204 |
| | | | | |

Diluted (loss) income per share attributable to

stockholders

$(0.17)

$1.47

$3.12

$2.29

The computation of diluted earnings per share for the three and nine months ended September 30, 2024,

respectively, excludes 4.0 million shares of Class B common stock because the effect of their conversion was

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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. 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

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

| |
| September 30, 2024 | December 31, 2023
Assets | |
Current assets: | |
Cash and cash equivalents | $66,466 | $42,062
Accounts receivable | 40,866 | 62,548
Other current assets | 44,274 | 50,650
Total current assets | 151,606 | 155,260
Non-current assets: | |
Goodwill | 120,343 | 120,343
Other assets | 13,041 | 11,351
Total non-current assets | 133,384 | 131,694
Total Assets | $284,990 | $286,954
| |
Liabilities | |
Current liabilities: | |
Accounts payable and accrued liabilities | $37,345 | $44,201
Other current liabilities | 58,639 | 71,994
Total current liabilities | 95,984 | 116,195
Long-term liabilities: | |
Long-term portion of Senior Credit Facility | 89,000 | 97,000
Subordinated debt — affiliate | — | —
Other long-term liabilities | 405 | 54
Total long-term liabilities | 89,405 | 97,054
Total Liabilities | $185,389 | $213,249

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

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Series A Preferred Stock is presented between liabilities and the equity sections in the accompanying condensed

consolidated balance sheets. As of April 15, 2022, we have the option to redeem our Series A Preferred Stock.

Following the cessation of the publication of U.S. LIBOR on June 30, 2023, we use Three Month CME Term SOFR

plus a tenor spread of 0.26161 percent (or 26.161 bps) to calculate the dividend rate on the Series A Preferred Stock

pursuant to the rules of the Adjustable Interest Rate (LIBOR) Act.

As a result of the Merger, holders of the Company’s Series A Preferred Stock were provided an optional limited

change of control conversion right (the “Conversion Right”), available at the option of the holder, for $8.07 per

share in cash. On June 27, 2024, the Company provided notice to the holders of the Series A Preferred Stock of the

Conversion Right. Holders of the Series A Preferred Stock were entitled to exercise the Conversion Right through

July 26, 2024. No holders of the Series A Preferred Stock exercised the Conversion Right.

During the three and nine months ended September 30, 2024, we paid $2.7 million and $8.2 million in dividends to

holders of the Series A Preferred Stock. As of September 30, 2024, we had accrued $2.7 million related to dividends

to holders of the Series A Preferred Stock. This dividend was paid on October 15, 2024.

A summary of our preferred equity balance for the nine months ended September 30, 2024 is as follows:

| |
| | (In thousands)
Balance at December 31, 2023 | | $88,065
Accumulated dividends on Series A Preferred Stock | | (21)
Balance at September 30, 2024 | | $88,044

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 September 30, 2024 and December 31, 2023, we offset $1.3 million and $5.2 million,

respectively, in collateral to net against the related derivative 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.

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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

| | | | |
Commodity | Notional | | September 30, 2024 | | December 31, 2023
Natural Gas | MMBtu | | 5,052 | | 6,254
Electricity | MWh | | 880 | | 1,029

Trading

| | | | |
Commodity | Notional | | September 30, 2024 | | December 31, 2023
Natural Gas | MMBtu | | 632 | | 1,016

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

September 30,

Nine Months Ended

September 30,

| 2024 | | 2023 | | 2024 | | 2023
Loss on non-trading derivatives, net | $(10,979) | | $(6,193) | | $(12,115) | | $(49,002)
Loss on trading derivatives, net | (643) | | (798) | | (532) | | (1,426)
Loss on derivatives, net | $(11,622) | | $(6,991) | | $(12,647) | | $(50,428)
Current period settlements on non-trading derivatives | 6,613 | | 14,430 | | 29,538 | | 50,699
Current period settlements on trading derivatives | 532 | | 670 | | 799 | | 1,068
Total current period settlements on derivatives | $7,145 | | $15,100 | | $30,337 | | $51,767

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 t h o u s a n ds):

22

| | | | | | | | |
| September 30, 2024

Description

Gross Assets

Gross

Amounts

Offset

Net Assets

Cash

Collateral

Offset

Net Amount

Presented

Non-trading commodity derivatives | $1,263 | | $(635) | | $628 | | $— | | $628
Trading commodity derivatives | 591 | | (267) | | 324 | | — | | 324
Total Current Derivative Assets | 1,854 | | (902) | | 952 | | — | | 952
Non-trading commodity derivatives | — | | — | | — | | — | | —
Trading commodity derivatives | — | | — | | — | | — | | —

Total Non-current Derivative

Assets

—

—

—

—

—

Total Derivative Assets | $1,854 | | $(902) | | $952 | | $— | | $952

| | | | | | | | |

Description

Gross

Liabilities

Gross

Amounts

Offset

Net

Liabilities

Cash

Collateral

Offset

Net Amount

Presented

Non-trading commodity derivatives | $(9,135) | | $4,038 | | $(5,097) | | $1,201 | | $(3,896)
Trading commodity derivatives | (364) | | 169 | | (195) | | — | | (195)
Total Current Derivative Liabilities | (9,499) | | 4,207 | | (5,292) | | 1,201 | | (4,091)
Non-trading commodity derivatives | (738) | | 227 | | (511) | | 106 | | (405)
Trading commodity derivatives | — | | — | | — | | — | | —
Total Non-current Derivative Liabilities | (738) | | 227 | | (511) | | 106 | | (405)
Total Derivative Liabilities | $(10,237) | | $4,434 | | $(5,803) | | $1,307 | | $(4,496)

| | | | | | | | |
| December 31, 2023

Description

Gross Assets

Gross

Amounts

Offset

Net Assets

Cash

Collateral

Offset

Net Amount

Presented

Non-trading commodity derivatives | $1,926 | | $(1,046) | | $880 | | $— | | $880
Trading commodity derivatives | 64 | | (35) | | 29 | | — | | 29
Total Current Derivative Assets | 1,990 | | (1,081) | | 909 | | — | | 909
Non-trading commodity derivatives | 173 | | (82) | | 91 | | — | | 91
Trading commodity derivatives | — | | — | | — | | — | | —
Total Non-current Derivative Assets | 173 | | (82) | | 91 | | — | | 91
Total Derivative Assets | $2,163 | | $(1,163) | | $1,000 | | $— | | $1,000

| | | | | | | | |

Description

Gross

Liabilities

Gross

Amounts

Offset

Net

Liabilities

Cash

Collateral

Offset

Net Amount

Presented

Non-trading commodity derivatives | $(29,730) | | $6,077 | | $(23,653) | | $4,679 | | $(18,974)
Trading commodity derivatives | (173) | | 6 | | (167) | | — | | (167)
Total Current Derivative Liabilities | (29,903) | | 6,083 | | (23,820) | | 4,679 | | (19,141)
Non-trading commodity derivatives | (672) | | 115 | | (557) | | 503 | | (54)
Trading commodity derivatives | — | | — | | — | | — | | —
Total Non-current Derivative Liabilities | (672) | | 115 | | (557) | | 503 | | (54)
Total Derivative Liabilities | $(30,575) | | $6,198 | | $(24,377) | | $5,182 | | $(19,195)

7. Property and Equipment

Property and equipment consist of the following (in thousands):

23

| | | | |

Estimated useful

lives (years)

September 30, 2024

December 31, 2023

Information technology | 2 – 5 | | $7,689 | | $6,983
Total | | | 7,689 | | 6,983
Accumulated depreciation | | | (2,700) | | (2,273)
Property and equipment—net | | | $4,989 | | $4,710

Information technology assets include software and consultant time used in the application, development and

implementation of various systems including customer billing and resource management systems. As of

September 30, 2024 and December 31, 2023, information technology includes $1.9 million and $1.5 million,

respectively, of costs associated with assets not yet placed into service.

Depreciation expense recorded in the condensed consolidated statements of operations was $0.3 million and $0.4

million for the three months ended September 30, 2024 and 2023, respectively, and $0.9 million and $1.1 million

for the nine months ended September 30, 2024 and 2023, respectively.

24

8. Intangible Assets

Goodwill, customer relationships and trademarks consist of the following amounts (in thousands):

| | |
| September 30, 2024 | | December 31, 2023
Goodwill | $120,343 | | $120,343
Customer relationships—Acquired | $— | | $—
Customer relationships—Other | | |
Cost | $2,796 | | $968
Accumulated amortization | (929) | | (487)
Customer relationships—Other, net | $1,867 | | $481
Cost | $4,040 | | $4,040
Accumulated amortization | (1,919) | | (1,616)
Trademarks, net | $2,121 | | $2,424

Changes in goodwill, customer relationships (including non-compete agreements) and trademarks consisted of the

following (in thousands):

| | | | | |

Goodwill

Customer

Relationships—

Other

Trademarks

Balance at December 31, 2023 | $120,343 | | | $481 | | $2,424
Additions | — | | | 1,828 | | —
Amortization | — | | | (442) | | (303)
Balance at September 30, 2024 | $120,343 | | | $1,867 | | $2,121

Estimated future amortization expense for customer relationships and trademarks at September 30, 2024 is as

follows (in thousands):

|
Year ending December 31, |
2024 (remaining three months) | $491
2025 | 1,761
2026 | 524
2027 | 404
2028 | 404
> 5 years | 404
Total | $3,988

25

9. Debt

Debt consists of the following amounts as of September 30, 2024 and December 31, 2023 (in thousands):

| |
| September 30, 2024 | December 31, 2023
Long-term debt: | |
Senior Credit Facility (1) (2) | $89,000 | $97,000
Subordinated Debt | — | —
Total long-term debt | 89,000 | 97,000
Total debt | $89,000 | $97,000

(1) As of September 30, 2024 and December 31, 2023, the weighted average interest rate on the Senior Credit Facility was 8.09% and 8.60%,

respectively.

(2) As of September 30, 2024 and December 31, 2023, we had $23.3 million and $24.3 million in letters of credit issued, respectively.

Capitalized financing costs associated with our Senior Credit Facility were $1.8 million and $1.2 million as of

September 30, 2024 and December 31, 2023, respectively. Of these amounts, $0.6 million and $0.8 million are

recorded in other current assets, and $1.2 million and $0.4 million are recorded in other non-current assets in the

condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively.

Interest expense consists of the following components for the periods indicated (in thousands):

| | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30,
| 2024 | 2023 | | 2024 | | 2023
Senior Credit Facility | $1,115 | $1,593 | | $3,544 | | $5,394
Letters of credit fees and commitment fees | 385 | 435 | | 1,106 | | 1,299
Amortization of deferred financing costs | 167 | 206 | | 685 | | 619
Other | — | (1) | | 4 | | 65
Interest Expense | $1,667 | $2,233 | | $5,339 | | $7,377

Senior Credit Facility

The Company and Spark Holdco (together with certain subsidiaries of the Company and Spark Holdco, the “Co-

Borrowers”) maintain a senior secured borrowing base credit facility with Woodforest National Bank, as

administrative agent (the “Agent”), swing bank, swap bank, issuing bank, joint-lead arranger, sole bookrunner and

syndication agent, and the other financial institutions party thereto as lenders. As further described below, on June

28, 2024, the Company entered into the First Amendment (the "First Amendment") to its senior credit facility (as

amended by the First Amendment, the “Senior Credit Facility”). The Senior Credit Facility matures on June 30,

2027 and has a borrowing capacity of $205.0 million. As a result of the First Amendment to the Credit Agreement,

we wrote off $0.1 million in deferred financing costs.

Borrowings under the Senior Credit Facility are available for working capital loans, loans to fund acquisitions,

swingline loans, letters of credit and, following the First Amendment, for repurchases of Series A Preferred Stock

(subject to the terms and conditions therein).

Borrowings under the Senior Credit Facility bear interest at the following rates depending on the classification of

the borrowing and provided further that at no time shall the interest rate be less than four percent (4.0%) per annum:

• The Base Rate (a rate per annum equal to the greatest of (a) the prime rate, (b) the Federal Funds Rate plus

½ of 1% and (c) Term Secured Overnight Financing Rate (“SOFR”) for a one month tenor plus 1.0%,

provided, that the Base Rate shall not at any time be less than 0%), plus an applicable margin of 2.25% to

26

3.50% depending on the type of borrowing and the average outstanding amount of loans and letters of credit

under the Senior Credit Facility at the end of the prior fiscal quarter;

• The Term SOFR (a rate equal to the forward looking secured overnight financing rate published by the

SOFR administrator on the website of the Federal Reserve Bank of New York or any successor source with

either a comparable tenor (for any calculation with respect to a SOFR loan) or a one month tenor (for any

calculation with respect to a Base Rate loan)), plus an applicable margin of 3.25% to 4.50% depending on

the type of borrowing and the average outstanding amount of loans and letters of credit under the Senior

Credit Facility at the end of the prior fiscal quarter; or

• The Daily Simple SOFR (a rate equal to the forward looking secured overnight financing rate published by

the SOFR administrator on the website of the Federal Reserve Bank of New York or any successor source

and applied on a daily basis by the Agent in accordance with rate recommendations for daily loans), plus an

applicable margin of 3.25% to 4.50% depending on the type of borrowing and the average outstanding

amount of loans and letters of credit under the Senior Credit Facility at the end of the prior fiscal quarter,

plus a liquidity premium added by the Agent to each borrowing.

