[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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20-2722022
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer ¨ | Accelerated filer ¨ |
Non-accelerated filer ¨ | Smaller reporting company ý |
BUSINESS.
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Aggregators, Brokers, Consultants - often referred to as “ABC’s” in the retail power industry;
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Affinity Programs - airline miles, credit card points, and participating gift cards;
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Multifamily Housing Programs - incentivizing property management companies based on referrals to their tenants;
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Referrals - reaching out to individuals connected to the community and providing incentives for sign ups; and
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Charitable Programs - enhancing referral programs and offering customers the chance to donate referral fees to local charitable organizations.
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In-house sales staff focused on small to medium sized commercial sales;
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Face-to-face marketing, including presentations, customer meetings, and business development through newly-formed relationships with consumers (a/k/a cold calling);
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Direct sales using independent sales associates;
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Responding to website inquiries from commercial businesses;
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Identifying opportunities in underserved markets (e.g. South Texas and West Texas); and
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Community Involvement - establishing our brand throughout the community by giving back and volunteering our time and assistance.
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RISK FACTORS
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weather conditions;
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seasonality;
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demand for energy commodities and general economic conditions;
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forced or unscheduled plant outages;
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disruption of electricity or gas transmission or transportation infrastructure or other constraints or inefficiencies;
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addition of generating capacity;
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availability of competitively priced alternative energy sources;
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availability and levels of storage and inventory for fuel stocks;
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natural gas, crude oil and refined products, and coal production levels;
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the creditworthiness or bankruptcy or other financial distress of market participants;
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changes in market liquidity;
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natural disasters, wars, embargoes, acts of terrorism and other catastrophic events; and
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federal and state governmental regulation and legislation.
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UNRESOLVED STAFF COMMENTS.
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PROPERTIES.
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LEGAL PROCEEDINGS.
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MINE SAFETY DISCLOSURES.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Plan
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Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
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Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
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Number of Securities Remaining Available for Future Issuances Under Plans (excluding securities reflected in column (a))
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|||||||||
(a)
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(b)
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(c)
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||||||||||
Equity compensation plans approved by security holders (1):
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- | - | 660,000 | |||||||||
Equity compensation plans not approved by security holders (2):
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421,000 | $ | 0.64 | - | ||||||||
Total
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421,000 | - |
(1)
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This plan is the 2012 Stock Option and Stock Award Plan.
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(2)
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From time to time and at the discretion of the Board, we may issue warrants and stock options to our key individuals or officers as performance based compensation.
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SELECTED FINANCIAL DATA.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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Rent Period
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Sq. Ft.
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Monthly Base Rent
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9/1/2013 - 8/31/2014
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6,467
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$10,913
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9/1/2014 – 8/31/2015
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6,467
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$11,182
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9/1/2015 – 8/31/2016
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6,467
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$11,451
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
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CONTROLS AND PROCEDURES.
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OTHER INFORMATION.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
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EXECUTIVE COMPENSATION.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
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PRINCIPAL ACCOUNTING FEES AND SERVICES.