The Co-Borrowers are required to pay a non-utilization fee of 0.50% quarterly in arrears on the unused portion of

the Senior Credit Facility. In addition, the Co-Borrowers are subject to additional fees including an upfront fee, an

annual administrative agency fee, an arrangement fee and letter of credit fees.

The Senior Credit Facility contains covenants that, among other things, require the maintenance of specified ratios

or conditions including:

• Minimum Fixed Charge Coverage Ratio. The Company must maintain a minimum fixed charge coverage

ratio of not less than 1.10 to 1.00. The Minimum Fixed Charge Coverage Ratio is defined as the ratio of (a)

Adjusted EBITDA to (b) the sum of, among other things, consolidated interest expense, letter of credit fees,

non-utilization fees, earn-out payments, certain restricted payments, taxes, and payments made on or after

July 31, 2020 related to the settlement of civil and regulatory matters if not included in the calculation of

Adjusted EBITDA. Our Minimum Fixed Charge Coverage Ratio as of September 30, 2024 was 1.68 to

1.00.

• Maximum Total Leverage Ratio. The Company must maintain a ratio of (x) the sum of all consolidated

indebtedness (excluding eligible subordinated debt and letter of credit obligations), plus (y) gross amounts

reserved for civil and regulatory liabilities identified in filings with the SEC, to Adjusted EBITDA of no

more than 3.00 to 1.00. Our Maximum Total Leverage Ratio as of September 30, 2024 was 1.96 to 1.00.

The First Amendment eliminated the Maximum Senior Secured Leverage Ratio covenant and amended the

Maximum Total Leverage Ratio covenant to no more than 3.00 to 1.00 from no more than 2.50 to 1.00.

As of September 30, 2024, the Company was in compliance with financial covenants under the Senior Credit

Facility. The Company continues to manage the impact of commodity costs on financial covenant compliance.

Maintaining compliance with our covenants under our Senior Credit Facility may impact our ability to pay

dividends on our Series A Preferred Stock.

The Senior Credit Facility contains various customary affirmative covenants that require, among other things, the

Company to maintain insurance, pay its obligations and comply with law. The Senior Credit Facility also contains

customary negative covenants that limit the Company’s ability to, among other things, incur certain additional

indebtedness, grant certain liens, engage in certain asset dispositions, merge or consolidate, make certain payments,

distributions and dividends, investments, acquisitions or loans, materially modify certain agreements, and enter into

transactions with affiliates.

27

The Senior Credit Facility is secured by pledges of the equity of the portion of Spark HoldCo owned by the

Company, the equity of Spark HoldCo’s subsidiaries, the Co-Borrowers’ present and future subsidiaries, and

substantially all of the Co-Borrowers’ and their subsidiaries’ present and future property and assets, including

intellectual property assets, accounts receivable, inventory and liquid investments, and control agreements relating

to bank accounts.

The Company is entitled to pay cash dividends so long as: (a) no default exists or would result therefrom; (b) the

Co-Borrowers are in pro forma compliance with all financial covenants before and after giving effect thereto; and

(c) the outstanding amount of all loans and letters of credit do not exceed the borrowing base limits.

The Senior Credit Facility contains certain customary representations and warranties and events of default. Events

of default include, among other things, payment defaults, breaches of representations and warranties, covenant

defaults, cross-defaults and cross-acceleration to certain indebtedness, certain events of bankruptcy, certain events

under ERISA, material judgments in excess of $5.0 million, certain events with respect to material contracts, and

actual or asserted failure of any guaranty or security document supporting the Senior Credit Facility to be in full

force and effect. A default will also occur if at any time W. Keith Maxwell III ceases to, directly or indirectly,

beneficially own at least fifty-one percent (51%) of the Company’s outstanding Class A common stock and Class B

common stock on a combined basis, and a controlling percentage of the voting equity interest of the Company, and

certain other changes in control. If such an event of default occurs, the lenders under the Senior Credit Facility

would be entitled to take various actions, including the acceleration of amounts due under the facility and all actions

permitted to be taken by a secured creditor.

Subordinated Debt Facility

The Company maintains an Amended and Restated Subordinated Promissory Note in the principal amount of up to

$25.0 million (the “Subordinated Debt Facility”), by and among the Company, Spark HoldCo and Retailco. The

Subordinated Debt Facility allows the Company to draw advances in increments of no less than $1.0 million per

advance up to $25.0 million. In connection with entering into the First Amendment to the Credit Agreement, the

Company entered into an amended and restated subordinated promissory note with Spark HoldCo and Retailco,

which extends the maturity date of the note to January 31, 2028.

Borrowings are at the discretion of Retailco. Advances thereunder accrue interest at an annual rate equal to the

prime rate as published by the Wall Street Journal plus two percent (2.0%) from the date of the advance.

The Company has the right to capitalize interest payments under the Subordinated Debt Facility. The Subordinated

Debt Facility is subordinated in certain respects to our Senior Credit Facility pursuant to a subordination agreement.

The Company may pay interest and prepay principal on the Subordinated Debt Facility so long it is in compliance

with the covenants under the Senior Credit Facility, is not in default under the Senior Credit Facility and has

minimum availability of $5.0 million under the borrowing base under the Senior Credit Facility. Payment of

principal and interest under the Subordinated Debt Facility is accelerated upon the occurrence of certain change of

control or sale transactions.

As of September 30, 2024, and December 31, 2023, there were zero outstanding borrowings under the Subordinated

Debt Facility.

10. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in

an orderly transaction between market participants at the measurement date. Fair values are based on assumptions

that market participants would use when pricing an asset or liability, including assumptions about risk and the risks

inherent in valuation techniques and the inputs to valuations. This includes the credit standing of counterparties

involved and the impact of credit enhancements.

28

We apply fair value measurements to our commodity derivative instruments based on the following fair value

hierarchy, which prioritizes the inputs to the valuation techniques used to measure fair value into three broad levels:

• Level 1—Quoted prices in active markets for identical assets and liabilities. Instruments

categorized in Level 1 primarily consist of financial instruments such as exchange-traded derivative

instruments.

• Level 2—Inputs other than quoted prices recorded in Level 1 that are either directly or indirectly

observable for the asset or liability, including quoted prices for similar assets or liabilities in active

markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other

than quoted prices that are observable for the asset or liability, and inputs that are derived from

observable market data by correlation or other means. Instruments categorized in Level 2 primarily

include non-exchange traded derivatives such as over-the-counter commodity forwards and swaps

and options.

• Level 3—Unobservable inputs for the asset or liability, including situations where there is little, if

any, observable market activity for the asset or liability. The Level 3 category includes estimated

earnout obligations related to our acquisitions.

As the fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest

priority to unobservable data (Level 3), the Company maximizes the use of observable inputs and minimizes the use

of unobservable inputs when measuring fair value. These levels can change over time. In some cases, the inputs

used to measure fair value might fall in different levels of the fair value hierarchy. In these cases, the lowest level

input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value

hierarchy.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present assets and liabilities measured and recorded at fair value in our condensed consolidated

balance sheets on a recurring basis by and their level within the fair value hierarchy (in thousands):

| | | | | | |
| Level 1 | | Level 2 | | Level 3 | | Total
September 30, 2024 | | | | | | |
Non-trading commodity derivative assets | $— | | $628 | | $— | | $628
Trading commodity derivative assets | — | | 324 | | — | | 324
Total commodity derivative assets | $— | | $952 | | $— | | $952
Non-trading commodity derivative liabilities | $— | | $(4,301) | | $— | | $(4,301)
Trading commodity derivative liabilities | — | | (195) | | — | | (195)
Total commodity derivative liabilities | $— | | $(4,496) | | $— | | $(4,496)

| | | | | | |
| Level 1 | | Level 2 | | Level 3 | | Total
December 31, 2023 | | | | | | |
Non-trading commodity derivative assets | $— | | $971 | | $— | | $971
Trading commodity derivative assets | — | | 29 | | — | | 29
Total commodity derivative assets | $— | | $1,000 | | $— | | $1,000
Non-trading commodity derivative liabilities | $— | | $(19,028) | | $— | | $(19,028)
Trading commodity derivative liabilities | — | | (167) | | — | | (167)
Total commodity derivative liabilities | $— | | $(19,195) | | $— | | $(19,195)

We had no transfers of assets or liabilitie s between any of the above levels during the nine months ended

September 30, 2024 and the year ended December 31, 2023.

29

Our derivative contracts include exchange-traded contracts valued utilizing readily available quoted market prices

and non-exchange-traded contracts valued using market price quotations available through brokers or over-the-

counter and on-line exchanges. In addition, in determining the fair value of our derivative contracts, we apply a

credit risk valuation adjustment to reflect credit risk, which is calculated based on our or the counterparty’s

historical credit risks. As of September 30, 2024 and December 31, 2023, the credit risk valuation adjustment was a

reduction of derivative liabilities, net of $0.1 million and $0.3 million, respectively.

11. Income Taxes

Income Taxes

We and our subsidiaries, CenStar and Verde Energy USA, Inc. (“Verde Corp”) are each subject to U.S. federal

income tax as corporations. CenStar and Verde Corp file consolidated tax returns in jurisdictions that allow

combined reporting. Spark HoldCo and its subsidiaries, with the exception of CenStar and Verde Corp, are treated

as flow-through entities for U.S. federal income tax purposes, and, as such, are generally not subject to U.S. federal

income tax at the entity level. Rather, the tax liability with respect to their taxable income is passed through to their

members or partners. Accordingly, we are subject to U.S. federal income taxation on our allocable share of Spark

HoldCo’s net U.S. taxable income.

In our financial statements, we report federal and state income taxes for our share of the partnership income

attributable to our ownership in Spark HoldCo and for the income taxes attributable to CenStar and Verde Corp. Net

income attributable to non-controlling interest includes the provision for income taxes related to CenStar and Verde

Corp.

We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized

for future tax consequences attributable to differences between the financial statement carrying amounts of existing

assets and liabilities and the tax bases of the assets and liabilities. We apply existing tax law and the tax rate that we

expect to apply to taxable income in the years in which those differences are expected to be recovered or settled in

calculating the deferred tax assets and liabilities. Effects of changes in tax rates on deferred tax assets and liabilities

are recognized in income in the period of the tax rate enactment. A valuation allowance is recorded when it is not

more likely than not that some or all of the benefit from the deferred tax asset will be realized.

We periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize

our deferred income tax assets. In making this determination, we consider all available positive and negative

evidence and make certain assumptions. We consider, among other things, our deferred tax liabilities, the overall

business environment, our historical earnings and losses, current industry trends, and our outlook for future years.

We believe it is more likely than not that our deferred tax assets will be utilized, and accordingly have not recorded

a valuation allowance on these assets.

As of September 30, 2024, we had a net deferred tax asset of $10.9 million, due in large part to the original step up

in tax basis resulting from the initial purchase of Spark HoldCo units from NuDevco Retail and NuDevco Retail

Holdings (predecessor to Retailco) in connection with our initial public offering.

The effective U.S. federal and state income tax rate for the three months ended September 30, 2024 and 2023 was

50.6% and 18.6%, respectively. The effective U.S. federal and state income tax rate for the nine months ended

September 30, 2024 and 2023 was 21.0% and 19.7%, respectively. The effective tax rate for three and nine months

ended September 30, 2024 differed from the U.S. federal statutory tax rate of 21% primarily due to state taxes and

the benefit provided from Spark HoldCo operating as a limited liability company, which is treated as a partnership

for federal and state income tax purposes and is not subject to federal and state income taxes. Accordingly, the

portion of earnings attributable to non-controlling interest is subject to tax when reported as a component of the

non-controlling interest holders’ taxable income.

30

12. Commitments and Contingencies

From time to time, we may be involved in legal, tax, regulatory and other proceedings in the ordinary course of

business. Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded

when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Legal Proceedings

Below is a summary of our currently pending material legal proceedings. We are subject to lawsuits and claims

arising in the ordinary course of our business. The following legal proceedings are in various stages and are subject

to substantial uncertainties concerning the outcome of material factual and legal issues. Accordingly, unless

otherwise specifically noted, we cannot currently predict the manner and timing of the resolutions of these legal

proceedings or estimate a range of possible losses or a minimum loss that could result from an adverse verdict in a

potential lawsuit. While the lawsuits and claims are asserted for amounts that may be material should an

unfavorable outcome occur, management does not currently expect that any currently pending matters will have a

material adverse effect on our financial position or results of operations.

Consumer Lawsuits

Similar to other energy service companies (“ESCOs”) operating in the industry, from time-to-time, the Company is

subject to class action lawsuits in various jurisdictions where the Company sells natural gas and electricity.

On January 14, 2021, Glikin, et al. v. Major Energy Electric Services, LLC, a purported variable rate class action,

was filed by a Maryland customer in the United States District Court, Southern District of New York, attempting to

represent a class of all Major Energy customers (including customers of companies Major Energy acts as a

successor to) in the United States charged a variable rate for electricity or gas by Major Energy during the

applicable statute of limitations period up to and including the date of judgment. The Company moved this case to

the United States District Court for the District of Maryland (Case No. 1:21-cv-03251-MJM) and in December 2023

filed a motion to dismiss the lawsuit. In September 2024, the Court granted the Company’s motion that argued that

Glikin had failed to exhaust her administrative remedies and that, if she wishes to proceed, she must first go to the

Maryland Public Service Commission. The Company is vigorously defending this matter; however, given the

current early stage of this matter, we cannot predict the outcome of this case at this time.

On December 18, 2023, Foote v. Electricity N.H., LLC (“ENH”), a purported Telephone Consumer Protection Act

(the “TCPA”) class action, was filed in the United States District Court for the District of New Hampshire. Plaintiff

claims that calls made to her violated the TCPA. Plaintiff purports to assert claims on her own behalf and a putative

class of individuals to whom calls using a prerecorded or artificial voice message regarding ENH’s services were

placed during the period of September 1, 2019, through September 1, 2023. ENH only operates in New Hampshire

and no other states. This matter was dismissed, with prejudice in August 2024.

Corporate Matter Lawsuits

The Company may from time to time be subject to legal proceedings that arise in the ordinary course of business.

Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to

have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

On July 19, 2024, Joshua Amburgey, a purported stockholder of the Company at the time of the Merger, filed a

verified class action complaint, Joshua Amburgey, on behalf of himself and all others similarly situated v. Via

Renewables, Inc., et al., C ase No. 2024-0762-KSJM (Del. Ch.) (the “Amburgey Action”) in the Court of Chancery

of the State of Delaware (“Delaware Court”) against the Company and Amanda E. Bush, Stephen Kennedy and

Kenneth Hartwick in their capacities as members of the Company’s Special Transaction Committee of the Board of

Directors (“Special Committee”), as well as Mr. Maxwell, Retailco, LLC, TxEx Energy Investments, LLC, Electric

Holdco, LLC, NuDevco Retail Holdings, LLC and NuDevco Retail, LLC. Plaintiff alleges that the defendants

31

breached their fiduciary duties owed to the Company’s public stockholders in connection with the Merger. The

Company is vigorously defending this matter; however, given the current early stage of this matter, we cannot

predict the outcome of this case at this time.

O n July 25, 2024, Bruce Taylor, a purported stockholder of the Company at the time of the Merger, filed a verified

class action complaint, Bruce Taylor v. W. Keith Maxwell III, et al., Case No. 2024-0794 (Del. Ch.) (the “Taylor

Action”) in the Delaware Court against the Special Committee, and Mike Barajas, in his capacity as the Company’s

Chief Financial Officer, as well as Mr. Maxwell in his capacity as controlling stockholder of the Company. Plaintiff

alleges that the defendants breached their fiduciary duties and participated in the provision of a materially untrue

and misleading proxy statement to Company’s minority stockholders in connection with the Merger. The Company

is vigorously defending this matter; however, given the current early stage of this matter, we cannot predict the

outcome of this case at this time.

On May 22, 2024, Michael Stutzman, a purported stockholder of the Company that previously delivered a records

request, filed a complaint, Michael Stutzman v. Via Renewables, Inc., Case No. 2024-0545-LM (Del. Ch.) (the “220

Complaint”) in the Delaware Court against the Company. The 220 Complaint has now been converted into the third

class-action complaint filed in Delaware Chancery Court that challenges the take-private transaction. The three

shareholder complaints largely overlap, and the Delaware Chancery Court has ordered the three plaintiffs and their

counsel to choose one lead-plaintiff to consolidate the cases. These matters are being vigorously defended;

however, given the current early stage of this matter, we cannot predict the outcome of these cases at this time.

Regulatory Matters

Many state regulators have increased scrutiny on retail energy providers, across all industry providers. We are

subject to regular regulatory inquiries, license renewal reviews, and preliminary investigations in the ordinary

course of our business. Below is a summary of our currently pending material state regulatory matters. The

following state regulatory matters are in various stages and are subject to substantial uncertainties concerning the

outcome of material factual and legal issues. Accordingly, we cannot currently predict the manner and timing of the

resolution of these state regulatory matters or estimate a range of possible losses or a minimum loss that could result

from an adverse action, unless expressly indicated below. Management does not currently expect that any currently

pending state regulatory matters will have a material adverse effect on our financial position or results of operations.

Connecticut. On May 21, 2024, the Connecticut Public Utility Regulatory (“PURA”) issued a Notice of Violation

and Assessment of Civil Penalty (“NOV”) to Major Energy in which PURA stated it had reason to believe that one

of Major Energy’s on-line vendors violated certain Electric Supplier Laws and Aggregator Rulings. The Company

worked cooperatively with PURA and has finalized a full and final settlement for $2.0 million, to be paid in three

installments to the Connecticut electric distribution companies as a donation to reduce Connecticut residential

hardship customer arrearages. The settlement was approved by PURA in mid-July 2024 (and accrued as of June 30,

2024). The third and final installment will be paid in November 2024.

Illinois. On July 26, 2023, Spark Energy, LLC received a demand letter from a law firm representing the Office of

the Illinois Attorney General alleging that Spark Energy, LLC’s marketing and sales practices may have not been in

compliance with Illinois law. The letter offered, in the interest of efficiency and minimizing litigation costs, a

settlement demand to resolve the matter. The Company has agreed to engage in mediation with the law firm to try to

resolve this matter. The Company met for an all-day mediation in August 2024. The Company is voluntarily

working with the firm to reach a settlement, however, if settlement is unsuccessful, the Attorney General could

commence a lawsuit in Illinois against Spark Energy, LLC.

Maine. On February 9, 2023, Maine Commission’s Consumer Assistance and Safety Division (“Advocacy Staff”)

filed a Request for Formal Investigation requesting that the Maine Commission open a formal, enforcement

investigation to review whether Company’s subsidiary, Electricity Maine, LLC (EME), is in compliance with the

Maine Commission’s Rules. During a special deliberative session, the same day, the Maine Commission announced

it would proceed with a formal investigation of EME, which was noticed in a Notice of Enforcement Investigation

32

issued February 10, 2023 (Docket No. 2023-00024). The Company met with Advocacy Staff over the course of

several months to address concerns. As a result, the Company and the Advocacy Staff have agreed to a settlement in

principle pursuant to which customers would receive certain limited refunds on their energy bill. On October 18,

2024, the Maine Commission approved EME’s proposed settlement.

Maryland. Maryland SB1, sponsored by Senator Augustine (D-Prince George’s County) and Delegate Crosby (D-

St. Mary’s County), was signed into law in May 2024. In addition to new consumer protections, Maryland SB1

prohibits residential purchase of receivables (POR) for contracts executed or renewed after December 31, 2024.

The Maryland Commission Staff has proposed that contracts prior to January 1, 2025, should be eligible for

grandfathered utility consolidated billing (UCB) with POR until a post-POR form of UCB is in place. However, due

to technical limitations at the utilities, this interim accommodation may not be in place. Maryland SB1 has

introduced significant uncertainty in the Maryland retail energy market. The Company is working to minimize

economic impacts of Maryland SB1 to the Company.

Ohio. On August 14, 2024, the Public Utility Commission of Ohio (“PUCO”) sent Major Energy a notice of

probable non-compliance regarding approximately fifty-five consumer complaints during the time period January

3, 2023 through April 12, 2024. The Company is working cooperatively with PUCO to resolve this matter,

provided its detailed response to the probable non-compliance on October 24, 2024, and believes this matter will not

have a material impact on the Company.

In addition to the matters disclosed above, in the ordinary course of business, the Company may from time to time

be subject to regulators initiating informal reviews or issuing subpoenas for information as means to evaluate the

Company and its subsidiaries’ compliance with applicable laws, rule, regulations and practices. Although there can

be no assurance in this regard, the Company does not expect any of those regulatory reviews to have a material

adverse effect on the Company’s results of operations, cash flows or financial condition.

Indirect Tax Audits

We are undergoing various types of indirect tax audits spanning from years 2020 to 2024 for which additional

liabilities may arise. At the time of filing these consolidated financial statements, these indirect tax audits are at an

early stage and subject to substantial uncertainties concerning the outcome of audit findings and corresponding

responses.

As of September 30, 2024 and December 31, 2023, we had accrued $10.8 million and $6.3 million, respectively,

related to litigation and regulatory matters and $0.7 million and $0.7 million, respectively, related to indirect tax

audits. The outcome of each of these may result in additional expense.

13. Transactions with Affiliates

Transactions with Affiliates

We enter into transactions with and pay certain costs on behalf of affiliates that are commonly controlled in order to

reduce risk, reduce administrative expense, create economies of scale, create strategic alliances and supply goods

and services to these related parties. We also sell and purchase natural gas and electricity with affiliates. We present

receivables and payables with the same affiliate on a net basis in the condensed consolidated balance sheets as all

affiliate activity is with parties under common control. Affiliated transactions include certain services to the

affiliated companies associated with employee benefits provided through our benefit plans, insurance plans, leased

office space, administrative salaries, due diligence work, recurring management consulting, and accounting, tax,

legal, or technology services. Amounts billed are based on the 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 us and then directly billed or allocated to affiliates, as well as

costs that have been incurred by our affiliates and then directly billed or allocated to us, and are recorded net in

33

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 condensed consolidated

balance sheets. Transactions with affiliates for sales or purchases of natural gas and electricity 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—affi lia te are recorded in the

condensed consolidated balance sheets.

The following tables presents asset and liability balances with affiliates (in thousands):

| | |
| September 30, 2024 | | December 31, 2023
Assets | | |
Accounts Receivable - affiliates | $4,455 | | $4,683
Total Assets - affiliates | $4,455 | | $4,683

| | |
| September 30, 2024 | | December 31, 2023
Liabilities | | |
Accounts Payable - affiliates | $481 | | $472
Subordinated Debt - affiliates (1) | — | | —
Total Liabilities - affiliates | $481 | | $472

(1) The Subordinated Debt Facility allows us to draw advances in increments of no less than $1.0 million per advance up to the maximum

principal amount of the Subordinated Debt Facility, subject to Retailco’s discretion. Advances thereunder accrue interest at an annual rate

equal to the prime rate as published by the Wall Street Journal plus two percent (2.0%) from the date of the advance. See Note 9 “Debt”

for a further description of terms and conditions of the Subordinated Debt Facility.

The following table presents revenues and cost of revenues recorded in net asset optimization revenue associated

with affiliates for the periods indicated (in thousands):

| | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30,
| 2024 | 2023 | | 2024 | | 2023
Revenue NAO - affiliates | $110 | $194 | | $718 | | $2,811
Less: Cost of Revenue NAO - affiliates | — | 1 | | 1 | | 333
Net NAO - affiliates | $110 | $193 | | $717 | | $2,478

Cost Allocations

Where costs incurred on behalf of the affiliate or us cannot be determined by specific identification for direct

billing, the costs are allocated to the affiliated entities or us based on estimates of percentage of departmental usage,

wages or headcount. The total net amount direct billed and allocated to/(from) affiliates was ($0.3 million) and

$(0.5) million for the three months ended September 30, 2024 and 2023, respectively. The total net amount direct

billed and allocated to/(from) affiliates was ($4.4 million) and $1.4 million for the nine months ended September 30,

2024 and 2023, respectively. The Company would have incurred incremental costs of $0.5 million and $0.4 million

for the three months ended September 30, 2024 and 2023, respectively, operating on a stand-alone basis. The

Company would have incurred incremental costs of $1.1 million and $1.2 million for the nine months ended

September 30, 2024 and 2023, respectively, operating on a stand-alone basis.