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EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
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Page | |
Report of Independent Registered Public Accounting Firm
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F-1
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Consolidated Balance Sheets as of December 31, 2012 and 2011
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F-2
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Consolidated Statements of Operations for the years ended December 31, 2012 and 2011
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F-3
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Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2012 and 2011
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F-4
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Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011
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F-5
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Notes to Consolidated Financial Statements
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F-6
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SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2012 and 2011
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December 31, 2012
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December 31, 2011
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ASSETS
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Current Assets
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Cash
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$ | 281,269 | $ | 1,751,911 | ||||
Restricted cash
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76,219 | 605 | ||||||
Accounts receivable, net
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1,539,555 | 972 | ||||||
Prepaid and other current assets
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201,235 | 13,075 | ||||||
Total current assets
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2,098,278 | 1,766,563 | ||||||
Property and equipment, net
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215,527 | 2,126 | ||||||
Certificates of deposit – restricted
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517,701 | 500,669 | ||||||
Deferred financing costs, net
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127,772 | 194,444 | ||||||
Total assets
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$ | 2,959,278 | $ | 2,463,802 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current Liabilities
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Accounts payable
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$ | 104,881 | $ | 16,962 | ||||
Accrued wholesale power purchased
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417,085 | - | ||||||
Accrued expenses
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576,823 | 200,000 | ||||||
Total current liabilities
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1,098,789 | 216,962 | ||||||
Commitments
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Stockholders’ Equity
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Preferred stock - $.001 par value, 10,000,000 shares authorized, no
shares issued and outstanding
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- | - | ||||||
Common stock - $.001 par value, 100,000,000 shares authorized,
12,954,863 and 9,547,624 shares issued and outstanding at
December 31, 2012 and December 31, 2011, respectively
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12,955 | 9,548 | ||||||
Subscription receivable
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(52,000 | ) | (52,000 | ) | ||||
Additional paid in capital
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3,844,592 | 2,615,477 | ||||||
Accumulated deficit
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(1,945,058 | ) | (326,185 | ) | ||||
Total stockholders’ equity
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1,860,489 | 2,246,840 | ||||||
Total liabilities and stockholders’ equity
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$ | 2,959,278 | $ | 2,463,802 |
For the Year
Ended
December 31, 2012
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For the Period From Inception to December 31, 2011
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Revenue
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$ | 6,294,545 | $ | - | ||||
Cost of Goods Sold
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Power purchases and balancing/ancillary
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2,677,719 | - | ||||||
Transportation and distribution providers charge
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2,412,114 | - | ||||||
Total cost of goods sold
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5,089,833 | - | ||||||
Gross Profit
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1,204,712 | - | ||||||
General and Administrative
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(2,758,951 | ) | (321,468 | ) | ||||
Operating Loss
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(1,554,239 | ) | (321,468 | ) | ||||
Other Income (Expense)
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Financing costs
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(66,672 | ) | (5,556 | ) | ||||
Interest income
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2,038 | 839 | ||||||
Total other income (expense)
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(64,634 | ) | (4,717 | ) | ||||
Net Loss Before Income Taxes
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(1,618,873 | ) | (326,185 | ) | ||||
Income Taxes
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- | - | ||||||
Net Loss
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$ | (1,618,873 | ) | $ | (326,185 | ) | ||
Basic and diluted loss per share
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$ | (0.15 | ) | $ | (0.06 | ) | ||
Weighted average number of shares
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10,664,436 | 5,650,820 |
Common Stock
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Shares
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Amount
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Subscription
Receivable
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Additional paid in
capital
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Accumulated
Deficit
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Total
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Balance, April 6, 2011
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Issuance of Common Stock for Cash
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9,396,109 | $ | 9,396 | $ | (52,000 | ) | $ | 2,565,104 | - | $ | 2,522,500 | |||||||||||||
Issuance of Common Stock and Warrants for Service
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151,515 | 152 | - | 50,373 | - | 50,525 | ||||||||||||||||||
- | - | - | - | |||||||||||||||||||||
Net Loss
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(326,185 | ) | (326,185 | ) | ||||||||||||||||||||
Balance at December 31, 2011