Distributions to and Contributions from Affiliates

During the three months ended September 30, 2024 and 2023, Spark HoldCo made distributions to affiliates of Mr.

Maxwell of zero for the payments of quarterly distribution on their respective Spark HoldCo units. During the three

months ended September 30, 2024 and 2023, Spark HoldCo also made distributions to these affiliates for gross-up

distributions of zero and $0.1 million, respectively, in connection with distributions made between Spark HoldCo

and Via Renewables, Inc. for payment of income taxes incurred by us.

34

During the nine months ended September 30, 2024 and 2023, Spark HoldCo made distributions to affiliates of Mr.

Maxwell of zero and $3.6 million, respectively, for the payments of quarterly distribution on their respective Spark

HoldCo units. During the nine months ended September 30, 2024 and 2023, Spark HoldCo also made distributions

to these affiliates for gross-up distributions of $4.5 million and $0.7 million, respectively, in connection with

distributions made between Spark HoldCo and Via Renewables, Inc. for payment of income taxes incurred by us.

On June 13, 2024, we consummated the previously announced Merger, following which Mr. Maxwell and his

affiliates became the owners of all of the issued and outstanding shares of the Company's Class A common stock

and Class B common stock. For a more detailed description of the Merger, please see Note 2 “Basis of Presentation

and Summary of Significant Accounting Policies” in the notes to our condensed consolidated financial statements.

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). The total payout for the

settlement of restricted stock units was $0.6 million, which was paid by Retailco. This was recorded as contribution

from non-controlling interest for the three and six months ended June 30, 2024.

14. Segment Reporting

Our determination of reportable business segments considers the strategic operating units under which we make

financial decisions, allocate resources and assess performance of our business. Our reportable business segments are

retail electricity and retail natural gas. The retail electricity segment consists of electricity sales and transmission to

residential and commercial customers. The retail natural gas segment consists of natural gas sales to, and natural gas

transportation and distribution for, residential and commercial customers. Corporate and other consists of expenses

and assets of the retail electricity and natural gas segments that are managed at a consolidated level such as general

and administrative expenses. Asset optimization activities and wireless services are also included in Corporate and

other.

For the three months ended September 30, 2024 and 2023, w e recorded asset optimization revenues of $2.9 million

and $2.9 million and asset optimization cost of revenues of $3.4 million and $3.8 million, respectively, and for the

nine months ended September 30, 2024 and 2023, we recorded asset optimization revenues of $17.5 million and

$17.3 million and asset optimization cost of revenues of $20.1 million and $22.9 million, respectively, which are

presented on a net basis in asset optimization revenues.

We use retail gross margin to assess the performance of our operating segments. We define retail gross margin as

gross profit less (i) net asset optimization (expenses) revenues, (ii) net (losses) gains on non-trading derivative

instruments, (iii) net current period cash settlements on non-trading derivative instruments, and (iv) gains (losses)

from non-recurring events (including non-recurring market volatility).

We deduct net gains (losses) on non-trading derivative instruments, excluding current period cash settlements, from

the retail gross margin calculation in order to remove the non-cash impact of net gains and losses on these derivative

instruments. We deduct net gains (losses) from non-recurring events (including non-recurring market volatility) to

ensure retail gross margin reflects operating performance that is not distorted by non-recurring events or extreme

market volatility. Retail gross margin should not be considered an alternative to, or more meaningful than, operating

income (loss), as determined in accordance with GAAP.

Below is a reconciliation of retail gross margin to gross profit (in thousands):

35

| | | | | | |

Three Months Ended

September 30,

Nine Months Ended

September 30,

| 2024 | | 2023 | | 2024 | | 2023
Reconciliation of Retail Gross Margin to Gross Profit | | | | | | |
Total Revenue | $93,774 | | $110,239 | | $294,526 | | $333,490
Less: | | | | | | |
Retail cost of revenues | 68,617 | | 71,050 | | 180,576 | | 234,417
Gross Profit | $25,157 | | $39,189 | | $113,950 | | $99,073
Less: | | | | | | |
Net asset optimization expense | (482) | | (936) | | (2,610) | | (5,568)
Net, loss on non-trading derivative instruments | (10,979) | | (6,193) | | (12,115) | | (49,002)

Net, Cash settlements on non-trading derivative

instruments

6,613

14,430

29,538

50,699

Retail Gross Margin | $30,005 | | $31,888 | | $99,137 | | $102,944

36

Financial data for business segments are as follows (in thousands):

| | | | | | | | |
Three Months Ended September 30, 2024

Retail

Electricity (a)

Retail

Natural Gas

Corporate

and Other

Eliminations

Consolidated

Total revenues | $82,615 | | $11,639 | | $(480) | | $— | | $93,774
Retail cost of revenues | 63,334 | | 5,224 | | 59 | | — | | 68,617
Gross Profit (Loss) | $19,281 | | $6,415 | | $(539) | | $— | | $25,157
Less: | | | | | | | | |
Net asset optimization expense | — | | — | | (482) | | — | | (482)

Net, loss on non-trading derivative

instruments

(10,769)

(210)

—

—

(10,979)

Current period settlements on non-trading

derivatives

5,476

1,137

—

—

6,613

Retail Gross Margin | $24,574 | | $5,488 | | $(57) | | $— | | $30,005
Total Assets at September 30, 2024 | $1,777,754 | | $91,425 | | $302,672 | | $(1,873,431) | | $298,420
Goodwill at September 30, 2024 | $117,813 | | $2,530 | | $— | | $— | | $120,343

(a) Retail Electricity includes related services.

| | | | | | | | |
Three Months Ended September 30, 2023

Retail

Electricity

Retail

Natural Gas

Corporate

and Other

Eliminations

Consolidated

Total revenues | $97,855 | | $11,898 | | $486 | | $— | | $110,239
Retail cost of revenues | 64,575 | | 5,790 | | 685 | | — | | 71,050
Gross Profit (Loss) | $33,280 | | $6,108 | | $(199) | | $— | | $39,189
Less: | | | | | | | | |
Net asset optimization expense | — | | — | | (936) | | — | | (936)

Net, loss on non-trading derivative

instruments

(6,143)

(50)

—

—

(6,193)

Current period settlements on non-trading

derivatives

13,432

998

—

—

14,430

Retail Gross Margin | $25,991 | | $5,160 | | $737 | | $— | | $31,888
Total Assets at December 31, 2023 | $1,613,642 | | $48,303 | | $301,892 | | $(1,660,003) | | $303,834
Goodwill at December 31, 2023 | $117,813 | | $2,530 | | $— | | $— | | $120,343

37

| | | | | | | | |
Nine Months Ended September 30, 2024

Retail

Electricity (a)

Retail

Natural Gas

Corporate

and Other

Eliminations

Consolidated

Total revenues | $231,092 | | $64,510 | | $(1,076) | | $— | | $294,526
Retail cost of revenues | 149,592 | | 30,090 | | 894 | | — | | 180,576
Gross Profit (Loss) | $81,500 | | $34,420 | | $(1,970) | | $— | | $113,950
Less: | | | | | | | | |
Net asset optimization expense | — | | — | | (2,610) | | — | | (2,610)
Net, loss on non-trading derivatives | (11,998) | | (117) | | — | | — | | (12,115)

Current period settlements on non-trading

derivatives

24,702

4,836

—

—

29,538

Retail Gross Margin | $68,796 | | $29,701 | | $640 | | $— | | $99,137
Total Assets at September 30, 2024 | $1,777,754 | | $91,425 | | $302,672 | | $(1,873,431) | | $298,420
Goodwill at September 30, 2024 | $117,813 | | $2,530 | | $— | | $— | | $120,343

(a) Retail Electricity includes related services.

| | | | | | | | |
Nine Months Ended September 30, 2023

Retail

Electricity

Retail

Natural Gas

Corporate

and Other

Eliminations

Consolidated

Total revenues | $255,447 | | $82,052 | | $(4,009) | | $— | | $333,490
Retail cost of revenues | 183,017 | | 50,664 | | 736 | | — | | 234,417
Gross Profit (Loss) | $72,430 | | $31,388 | | $(4,745) | | $— | | $99,073
Less: | | | | | | | | |
Net asset optimization expense | — | | — | | (5,568) | | — | | (5,568)
Net, loss on non-trading derivatives | (41,984) | | (7,018) | | — | | — | | (49,002)

Current period settlements on non-trading

derivatives

44,960

5,739

—

—

50,699

Retail Gross Margin | $69,454 | | $32,667 | | $823 | | $— | | $102,944
Total Assets at December 31, 2023 | $1,613,642 | | $48,303 | | $301,892 | | $(1,660,003) | | $303,834
Goodwill at December 31, 2023 | $117,813 | | $2,530 | | $— | | $— | | $120,343

38

15. Customer Acquisitions

Acquisition of Customer Books

In April 2024, we entered into an asset purchase agreement to acquire up to approximately 12,556 residential

customer equivalents ("RCEs") for a cash purchase price of up to a maximum of $2.3 million. These customers

began transferring in June of 2024, and are located in our existing markets. During the three and nine months ended

September 30, 2024, approximately 7,100 and 10,700 RCEs were transferred.

As part of the acquisitions, we funded an escrow account, the balance of which is reflected as restricted cash in our

consolidated balance sheet. As we acquire customers, we make payments to the sellers from the escrow account. As

of September 30, 2024, the balance in the escrow account was $0.5 million, and these funds are expected to be

released to the sellers as acquired customers transfer from the sellers to the Company in accordance with the asset

purchase agreement, and any unallocated balance will be returned to the Company once the acquisition is complete.

39

16. Subsequent Events

Declaration of Dividends

On October 16, 2024, we declared a quarterly cash dividend in the amount of $0.71847 per share to holders of

record of the Series A Preferred Stock on January 1, 2025. The dividend will be paid on January 15, 2025.

Acquisition of Customer Books

In October 2024, we entered into two asset purchase agreements to acquire up to 100,600 RCEs for a cash purchase

price of up to a maximum $16.9 million paid in cash or funded into escrow accounts. These customers are located in

our existing markets and will begin transferring in December of 2024 and January of 2025.

As we acquire customers under these acquisition agreements, we will make payments to the sellers from the escrow

account. Funds from the escrow account will be released to the sellers as acquired customers transfer from the

sellers to the Company in accordance with the asset purchase agreement, and any unallocated balance will be

returned to the Company once the acquisitions are complete.

Amendment to the Spark HoldCo Agreement

On October 30, 2024, the Company entered into Amendment No. 3 (the “Amendment”) to the Third Amended and

Restated Limited Liability Company Agreement of Spark HoldCo, dated as of March 15, 2017, as amended (the

“Third Restated LLC Agreement”), by and among the Company, Spark HoldCo, and Retailco, LLC. The

Amendment amends the Third Restated LLC Agreement to generally permit the managing members to make non

pro rata distributions to the members of Spark Holdco (which are the Company and Retailco, LLC). The terms of

the Amendment were unanimously approved by our Board of Directors.

40

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

AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with

the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Report and

the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial

condition and results of operations included in our 2023 Form 10-K filed with the Securities and Exchange Commission

(“SEC”) on February 29, 2024. Results of operations and cash flows for the three and nine months ended September 30, 2024

are not necessarily indicative of results to be attained for any other period. See “Cautionary Note Regarding Forward-Looking

Statements” and “Risk Factors.”

Overview

We are an independent retail energy services company founded in 1999 and are organized as a Delaware

corporation that provides residential and commercial customers in competitive markets across the United States

with an alternative choice for natural gas and electricity. We purchase our electricity and natural gas supply from a

variety of wholesale providers and bill our customers monthly for the delivery of electricity and natural gas based

on their consumption at either a fixed or variable price. Electricity and natural gas are then distributed to our

customers by local regulated utility companies through their existing infrastructure. As of September 30, 2024, we

operated in 103 utility service territories across 20 states and the District of Columbia.

Our business consists of two operating segments:

• Retail Electricity Segment. In this segment, we purchase electricity supply through physical and financial

transactions with market counterparties and ISOs and supply electricity to residential and commercial

consumers pursuant to fixed-price and variable-price contracts. For the three months ended September 30,

2024 and 2023, approximately 88% and 89%, respectively, of our retail revenues were derived from the sale

of electricity.

• Retail Natural Gas Segment. In this segment, we purchase natural gas supply through physical and financial

transactions with market counterparties and supply natural gas to residential and commercial consumers

pursuant to fixed-price and variable-price contracts. For the three months ended September 30, 2024 and

2023, approximately 12% and 11%, respectively, of our retail revenues were derived from the sale of

natural gas.

Recent Developments

Acquisition of Customer Books

In October, 2024, we entered into two asset purchase agreements to acquire up to 100,600 RCEs for a cash purchase

price of up to a maximum $16.9 million paid in cash or funded into escrow accounts. These customers are located in

our existing markets and will begin transferring in December of 2024 and January of 2025.

As we acquire customers under these acquisition agreements, we will make payments to the sellers from the escrow

account. Funds from the escrow account will be released to the sellers as acquired customers transfer from the

sellers to the Company in accordance with the asset purchase agreement, and any unallocated balance will be

returned to the Company once the acquisitions are complete.

Amendment to the Spark HoldCo Agreement

On October 30, 2024, the Company entered into Amendment No. 3 (the “Amendment”) to the Third Amended and

Restated Limited Liability Company Agreement of Spark HoldCo, dated as of March 15, 2017, as amended (the

“Third Restated LLC Agreement”), by and among the Company, Spark HoldCo, and Retailco, LLC. The

Amendment amends the Third Restated LLC Agreement to generally permit the managing members to make non

41

pro rata distributions to the members of Spark Holdco (which are the Company and Retailco, LLC). The terms of

the Amendment were unanimously approved by our Board of Directors.

Residential Customer Equivalents

We measure our number of customers using residential customer equivalents (“RCEs”). The following table shows

our RCEs by segment during the three and nine months ended September 30, 2024:

| | | | |
RCEs: | | | | |

| | | | |
RCEs: | | | | |

(In thousands)

June 30, 2024

Additions

Attrition

September 30, 2024

% Increase

(Decrease)

Retail Electricity | 218 | 17 | 27 | 208 | (5)%
Retail Natural Gas | 120 | 13 | 13 | 120 | —%
Total Retail | 338 | 30 | 40 | 328 | (3)%

| | | | |
| | | | |
RCEs: | | | | |

(In thousands)

December 31, 2023

Additions

Attrition

September 30, 2024

% Increase

(Decrease)

Retail Electricity | 217 | 74 | 83 | 208 | (4)%
Retail Natural Gas | 118 | 32 | 30 | 120 | 2%
Total Retail | 335 | 106 | 113 | 328 | (2)%

| | | | |
| | | | |

The following table details our count of RCEs by geographical location as of September 30, 2024:

| | | | | |
RCEs by Geographic Location: | | | | | |
(In thousands) | Electricity | % of Total | Natural Gas | % of Total | Total | % of Total
New England | 56 | 27% | 12 | 10% | 68 | 21%
Mid-Atlantic | 98 | 47% | 51 | 43% | 149 | 45%
Midwest | 19 | 9% | 24 | 20% | 43 | 13%
Southwest | 35 | 17% | 33 | 27% | 68 | 21%
Total | 208 | 100% | 120 | 100% | 328 | 100%

The geographical locations noted above include the following states:

• 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.

Across our market areas, we have operated under a number of different retail brands. We currently operate under six

retail brands.

Drivers of Our Business

The success of our business and our profitability are impacted by a number of drivers, the most significant of which

are discussed below.

42

Customer Growth

Customer growth is a key driver of our operations. Our ability to acquire customers organically or by acquisition is

important to our success as we experience ongoing customer attrition. Our customer growth strategy includes

growing organically through traditional sales channels complemented by customer portfolio and business

acquisitions.

During the three months ended September 30, 2024, we added approximately 22,900 RCEs primarily through our

various organic sales channels. Although we expect to continue to acquire customers organically in the future, our

sales rate is dependent on market conditions and may slow in future periods.

In April 2024, we entered into an asset purchase agreement to acquire up to approximately 12,556 RCEs for a cash

purchase price of up to a maximum of $2.3 million. These customers began transferring in the second quarter of

2024, and are located in our existing markets. During the three months ended September 30, 2024, we added 7,100

RCEs as a result of the asset purchase agreement. Our ability to realize returns from acquisitions that are acceptable

to us is dependent on our ability to successfully identify, negotiate, finance and integrate acquisitions. We will

continue to evaluate potential acquisitions during the remainder of 2024.

While we remain focused on organic sales and identifying customer portfolio and business acquisitions, we cannot

ensure that our RCE count will remain at current levels or grow. Our RCE count, as well as the margins we earn on

our customers, contribute to our overall profitability, cash flow and ability to pay dividends.

Customer Acquisition Costs

Managing customer acquisition costs is a key component of our profitability. Customer acquisition costs are those

costs related to obtaining customers organically and do not include the cost of acquiring customers through

acquisitions, which are recorded as customer relationships.

Customer Attrition

Customer attrition occurs primarily as a result of: (i) customer initiated switches; (ii) residential moves; (iii)

disconnection resulting from customer payment defaults; and (iv) proactive non-renewal of contracts. Average

monthly customer attrition for the three months ended September 30, 2024 and 2023 was 4.1% and 3.1%,

respectively. Our customer attrition was higher than prior year primarily driven by proactive non-renewals in New

York due to regulatory changes.

Customer Credit Risk

Our credit loss expense for the three months ended September 30, 2024 and 2023 was 1.4% and 1.3%, respectively,

and our credit loss expense for the nine months ended September 30, 2024 and 2023 was 1.4% and 1.8%

respectively, for non-purchase of receivable market ("non-POR") revenues. As the Company has increased sales

activities in non-POR markets and focused on collection efforts, we have experienced an in crease in credit loss

expense during the three months ended September 30, 2024.

Gross Profit

The profit earned between the price we are able to charge customers for retail electricity and natural gas and the cost

to serve customers is a key component of the results of our operations. Prices we are able to charge customers for

retail electricity and natural gas vary with market conditions, and are subject to regulatory restrictions in many of

the markets we serve. Costs to serve customers are tied closely to gas and power commodity markets, which

exposes us to significant variability and uncertainties.

43

Weather Conditions

Weather conditions directly influence the demand for natural gas and electricity and affect the prices of energy

commodities. Our hedging strategy is based on forecasted customer energy usage, which can vary substantially as a

result of weather patterns deviating from historical norms. We are particularly sensitive to this variability in our

residential customer segment where energy usage is highly sensitive to weather conditions that impact heating and

cooling demand.

Asset Optimization

Our asset optimization opportunities primarily arise during the winter heating season when demand for natural gas

is typically at its highest. Given the opportunistic nature of these activities and because we account for these

activities using the mark to market method of accounting, we experience variability in our earnings from our asset

optimization activities from year to year.

Net asset optimization resulted in a loss of $0.5 million and a loss of $0.9 million for the three months ended

September 30, 2024 and three months ended September 30, 2023, respectively. Net asset optimization resulted in a

l oss of $2.6 million and a loss of $5.6 million for the nine months ended September 30, 2024 and nine months

ended September 30, 2023, respectively.

Non-GAAP Performance Measures

We use the Non-GAAP performance measures of Adjusted EBITDA and Retail Gross Margin to evaluate and

measure our operating results as follows:

| | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30,
(in thousands) | 2024 | | 2023 | | 2024 | | 2023
Adjusted EBITDA (1) | $10,327 | | $12,756 | | $37,758 | | $43,580
Retail Gross Margin | $30,005 | | $31,888 | | $99,137 | | $102,944

(1) Adjusted EBITDA for three and nine months ended September 30, 2024 includes an add back of $0.5 million and $2.0 million,

respectively, related to merger agreement expense.

Adjusted EBITDA. We define “Adjusted EBITDA” as EBITDA less (i) customer acquisition costs incurred in the

current period, plus or minus (ii) net (loss) gain on derivative instruments, and (iii) net current period cash

settlements on derivative instruments, plus (iv) non-cash compensation expense, and (v) other non-cash and non-

recurring operating items. EBITDA is defined as net income (loss) before the provision for income taxes, interest

expense and depreciation and amortization. This conforms to the calculation of Adjusted EBITDA in our Senior

Credit Facility.

We deduct all current period customer acquisition costs (representing spending for organic customer acquisitions) in

the Adjusted EBITDA calculation because such costs reflect a cash outlay in the period in which they are incurred,

even though we capitalize and amortize such costs over two years. We do not deduct the cost of customer

acquisitions through acquisitions of businesses or portfolios of customers in calculating Adjusted EBITDA.

We deduct our net gains (losses) on derivative instruments, excluding current period cash settlements, from the

Adjusted EBITDA calculation in order to remove the non-cash impact of net gains and losses on these instruments.

We also deduct non-cash compensation expense that results from the issuance of restricted stock units under our

long-term incentive plan due to the non-cash nature of the expense.

We adjust from time to time other non-cash or unusual and/or infrequent charges due to either their non-cash nature

or their infrequency. We have historically included the financial impact of weather variability in the calculation of

Adjusted EBITDA.

44

We believe that the presentation of Adjusted EBITDA provides information useful to investors in assessing our

liquidity and financial condition and results of operations and that Adjusted EBITDA is also useful to investors as a

financial indicator of our ability to incur and service debt, pay dividends and fund capital expenditures. Adjusted

EBITDA is a supplemental financial measure that management and external users of our consolidated financial

statements, such as industry analysts, investors, commercial banks and rating agencies, use to assess the following:

• our operating performance as compared to other publicly traded companies in the retail energy industry,

without regard to financing methods, capital structure, historical cost basis and specific items not reflective

of ongoing operations;

• the ability of our assets to generate earnings sufficient to support our proposed cash dividends;

• our ability to fund capital expenditures (including customer acquisition costs) and incur and service debt;

and

• our compliance with financial debt covenants. (Refer to Note 9 “Debt” to Part I, Item 1 of this Report for

discussion of the material terms of our Senior Credit Facility, including the covenant requirements for our

Minimum Fixed Charge Coverage Ratio and Maximum Total Leverage Ratio)

The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by

(used in) operating activities. The following table presents a reconciliation of Adjusted EBITDA to these GAAP

measures for each of the periods indicated.

| | | | | | |

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands) | 2024 | | 2023 | | 2024 | | 2023
Reconciliation of Adjusted EBITDA to net income: | | | | | | |
Net income | $1,655 | | $14,659 | | $36,414 | | $26,974
Depreciation and amortization | 2,502 | | 1,816 | | 6,752 | | 7,146
Interest expense | 1,667 | | 2,233 | | 5,339 | | 7,377
Income tax expense | 1,694 | | 3,355 | | 9,654 | | 6,599
EBITDA | 7,518 | | 22,063 | | 58,159 | | 48,096
Less: | | | | | | |
Net, loss on derivative instruments | (11,622) | | (6,991) | | (12,647) | | (50,428)
Net cash settlements on derivative instruments | 7,145 | | 15,100 | | 30,337 | | 51,767
Customer acquisition costs | 2,119 | | 1,698 | | 7,145 | | 4,961
Plus: | | | | | | |
Non-cash compensation expense | (31) | | 500 | | 2,411 | | 1,784
Merger agreement expense | 482 | | — | | 2,023 | | —
Adjusted EBITDA | $10,327 | | $12,756 | | $37,758 | | $43,580

The following table presents a reconciliation of Adjusted EBITDA to net cash provided by operating activities for

each of the periods indicated.

45

| | | | | | |

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands) | 2024 | | 2023 | | 2024 | | 2023

Reconciliation of Adjusted EBITDA to net cash

provided by operating activities:

Net cash provided by operating activities | $20,123 | | $6,161 | | $48,450 | | $40,857
Amortization of deferred financing costs | (167) | | (206) | | (685) | | (619)
Bad debt expense | (537) | | (829) | | (1,858) | | (2,717)
Interest expense | 1,667 | | 2,233 | | 5,339 | | 7,377
Income tax expense | 1,694 | | 3,355 | | 9,654 | | 6,599
Merger agreement expense | 482 | | — | | 2,023 | | —
Accounts receivable, prepaids, current assets | (10,541) | | 6,609 | | (30,378) | | (31,254)
Inventory | 881 | | 1,104 | | (227) | | (1,378)
Accounts payable and accrued liabilities | (2,128) | | (3,432) | | 8,532 | | 28,801
Other | (1,147) | | (2,239) | | (3,092) | | (4,086)
Adjusted EBITDA | $10,327 | | $12,756 | | $37,758 | | $43,580
Cash Flow Data: | | | | | | |
Net cash provided by operating activities | $20,123 | | $6,161 | | $48,450 | | $40,857
Net cash used in investing activities | $(2,217) | | $(369) | | $(2,947) | | $(1,144)
Net cash used in financing activities | $(6,713) | | $(7,714) | | $(21,016) | | $(29,927)

Retail Gross Margin. We define retail gross margin as gross profit less (i) net asset optimization revenues

(expenses), (ii) net gains (losses) on non-trading derivative instruments, (iii) net current period cash settlements on

non-trading derivative instruments and (iv) gains (losses) from non-recurring events (including non-recurring

market volatility). Retail gross margin is included as a supplemental disclosure because it is a primary performance

measure used by our management to determine the performance of our retail natural gas and electricity segments as

a result of recurring operations. As an indicator of our retail energy business’s operating performance, retail gross

margin should not be considered an alternative to, or more meaningful than, gross profit, its most directly

comparable financial measure calculated and presented in accordance with GAAP.