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9,547,624 | 9,548 | (52,000 | ) | 2,615,477 | (326,185 | ) | 2,246,840 | ||||||||||||||||
Issuance of Common Stock for Services
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275,000 | 275 | - | 249,725 | - | 250,000 | ||||||||||||||||||
Issuance of Common Stock Associated with May Term Sheet for Cash, Net
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310,000 | 310 | - | 277,391 | - | 277,701 | ||||||||||||||||||
Issuance of Common Stock Associated with the October Offering for Cash, Net
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500,000 | 500 | - | 499,500 | - | 500,000 | ||||||||||||||||||
Issuance of Common Stock for payment for availability of credit facility
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1,515,152 | 1,515 | - | 198,485 | - | 200,000 | ||||||||||||||||||
Recapitalization
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807,087 | 807 | - | 4,014 | - | 4,821 | ||||||||||||||||||
Net loss
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- | - | - | - | (1,618,873 | ) | (1,618,873 | ) | ||||||||||||||||
Balance at December 31, 2012
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12,954,863 | $ | 12,955 | $ | (52,000 | ) | $ | 3,844,592 | $ | (1,945,058 | ) | $ | (1,860,489 | ) |
SUMMER ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 2012 and For the Period
From Inception (April 6, 2011) to December 31, 2011
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For Year Ended December 31, 2012
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For the Period From Inception to December 31, 2011
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Cash Flows from Operating Activities
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Net loss
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$ | (1,618,873 | ) | $ | (326,185 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
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Common stock for services
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250,000 | 50,000 | ||||||
Warrants for services
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- | 525 | ||||||
Interest earned
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(2,032 | ) | (669 | ) | ||||
Depreciation of property and equipment
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29,102 | 61 | ||||||
Amortization of deferred financing costs
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66,672 | 5,556 | ||||||
Bad debt expense
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97,297 | - | ||||||
Changes in operating assets and liabilities:
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Accounts receivable
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(1,635,880 | ) | - | |||||
Deferred financing costs
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- | (200,000 | ) | |||||
Prepaid and other current assets
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(188,160 | ) | (14,047 | ) | ||||
Accounts payable
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87,917 | 16,962 | ||||||
Accrued wholesale power purchased
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417,085 | - | ||||||
Accrued expenses
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576,823 | 200,000 | ||||||
Net cash used in operating activities
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(1,920,049 | ) | (267,797 | ) | ||||
Cash Flows from Investing Activities
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Purchase of restricted cash
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(75,614 | ) | (605 | ) | ||||
Certificate of deposit
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(15,000 | ) | (500,000 | ) | ||||
Recapitalization
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564 | - | ||||||
Purchase of property and equipment
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(238,244 | ) | (2,187 | ) | ||||
Net cash used in investing activities
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(328,294 | ) | (502,792 | ) | ||||
Cash Flows from Financing Activity
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Proceeds from issuance of common shares in a private placement, net
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777,701 | 2,522,500 | ||||||
Net cash provided by financing activity
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777,701 | 2,522,500 | ||||||
Net Change in Cash
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(1,470,642 | ) | 1,751,911 | |||||
Cash at Beginning of Period
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1,751,911 | - | ||||||
Cash at End of Period
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$ | 281,269 | $ | 1,751,911 | ||||
Supplemental Disclosure of Cash Flow Information:
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Income taxes paid
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$ | - | $ | - | ||||
Interest paid
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$ | 848 | $ | - | ||||
Non-cash Transactions:
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Common stock issued for relief of availability of credit facility
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$ | 200,000 | $ | - | ||||
Subscription Receivable
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$ | - | $ | 52,000 |
Estimated Lives | |
Computer software
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3 years
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Computer hardware
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3 years
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Furniture and fixtures
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5 years
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Leasehold improvements
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5 years
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Website
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3 years
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Other equipment
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7 years
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December 31, 2012
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Provision (benefit) at statutory rate
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$ | (550,000 | ) | |
Loss incurred through March 27, 2012
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217,000 | |||
Change in valuation allowance
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320,000 | |||
Others
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13,000 | |||
$ | - |
December 31, 2012
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Deferred tax assets:
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||||
Net operating loss carrryforward- Federal
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$ | 332,000 | ||
Allowance for bad debt
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9,000 | |||
Other assets
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14,000 | |||
Total gross deferred tax assets
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355,000 | |||
Valuation allowance