We believe retail gross margin provides information useful to investors as an indicator of our retail energy

business’s operating performance.

The GAAP measure most directly comparable to Retail Gross Margin is gross profit. The following table presents a

reconciliation of Retail Gross Margin to gross profit for each of the periods indicated.

46

| | | | | | |

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands) | 2024 | | 2023 | | 2024 | | 2023
Reconciliation of Retail Gross Margin to Gross Profit | | | | | | |
Total Revenue | $93,774 | | $110,239 | | $294,526 | | $333,490
Less: | | | | | | |
Retail cost of revenues | 68,617 | | 71,050 | | 180,576 | | 234,417
Gross Profit | $25,157 | | $39,189 | | $113,950 | | $99,073
Less: | | | | | | |
Net asset optimization expense | (482) | | (936) | | (2,610) | | (5,568)
Loss on non-trading derivative instruments | (10,979) | | (6,193) | | (12,115) | | (49,002)

Cash settlements on non-trading derivative

instruments

6,613

14,430

29,538

50,699

Retail Gross Margin | $30,005 | | $31,888 | | $99,137 | | $102,944
Retail Gross Margin - Retail Electricity Segment | $24,574 | | $25,991 | | $68,796 | | $69,454
Retail Gross Margin - Retail Natural Gas Segment | $5,488 | | $5,160 | | $29,701 | | $32,667
Retail Gross Margin - Other | $(57) | | $737 | | $640 | | $823

Our non-GAAP financial measures of Adjusted EBITDA and Retail Gross Margin should not be considered as

alternatives to gross profit. Adjusted EBITDA and Retail Gross Margin are not presentations made in accordance

with GAAP and have limitations as analytical tools. You should not consider Adjusted EBITDA or Retail Gross

Margin in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted

EBITDA and Retail Gross Margin exclude some, but not all, items that affect gross profit, and are defined

differently by different companies in our industry, our definition of Adjusted EBITDA and Retail Gross Margin

may not be comparable to similarly titled measures of other companies.

Management compensates for the limitations of Adjusted EBITDA and Retail Gross Margin as analytical tools by

reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating

these data points into management’s decision-making process.

47

Consolidated Results of Operations

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

| | | | | | |
(In Thousands) | Three Months Ended September 30, | | Nine Months Ended September 30,
| 2024 | | 2023 | | 2024 | | 2023
Revenues: | | | | | | |
Retail revenues | $94,254 | | $109,753 | | $295,602 | | $337,499
Net asset optimization expense | (482) | | (936) | | (2,610) | | (5,568)
Other revenue | 2 | | 1,422 | | 1,534 | | 1,559
Total Revenues | 93,774 | | 110,239 | | 294,526 | | 333,490
Operating Expenses: | | | | | | |
Retail cost of revenues | 68,617 | | 71,050 | | 180,576 | | 234,417
General and administrative expense | 17,655 | | 17,135 | | 55,850 | | 51,073
Depreciation and amortization | 2,502 | | 1,816 | | 6,752 | | 7,146
Total Operating Expenses | 88,774 | | 90,001 | | 243,178 | | 292,636
Operating income | 5,000 | | 20,238 | | 51,348 | | 40,854
Other (expense)/income: | | | | | | |
Interest expense | (1,667) | | (2,233) | | (5,339) | | (7,377)
Interest and other income | 16 | | 9 | | 59 | | 96
Total other expense | (1,651) | | (2,224) | | (5,280) | | (7,281)
Income before income tax expense | 3,349 | | 18,014 | | 46,068 | | 33,573
Income tax expense | 1,694 | | 3,355 | | 9,654 | | 6,599
Net income | $1,655 | | $14,659 | | $36,414 | | $26,974
Other Performance Metrics: | | | | | | |
Adjusted EBITDA (1) (2) | $10,327 | | $12,756 | | $37,758 | | $43,580
Retail Gross Margin (1) | $30,005 | | $31,888 | | $99,137 | | $102,944
Customer Acquisition Costs | $2,119 | | $1,698 | | $7,145 | | $4,961
Average Monthly RCE Attrition | 4.1% | | 3.1% | | 3.8% | | 3.5%

(1) Adjusted EBITDA and Retail Gross Margin are non-GAAP financial measures. See “ — Non-GAAP Performance Measures” for a

reconciliation of Adjusted EBITDA and Retail Gross Margin to their most directly comparable GAAP financial measures.

(2) Adjusted EBITDA for the three and nine months ended September 30, 2024 includes an add back of $0.5 million and $2.0 million,

respectively, related to merger agreement expense.

Total Revenues. Total revenues for the three months ended September 30, 2024 were approximately $93.8 million, a

decrease of approximately $16.4 million, or 15%, from approximately $110.2 million for the three months ended

September 30, 2023, as indicated in the table below (in millions). This decrease was primarily due to lower

electricity volumes sold as a result of smaller electricity book and lower electricity rates in the third quarter of 2024

as compared to the third quarter of 2023.

|
Change in electricity volumes sold | $(10.1)
Change in natural gas volumes sold | (0.8)
Change in electricity unit revenue per MWh | (5.1)
Change in natural gas unit revenue per MMBtu | 0.6
Change in other revenue | (1.5)
Change in net asset optimization expense | 0.5
Change in total revenues | $(16.4)

48

Retail Cost of Revenues. Total retail cost of revenues for the three months ended September 30, 2024 was

approximately $68.6 million, a decrease of approximately $2.5 million, or 4%, from approximately $71.1 million

for the three months ended September 30, 2023, as indicated in the table below (in millions). This decrease was

primarily due to a lower electricity volumes sold as a result of smaller electricity book and lower electricity unit cost

in the third quarter of 2024 as compared to the third quarter of 2023, partially offset by change in value of our retail

derivative portfolio.

|
Change in electricity volumes sold | $(7.4)
Change in natural gas volumes sold | (0.5)
Change in electricity unit cost per MWh | (6.4)
Change in natural gas unit cost per MMBtu | (0.1)
Change in other costs | (0.6)
Change in value of retail derivative portfolio | 12.5
Change in retail cost of revenues | $(2.5)

General and Administrative Expense. General and administrative expense for the three months ended September 30,

2024 was approximately $17.7 million, an increase of approximately $0.6 million, or 4%, as compared to $17.1

million for the three months ended September 30, 2023. This increase was primarily attributable to an increase in

legal and regulatory expense in the third quarter of 2024 compared to the third quarter of 2023.

Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended

September 30, 2024 was approximately $2.5 million, an increase of approximately $0.7 million, or 39%, from

approximately $1.8 million for the three months ended September 30, 2023. This increase was primarily due to an

increased amortization expense associated with customer intangibles.

Customer Acquisition Cost. Customer acquisition cost for the three months ended September 30, 2024 was

approximately $2.1 million, an increase of approximately $0.4 million, or 24% from approximately $1.7 million

three months ended September 30, 2023, primarily due to an increase in the sales activity in the third quarter of

2024 as compared to the third quarter of 2023.

49

Nine months ended September 30, 2024 Compared to Nine months ended September 30, 2023

Total Revenues. Total revenues for the nine months ended September 30, 2024 were approximately $294.5 million,

a decrease of approximately $39.0 million, or 12%, from approximately $333.5 million for the nine months ended

September 30, 2023, as indicated in the table below (in millions). This decrease was primarily due to lower

electricity and gas unit revenue as a result of decreased electricity and gas rates, partially offset by a decrease in net

asset optimization expense during the first nine months of 2024 as compared to the first nine months of 2023.

|
Change in electricity volumes sold | $2.6
Change in natural gas volumes sold | (3.9)
Change in electricity unit revenue per MWh | (26.9)
Change in natural gas unit revenue per MMBtu | (13.6)
Change in other revenue | (0.1)
Change in net asset optimization expense | 2.9
Change in total revenues | $(39.0)

Retail Cost of Revenues. Total retail cost of revenues for the nine months ended September 30, 2024 was

approximately $180.6 million, a decrease of approximately $53.8 million, or 23%, from approximately $234.4

million for the nine months ended September 30, 2023, as indicated in the table below (in millions). This decrease

was primarily due to lower electricity and gas costs due to a lower commodity price environment in 2024, and a

change in the value of our retail derivative portfolio during the first nine months of 2024 as compared to the first

nine months of 2023.

|
Change in electricity volumes sold | $1.9
Change in natural gas volumes sold | (2.4)
Change in electricity unit cost per MWh | (25.6)
Change in natural gas unit cost per MMBtu | (12.2)
Change in other costs | 0.2
Change in value of retail derivative portfolio | (15.7)
Change in retail cost of revenues | $(53.8)

General and Administrative Expense. General and administrative expense for the nine months ended September 30,

2024 was approximately $55.9 million, an increase of approximately $4.8 million, or 9%, as compared to $51.1

million for the nine months ended September 30, 2023. This increase was primarily attributable to an increase in

stock compensation expense and legal fees, both of which were related to the Merger in 2024, and an increase in

legal and regulatory expense in the first nine months of 2024 compared to the first nine months of 2023.

Depreciation and Amortization Expense. Depreciation and amortization expense for the nine months ended

September 30, 2024 was approximately $6.8 million, a decrease of approximately $0.3 million, or 4%, from

approximately $7.1 million for the nine months ended September 30, 2023. This decrease was primarily due to the

decreased amortization expense associated with customer relationship intangibles.

Customer Acquisition Cost. Customer acquisition cost for the nine months ended September 30, 2024 was

approximately $7.1 million, an increase of approximately $2.1 million, or 42%, from approximately $5.0 million for

the nine months ended September 30, 2023. This increase was primarily due to increased sales activity in the first

nine months of 2024 as compared to first nine months of of 2023.

50

Operating Segment Results

| | | | | | |

(in thousands, except volume and per unit operating data)

Three Months Ended

September 30,

Nine Months Ended

September 30,

| 2024 | | 2023 | | 2024 | | 2023
| | | | | | |
Retail Electricity Segment | | | | | | |
Total Revenues | $82,615 | | $97,855 | | $231,092 | | $255,447
Retail Cost of Revenues | 63,334 | | 64,575 | | 149,592 | | 183,017

Less: Net gain (loss) on non-trading derivatives, net of cash

settlements

(5,293)

7,289

12,704

2,976

Retail Gross Margin (1) — Electricity | $24,574 | | $25,991 | | $68,796 | | $69,454
Volumes — Electricity (MWhs) | 563,016 | | 627,851 | | 1,556,692 | | 1,541,182
Retail Gross Margin (2) — Electricity per MWh | $43.65 | | $41.40 | | $44.19 | | $45.07
| | | | | | |
Retail Natural Gas Segment | | | | | | |
Total Revenues | $11,639 | | $11,898 | | $64,510 | | $82,052
Retail Cost of Revenues | 5,224 | | 5,790 | | 30,090 | | 50,664

Less: Net gain (loss) on non-trading derivatives, net of cash

settlements

927

948

4,719

(1,279)

Retail Gross Margin (1) — Gas | $5,488 | | $5,160 | | $29,701 | | $32,667
Volumes — Gas (MMBtus) | 1,320,897 | | 1,419,291 | | 7,648,766 | | 8,031,902
Retail Gross Margin (2) — Gas per MMBtu | $4.16 | | $3.64 | | $3.88 | | $4.07

(1) Reflects the Retail Gross Margin attributable to our Retail Electricity Segment or Retail Natural Gas Segment, as applicable. Retail Gross

Margin is a non-GAAP financial measure. See “Non-GAAP Performance Measures” for a reconciliation of Retail Gross Margin to most

directly comparable financial measures presented in accordance with GAAP.

(2) Reflects the Retail Gross Margin for the Retail Electricity Segment or Retail Natural Gas Segment, as applicable, divided by the total

volumes in MWh or MMBtu, respectively.

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Retail Electricity Segment

Total revenues for the Retail Electricity Segment for the three months ended September 30, 2024 were

approximately $82.6 million, a decrease of approximately $15.2 million, or 16%, from approximately $97.8 million

for the three months ended September 30, 2023. This decrease was largely due to lower electricity volumes of $10.1

million as a result of a smaller electricity customer book as compared to the third quarter of 2023 and lower

electricity prices, which resulted in a decrease of $5.1 million.