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(320,000 | ) | ||
Net deferred tax assets
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35,000 | |||
Deferred tax liabilities:
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Property and equipment
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(35,000 | ) | ||
Deferred tax liabilities
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(35,000 | ) | ||
Net deferred tax assets
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$ | - |
Warrants
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Weighted Average Exercise Price
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Warrants outstanding, December 31, 2011
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400,000 | $ | 0.60 | |||||
Granted
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426,000 | 1.50 | ||||||
Exercised
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- | - | ||||||
Forfeited
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- | - | ||||||
Warrants outstanding, December 31, 2012
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826,000 | $ | 0.82 |
Risk-free interest rate
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0.90%
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Expected dividend yield
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0.00%
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Expected volatility
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17.00%
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Expected life
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5 years
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Weigted average calculated value of warrants granted
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$0.04
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Rent Period
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Monthly Base Rent
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09/01/2012 – 08/31/2013
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$12,126 |
09/01/2013 – 08/31/2014
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$10,913 |
09/01/2014 – 08/31/2015
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$11,182 |
09/01/2015 – 08/31/2016
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$11,451 |
Lease Period
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Monthly Lease Amount
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12/05/2011 – 09/30/2015
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$99
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Contractual Obligations
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2013
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2014
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2015
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2016
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2017
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Total
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Operating Leases
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$ | 142,000 | $ | 133,000 | $ | 136,000 | $ | 92,000 | $ | 0 | $ | 503,000 |
December 31, 2012
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December 31, 2011
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Computer software
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$ | 9,871 | $ | - | ||||
Computer hardware
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25,083 | 2,187 | ||||||
Furniture and fixtures
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7,678 | - | ||||||
Leasehold improvements
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5,343 | - | ||||||
Website
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194,058 | - | ||||||
Other equipment
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91,730 | - | ||||||
333,763 | 2,187 | |||||||
Less: Accumulated depreciation
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(118,236 | ) | (61 | ) | ||||
Property and equipment, net
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$ | 215,527 | $ | 2,126 |
Exhibit No.
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Description
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2.1
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Agreement and Plan of Contribution, by and among Castwell Precast Corporation, Summer Energy, LLC and the members of Summer Energy, LLC, incorporated by reference to Exhibit 10.1 to our Form 8-K filed on January 19, 2012.
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3.1
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Articles of Incorporation of the Company dated March 25, 2005, incorporated by reference to Exhibit 3.1 to our Registration Statement on Form SB-2 filed on July 16, 2007.
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3.2
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Certificate of Amendment to Articles of Incorporation filed with the Nevada Secretary of State effective March 27, 2012, incorporated by reference to Exhibit 3.1 to our Form 8-K filed on March 30, 2012.
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3.3
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Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.2 to our Form 8-K filed on March 30, 2012.
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10.1
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Form of Master Power Purchase and Sale Agreement dated as of August 9, 2011 by and between Summer Energy, LLC and BP Energy Company, incorporated by reference to Exhibit 10.1 to our Form 8-K filed on March 30, 2012.
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10.2
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Advisory Agreement by and between Summer Energy, LLC and Cambria Capital, LLC dated November 1, 2011, incorporated by reference to Exhibit 10.2 to our Form 8-K filed on March 30, 2012.
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10.3
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Warrant to Purchase Units of Membership Interest dated January 17, 2012, incorporated by reference to Exhibit 10.3 to our Form 8-K filed on March 30, 2012.
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10.4
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Form of Agreement to Assist with Credit Facility dated November 30, 2011, incorporated by reference to Exhibit 10.4 to our Form 8-K filed on March 30, 2012.
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10.5
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Agreement to Assist with Credit Facility – Rod Danielson, dated December 16, 2011, incorporated by reference to Exhibit 10.5 to our Form 8-K filed on March 30, 2012.
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10.6
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2012 Stock Option and Stock Award Plan, incorporated by reference to Exhibit 10.6 to our Form 8-K filed on March 30, 2012.*
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10.7
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Form of Lock Up Agreement, incorporated by reference to Exhibit 10.7 to our Form 8-K filed on March 30, 2012.