Retail cost of revenues for the Retail Electricity Segment for the three months ended September 30, 2024 were

approximately $63.3 million, a decrease of approximately $1.2 million, or 2%, from approximately $64.5 million

for the three months ended September 30, 2023. This decrease was primarily due to lower volumes due to a smaller

electricity customer book, resulting in a decrease of $7.4 million, a decrease in electricity costs, resulting in a

decrease of $6.4 million, offset by a change in the fair value of our retail derivative portfolio used for hedging,

which resulted in a increase of $12.6 million.

Retail gross margin for the Retail Electricity Segment for the three months ended September 30, 2024 was

approximately $24.6 million, a decrease of approximately $1.4 million, or 5%, from approximately $26.0 million

for the three months ended September 30, 2023, as indicated in the table below (in millions).

51

|
Change in volumes sold | $(2.7)
Change in unit margin per MWh | 1.3
Change in retail electricity segment retail gross margin | $(1.4)

Retail Natural Gas Segment

Total revenues for the Retail Natural Gas Segment for the three months ended September 30, 2024 were

approximately $11.6 million, a decrease of approximately $0.3 million, or 2%, from approximately $11.9 million

for the three months ended September 30, 2023. This decrease was attributable to lower gas volumes sold of 0.8

million, offset by higher natural gas prices, which increased total revenues by $0.6 million.

Retail cost of revenues for the Retail Natural Gas Segment for the three months ended September 30, 2024 were

approximately $5.2 million, a decrease of $0.6 million, or 10%, from approximately $5.8 million for the three

months ended September 30, 2023. This decrease was primarily due to lower natural gas volumes, resulting in a

decrease of 0.5 million.

Retail gross margin for the Retail Natural Gas Segment for the three months ended September 30, 2024 was

approximately $5.5 million, an increase of approximately $0.3 million, or 6%, from approximately $5.2 million for

the three months ended September 30, 2023, as indicated in the table below (in millions).

|
Change in volumes sold | $(0.4)
Change in unit margin per MMBtu | 0.7
Change in retail natural gas segment retail gross margin | $0.3

52

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Retail Electricity Segment

Total revenues for the Retail Electricity Segment for the nine months ended September 30, 2024 were

approximately $231.1 million, a decrease of approximately $24.3 million, or 10%, from approximately $255.4

million for the nine months ended September 30, 2023. This decrease was largely due to lower electricity prices,

resulting in a decrease of $26.9 million, offset by higher volumes, resulting in an increase of $2.6 million.

Retail cost of revenues for the Retail Electricity Segment for the nine months ended September 30, 2024 was

approximately $149.6 million, a decrease of approximately $33.4 million, or 18%, from approximately $183.0

million for the nine months ended September 30, 2023. This decrease was primarily due to a lower electricity costs

of $25.6 million due to a l ower commodity price environment in 2024, a change in the value of our derivative

portfolio used for hedging resulting in a decrease of $9.7 million, partially offset by an increase in electricity

volumes sold resulting in an increase of $1.9 million.

Retail gross margin for the Retail Electricity Segment for the nine months ended September 30, 2024 was

approximately $68.8 million, a decrease of approximately $0.7 million, or 1%, from approximately $69.5 million

for the nine months ended September 30, 2023, as indicated in the table below (in millions).

|
Change in volumes sold | $0.7
Change in unit margin per MWh | (1.4)
Change in retail electricity segment retail gross margin | $(0.7)

Retail Natural Gas Segment

Total revenues for the Retail Natural Gas Segment for the nine months ended September 30, 2024 were

approximately $64.5 million, a decrease of approximately $17.5 million, or 21%, from approximately $82.0 million

for the nine months ended September 30, 2023. This decrease was attributable to lower rates, which resulted in a

decrease in total revenues of $13.6 million and a decrease in volumes of $3.9 million.

Retail cost of revenues for the Retail Natural Gas Segment for the nine months ended September 30, 2024 was

approximately $30.1 million, a decrease of approximately $20.6 million, or 41%, from approximately $50.7 million

for the nine months ended September 30, 2023. The decrease was primarily attributable to a decrease in natural gas

cost of $12.2 million, a decrease in volumes sold resulting in a decrease of $2.4 million and a change in the value of

our derivative portfolio used for hedging, which resulted in a decrease of $6.0 million.

Retail gross margin for the Retail Natural Gas Segment for the nine months ended September 30, 2024 was

approximately $29.7 million, a decrease of approximately $3.0 million, or 9%, from approximately $32.7 million

for the nine months ended September 30, 2023, as indicated in the table below (in millions).

|
Change in volumes sold | $(1.6)
Change in unit margin per MMBtu | (1.4)
Change in retail natural gas segment retail gross margin | $(3.0)

53

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash generated from operations and borrowings under our Senior Credit

Facility. Our principal liquidity requirements are to meet our financial commitments, finance current operations,

fund organic growth and/or acquisitions and service debt and pay dividends. Our liquidity requirements fluctuate

with our level of customer acquisition costs, acquisitions, collateral posting requirements on our derivative

instruments portfolio, distributions, the effects of the timing between the settlement of payables and receivables,

including the effect of bad debts, weather conditions, and our general working capital needs for ongoing operations.

Estimating our liquidity requirements is highly dependent on then-current market conditions, forward prices for

natural gas and electricity, market volatility and our then existing capital structure and requirements.

We believe that cash generated from operations and our available liquidity sources will be sufficient to sustain

current operations, pay dividends to the holders of Series A Preferred Stock, and to pay required taxes. Our ability

to pay dividends to the holders of the Series A Preferred Stock in the future will ultimately depend on our RCE

count, margins, profitability and cash flow, and the covenants under our Senior Credit Facility.

Liquidity Position

The following table details our available liquidity as of September 30, 2024:

|
($ in thousands) | September 30, 2024
Cash and cash equivalents | $66,572
Senior Credit Facility Availability (1) | 83,935
Subordinated Debt Facility Availability (2) | 25,000
Total Liquidity | $175,507

(1) Reflects amount of Letters of Credit that could be issued based on existing covenants as of September 30, 2024.

(2) The availability of the Subordinated Facility is dependent on ’Mr. Maxwell’s discretion. See “—Sources of Liquidity —Subordinated

Debt Facility.”

Borrowings and related posting of letters of credit under our Senior Credit Facility are subject to material variations

on a seasonal basis due to the timing of commodity purchases to satisfy natural gas inventory requirements and to

meet customer demands during periods of peak usage. Additionally, borrowings are subject to borrowing base and

covenant restrictions.

Cash Flows

Our cash flows were as follows for the respective periods (in thousands):

| | |
| Nine Months Ended September 30,
| 2024 | | 2023
Net cash provided by operating activities | $48,450 | | $40,857
Net cash used in investing activities | $(2,947) | | $(1,144)
Net cash used in financing activities | $(21,016) | | $(29,927)

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Cash Flows Provided by Operating Activities. Cash flows provided by operating activities for the nine months

ended September 30, 2024 increased by $7.6 million compared to the nine months ended September 30, 2023. The

increase was primarily the result of changes in working capital for the nine months ended September 30, 2024.

54

Cash Flows Used in Investing Activities. Cash flows used in investing activities increased by $1.8 million for the

nine months ended September 30, 2024. The increase was primarily the result of customer acquisitions during the

nine months ended September 30, 2024.

Cash Flows Used in Financing Activities. Cash flows used in financing activities decreased by $8.9 million for the

nine months ended September 30, 2024, primarily due to a decreas e in sub-debt paydown of $20.0 million, decrease

in dividends paid to Class A common stockholders of $2.9 million, offset by an increase in net paydown of our

Senior Credit Facility of $13.0 million, during the nine months ended September 30, 2024.

Sources of Liquidity and Capital Resources

For a description of the terms and conditions of our Senior Credit Facility and First Amendment, including

descriptions of the interest rate, commitment fee, covenants and terms of default, please see Note 9 “Debt” in the

notes to our condensed consolidated financial statements.

Amended and Restated Subordinated Debt Facility

See Note 9 “Debt” for further information regarding the Subordinated Debt Facility.

Uses of Liquidity and Capital Resources

Repayment of Current Portion of Senior Credit Facility

Our Senior Credit Facility matures in June 2027, and thu s, no amounts are due currently. However, due to the

revolving nature of the facility, excess cash available is generally used to reduce the balance outstanding, which at

September 30, 2024 was $89.0 million. The current variable interest rate on the facility at September 30, 2024 was

8.09%.

Customer Acquisitions

Our customer acquisition strategy consists of customer growth obtained through organic customer additions as well

as opportunistic acquisitions. During the three months ended September 30, 2024 and 2023, we spent a total of $2.1

million and $1.7 million, respectively, on organic customer acquisitions.

Capital Expenditures

Our capital requirements each year are relatively low and generally consist of minor purchases of equipment or

information system upgrades and improvements. Capital expenditures for the nine months ended September 30,

2024 and 2023 included $1.1 million and $1.1 million, respectively, related to information systems improvements.

Dividends and Distributions

For the three and nine months ended September 30, 2024 we paid $2.7 million and $8.2 million in dividends to

holders of the Series A Preferred Stock. As of September 30, 2024, we had accrued $2.7 million related to dividends

to holders of the Series A Preferred Stock. This dividend was paid on October 15, 2024. For a more detailed

explanation of the Company's Series A Preferred Stock, please see Note 5 "Preferred Stock" in the notes to our

condensed consolidated financial statements.

For the full year ended December 31, 2024 , taking into consideration the amount of dividends already paid and

estimating future dividends using the stated most recent dividend rate paid on the Series A Preferred Stock, we

would be required to pay dividends of $10.8 million in the aggregate based on the Series A Preferred Stock

outstanding as of September 30, 2024.

55

On October 16, 2024, we declared a dividend in the amount of $0.71847 per share for the Series A Preferred Stock

for the third quarter of 2024. Dividends on Series A Preferred Stock will be paid on January 15, 2025 to holders of

record on January 1, 2025.

Future dividends to the holders of Series A Preferred Stock are within the discretion of our Board of Directors, and

will depend upon our operations, our financial condition, capital requirements and investment opportunities, the

performance of our business, cash flows, RCE counts and the margins we receive, as well as restrictions under our

Senior Credit Facility. A dividend penalty event would occur if dividends on the Series A Preferred Stock are in

arrears for six or more quarterly dividend periods, in which case the dividend rate on the Series A Preferred Stock

would increase by 2.00% per annum, and the holders of the Series A Preferred Stock would be entitled to elect two

members to our Board of Directors, until the dividend penalty event is cured.

56

Off-Balance Sheet Arrangements

As of September 30, 2024, we had no material “off-balance sheet arrangements.”

Related Party Transactions

For a discussion of related party transactions, see Note 13 “Transactions with Affiliates” to Part I, Item 1 of this

Report.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are described in “Management's Discussion and Analysis of Financial

Condition and Results of Operations—Critical Accounting Policies and Estimates” in our 2023 Form 10-K. There

have been no changes to these policies and estimates since the date of our 2023 Form 10-K.

Refer to Note 2 “Basis of Presentation and Summary of Significant Accounting Policies” to Part I, Item 1 of this

Report for a discussion on recent accounting pronouncements.

Contingencies

In the ordinary course of business, we may become party to lawsuits, administrative proceedings and governmental

investigations, including regulatory and other matters. Except as described in Note 12 “Commitments and

Contingencies” to Part I, Item 1 of this Report, as of September 30, 2024, management did not believe that any of

our outstanding lawsuits, administrative proceedings or investigations could result in a material adverse effect.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are

recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. For a

discussion of the status of current legal and regulatory matters, see Note 12 “Commitments and Contingencies” to

Part I, Item 1 of this Report.

57

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to our operations result primarily from changes in commodity prices and interest rates, as well

as counterparty credit risk. We employ established risk management policies and procedures to manage, measure,

and limit our exposure to these risks.

Commodity Price Risk

We hedge and procure our energy requirements from various wholesale energy markets, including both physical and

financial markets and through short and long-term contracts. Our financial results are largely dependent on the

margin we are able to realize between the wholesale purchase price of natural gas and electricity plus related costs

and the retail sales price we charge our customers for these commodities. We actively manage our commodity price

risk by entering into various derivative or non-derivative instruments to hedge the variability in future cash flows

from fixed-price forecasted sales and purchases of natural gas and electricity in connection with our retail energy

operations. These instruments include forwards, futures, swaps, and option contracts traded on various exchanges,

such as NYMEX and Intercontinental Exchange, or ICE, as well as over-the-counter markets. These contracts have

varying terms and durations, which range from a few days to several years, depending on the instrument. We also

utilize similar derivative contracts in connection with our asset optimization activities to attempt to generate

incremental gross margin by effecting transactions in markets where we have a retail presence. Generally, any such

instruments that are entered into to support our retail electricity and natural gas business are categorized as having

been entered into for non-trading purposes, and instruments entered into for any other purpose are categorized as

having been entered into for trading purposes.

Our net (loss)/gain on our non-trading derivative instruments, net of cash settlements, was $(4.4) million and $8.2

million for three months ended September 30, 2024 and 2023, respectively and $17.4 million and $1.7 million for

nine months ended September 30, 2024 and 2023, respectively.

We have adopted risk management policies to measure and limit market risk associated with our fixed-price

portfolio and our hedging activities. For additional information regarding our commodity price risk and our risk

management policies, see “Item 1A—Risk Factors” in our 2023 Form 10-K.

We measure the commodity risk of our non-trading energy derivatives using a sensitivity analysis on our net open

position. As of September 30, 2024, our Gas Non-Trading Fixed Price Open Position (hedges net of retail load) was

a short position of 592,494 MMBtu. An increase of 10% in the market prices (NYMEX) from their September 30,

2024, levels would have de creased the fair market value of our net non-trading energy portfolio by $0.1 million.

Likewise, a decrease of 10% in the market prices (NYMEX) from their September 30, 2024, levels would have

increased the fair market value of our non-trading energy derivatives by $0.1 million. As of September 30, 2024,

our Electricity Non-Trading Fixed Price Open Position (hedges net of retail load) was a short position of 97,511

MWhs. An increase of 10% in the forward market prices from their September 30, 2024, levels would have

decreased the fair market value of our net non-trading energy portfolio by $0.7 million. Likewise, a decrease of 10%

in the forward market prices from their September 30, 2024, levels would have increased the fair market value of

our non-trading energy derivatives by $0.7 million.

Credit Risk

In many of the utility services territories where we conduct business, Purchase of Receivables (“POR”) programs

have been established, whereby the local regulated utility purchases our receivables, and becomes responsible for

billing the customer and collecting payment from the customer. This service results in substantially all of our credit

risk being with the utility and not to our end-use customer in these territories. Approximately 60% and 54% of our

retail revenues were derived from territories in which substantially all of our credit risk was with local regulated

utility companies for the three months ended September 30, 2024 and 2023, respectively, and 60% and 54% for nine

months ended September 30, 2024 and 2023, respectively, all of which had investment grade ratings as of such date.

We paid these local regulated utilities a weighted average discount of 1.2% and 1.0%, for the three months ended

58

September 30, 2024 and 2023, respectively, and 1.2% and 1.0% for nine months ended September 30, 2024 and

2023, respectively of total revenues for customer credit risk protection. In certain of the POR markets in which we

operate, the utilities limit their collections exposure by retaining the ability to transfer a delinquent account back to

us for collection when collections are past due for a specified period.

If our collection efforts are unsuccessful, we return the account to the local regulated utility for termination of

service. Under these service programs, we are exposed to credit risk related to payment for services rendered during

the time between when the customer is transferred to us by the local regulated utility and the time we return the

customer to the utility for termination of service, which is generally one to two billing periods. We may also realize

a loss on fixed-price customers in this scenario due to the fact that we will have already fully hedged the customer’s

expected commodity usage for the life of the contract.

In non-POR markets (and in POR markets where we may choose to direct bill our customers), we manage customer

credit risk through formal credit review in the case of commercial customers, and credit score screening, deposits

and disconnection for non-payment, in the case of residential customers. Economic conditions may affect our

customers’ ability to pay bills in a timely manner, which could increase cust omer delinquencies and may lead to an

i ncrease in bad debt expense. Our bad debt expense for the three months ended September 30, 2024 and 2023 was

1.4% and 1.3% of non-POR market retail revenues, respectively and our bad debt expense for the nine months

ended September 30, 2024 and 2023 was 1.4% and 1.8% of non-POR market retail revenues, respectively. Se e

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Drivers of Our

Business—Customer Credit Risk” for an analysis of our bad debt expense related to non-POR markets during the

nine months ended September 30, 2024.

We are exposed to wholesale counterparty credit risk in our retail and asset optimization activities. We manage this

risk at a counterparty level and secure our exposure with collateral or guarantees when needed. At September 30,

2024, approximately $0.5 million of our total exposure of $0.6 million was either with a non-investment grade

counterparty or otherwise not secured with collateral or a guarantee. The credit worthiness of the remaining

exposure with other customers was evaluated with no material allowance recorded at September 30, 2024.

Interest Rate Risk

We are exposed to fluctuations in interest rates under our variable-price debt obligations, including our Senior

Credit Facility and our Series A Preferred Stock.

At September 30, 2024, we were co-borrowers under the Senior Credit Facility, under which $89.0 million of

variable rate indebtedness was outstanding. Based on the average amount of our variable rate indebtedness

outstanding during the three months ended September 30, 2024, a 1.0% increase in interest rates would have

resulted in additional annual interest expense of approximately $0.9 million.

On October 16, 2024, our Board of Directors declared a quarterly cash dividend in the amount of $0.71847 per

share for the Series A Preferred Stock for the third quarter of 2024 for an aggregate amount of $2.7 million for the

qu arter. Based on the Series A Preferred Stock outstanding on September 30, 2024, a 1.0% increase in interest rates

would have resulted in additional dividends of $0.2 million for the quarter.

59

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has

evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this

Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and

15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure

that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act

is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that

information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is

accumulated and communicated to our management, including our principal executive and principal financial

officers or persons performing similar functions, as appropriate to allow timely decisions regarding required

disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated,

can provide only reasonable assurance of achieving their objectives, and management necessarily applies its

judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this evaluation,

management concluded that our disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation

required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended

September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over

financial reporting.

60

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 12 “Commitments and Contingencies” to Part I, Item 1 of this Report, which is incorporated by reference

into this Part II, Item 1, for a description of certain ligation, legal proceedings, and regulatory matters.

Item 1A. Risk Factors.

Holders of Series A Preferred Stock and potential investors in Series A Preferred Stock should carefully consider

the risk factors under “Item 1A— Risk Factors” in our 2023 Form 10-K. There has been no material change i n our

risk factors from those described in the 2023 Form 10-K. except that, as a result of the Merger, as of June 13, 2024,

Mr. Maxwell and his affiliates became the owners of all of the issued and outstanding shares of the Company's

Class A common stock and Class B common stock, and there are no remaining public holders of Class A common

stock. As a result, risk factors described in the 2023 Form 10-K relating to public holders of Class A common stock

are no longer applicable. Our description of risks are not the sole risks for investors in Series A Preferred Stock.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may

materially adversely affect our business, financial condition or results of operations.

61

| | | | | | | | |
Item 6. Exhibits

The exhibits required to be filed by Item 6 are set forth in the Exhibit Index included below.

62

| | | | |
INDEX TO EXHIBITS
| | Incorporated by Reference

Exhibit

Exhibit Description

Form

Exhibit

Number

Filing Date

SEC File No.

2.1#

Membership Interest Purchase Agreement, by and among Spark

Energy, Inc., Spark HoldCo, LLC, Provider Power, LLC, Kevin

B. Dean and Emile L. Clavet, dated as of May 3, 2016.

10-Q

2.1

5/5/2016

001-36559

2.2#

Membership Interest Purchase Agreement, by and among Spark

Energy, Inc., Spark HoldCo, LLC, Retailco, LLC and National

Gas & Electric, LLC, dated as of May 3, 2016.

10-Q

2.2

5/5/2016

001-36559

2.3#

Amendment No. 1 to the Membership Interest Purchase

Agreement, dated as of July 26, 2016, by and among Spark

Energy, Inc., Spark HoldCo, LLC, Provider Power, LLC, Kevin

B. Dean and Emile L. Clavet.

8-K

2.1

8/1/2016

001-36559

2.4#

Membership Interest and Stock Purchase Agreement, by and

among Spark Energy, Inc., CenStar Energy Corp. and Verde

Energy USA Holdings, LLC, dated as of May 5, 2017.

10-Q

2.4

5/8/2017

001-36559

2.5

First Amendment to the Membership Interest and Stock

Purchase Agreement, dated July 1, 2017, by and among Spark

Energy, Inc., CenStar Energy Corp., and Verde Energy USA

Holdings, LLC.

8-K

2.1

7/6/2017

001-36559

2.6#

Agreement to Terminate Earnout Payments, effective January

12, 2018, by and among Spark Energy, Inc., CenStar Energy

Corp., Woden Holdings, LLC (fka Verde Energy USA

Holdings, LLC), Verde Energy USA, Inc., Thomas FitzGerald,

and Anthony Menchaca.

8-K

2.1

1/16/2018

001-36559

2.7#

Asset Purchase Agreement, dated March 7, 2018, by and

between Spark HoldCo, LLC and National Gas & Electric, LLC.

10-K

2.7

3/9/2018

001-36559

2.8#

Asset Purchase Agreement, by and between Spark HoldCo,

LLC, Starion Energy Inc., Starion Energy NY Inc., and Starion

Energy PA Inc., dated October 19, 2018.

8-K

2.1

10/25/2018

001-36559

2.9

First Amendment to Asset Purchase Agreement, by and between

Spark HoldCo, LLC, Starion Energy Inc., Starion Energy NY

Inc., and Starion Energy PA, Inc., effective May 1, 2020.

10-Q

2.9

8/5/2020

001-36559

2.10^

Agreement and Plan of Merger, dated as of December 29, 2023,

by and among Retailco, LLC, NuRetailco LLC and Via

Renewables, Inc.

8-K

2.1

1/2/2024

001-36559

3.1

Composite Amended and Restated Certificate of Incorporation

of Via Renewables, Inc., as amended through March 21, 2023

10-K

3.1

2/29/2024

001-36559

3.2 | Second Amended and Restated Bylaws of Via Renewables, Inc | 8-K | 3.2 | 8/9/2021 | 001-36559

3.3

Certificate of Designations of Rights and Preferences of 8.75%

Series A Fixed-to-Floating Rate Cumulative Redeemable

Perpetual Preferred Stock

8-A

5

3/14/2017

001-36559

4.1 | Description of Securities | 10-Q | 4.1 | 8/1/2024 | 001-36559

10.1#

First Amendment to Credit Agreement, dated June 28, 2024, by

and among Via Renewables, Inc., Spark HoldCo, LLC, and the

other subsidiaries of Via Renewables, Inc. and Spark HoldCo,

LLC party thereto, as co-borrowers, Woodforest National Bank,

as administrative agent, swing bank, swap bank, issuing bank,

joint-lead arranger, sole bookrunner and syndication agent, and

the other financial institutions party thereto.

8-K

10.1

6/28/2024

001-36559

63

| | | | |

10.2

Amended and Restated Subordinated Promissory Note (Note

No. 8), dated June 28, 2024, by and among Via Renewables,

Inc., Spark HoldCo, LLC and Retailco, LLC.

8-K

10.2

6/28/2024

001-36559

10.3

Asset Purchase Agreement by and between Tomorrow Energy

Corp, as Seller, and Spark HoldCo, LLC, as Buyer, dated as of

October 22, 2024

8-K

2.1

10/25/2024

001-36559

10.4*

Amendment No. 3 to the Third Amended and Restated Limited

Liability Company Agreement of Spark Holdco, LLC, dated as

of October 30, 2024, by and between Via Renewables, Inc.,

Spark HoldCo, LLC, and Retailco, LLC.

31.1*

Certification of Chief Executive Officer pursuant to Rule

13a-14(a) under the Securities Exchange Act of 1934.

31.2*

Certification of Chief Financial Officer pursuant to Rule

13a-14(a) under the Securities Exchange Act of 1934.

32** | Certifications pursuant to 18 U.S.C. Section 1350. | | | |

101.INS*

XBRL Instance Document – the instance document does not

appear in the Interactive Data File because its XBRL tags are

embedded within the Inline XBRL

101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | | | |

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase

Document.

101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | | | |

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase

Document.

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase

Document.

104*

Cover Page Interactive Data File (formatted as Inline XBRL and

contained in Exhibit 101.INS)

* Filed herewith

** Furnished herewith

^ The disclosure letters contemplated by this Agreement and Plan of Merger and the Exhibits to this Agreement

have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby agrees to supplementally

furnish to the SEC upon request any omitted disclosure letters or exhibits to the Agreement and Plan of Merger.

# Certain schedules, exhibits and annexes have been omitted in reliance on Item 601 (a)(5) of Regulation S-K, the

registrant agrees to furnish supplementally a copy of any omitted schedule, exhibit or annex to the Commission

upon request

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this

Report to be signed on its behalf by the undersigned, thereunto duly authorized.

64

| | | | |
| | | | |
| Via Renewables, Inc.
| |
| | | | |
October 31, 2024 | | | /s/ Mike Barajas
| | | Mike Barajas

Chief Financial Officer (Principal

Financial Officer and Principal

Accounting Officer)