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10.8
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Executive Employment Agreement, effective January 21, 2013, by and between Summer Energy Holdings, Inc. and Neil Leibman, incorporated by reference to Exhibit 10.1 to our Form 8-K filed on January 23, 2013.
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10.9
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Executive Employment Agreement, effective February 11, 2013, by and between Summer Energy Holdings, Inc. and Jaleea P. George, incorporated by reference to Exhibit 10.1 to our Form 8-K filed on February 14, 2013.
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10.10
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Executive Employment Agreement, effective February 11, 2013, by and between Summer Energy Holdings, Inc. and Roderick L. Danielson, incorporated by reference to Exhibit 10.2 to our Form 8-K filed on February 14, 2013.
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10.11
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Executive Employment Agreement, effective February 11, 2013, by and between Summer Energy Holdings, Inc. and Angela Hanley, incorporated by reference to Exhibit 10.3 to our Form 8-K filed on February 14, 2013.
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10.12
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Form of Indemnification Agreement for Officers and Directors, incorporated by reference to Exhibit 10.1 to our Form S-8 filed on December 6, 2012
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10.13
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Office Lease Agreement, as amended, originally dated August 1, 2006.
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14.1
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Code of Business Conduct and Ethics, incorporated by reference to Exhibit 14.1 to our Form 10-Q filed on May 15, 2012.
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16.1
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Letter regarding change in certifying accountants, dated April 18, 2012, incorporated by reference to Exhibit 16.1 to our Form 8-K/A filed on April 20, 2012.
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21.1
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Schedule of Subsidiaries.
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23.1
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Consent of LBB Associates Ltd., LLP, Independent Registered Public Accounting Firm.
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24
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Power of Attorney (included on the Signature Page).
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31.1
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Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).
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31.2
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Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).
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32.1
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Certification of CEO and CFO pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
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99.1
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Audit Committee Charter, incorporated by reference to Exhibit 99.1 to our Form 10-Q filed on May 15, 2013.
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99.2
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Compensation Committee Charter, incorporated by reference to Exhibit 99.2 to our Form 10-Q filed on May 15, 2013.
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99.3
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Nominating and Corporate Governance Committee Charter.
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Signature
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Title
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Date
|
||
/s/ Neil M. Leibman
Neil M. Leibman
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President and Chief Executive Officer
(Principal Executive Officer and Director)
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March 27, 2013
|
||
/s/ Jaleea P. George
Jaleea P. George
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Secretary, Treasurer, Chief Financial Officer
(Principal Financial Officer and Accounting Officer)
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March 27, 2013
|
||
/s/ Stuart C. Gaylor
Stuart C. Gaylor
|
Director
(Non-executive Chairman of the Board)
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March 27, 2013
|
||
/s/ Tom D. O’Leary
Tom D. O’Leary
|
Director
|
March 27, 2013
|
||
/s/ Jefferey Mace Meeks
Jefferey Mace Meeks
|
Director
|
March 27, 2013
|
||
/s/ Michael D. Vanderhoof
Michael D. Vanderhoof
|
Director
|
March 27, 2013
|
||
/s/ James P. Stapleton
James P. Stapleton
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Director
|
March 27, 2013
|
Entity
|
State of Incorporation
|
Percentage of Ownership
|
Summer Energy, LLC
|
Texas
|
100%
|
Summer EM Marketing, LLC
|
Texas
|
100%
|
Castwell Precast, Inc.
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Utah
|
100%
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1.
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I have reviewed this Annual Report on Form 10-K of Summer Energy Holdings, Inc.;
|
2.
|
Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;
|
4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
|
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
|
|
(d)
|
disclosed in this Annual Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Summer Energy Holdings, Inc.;
|
2.
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Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
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(d)
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disclosed in this Annual Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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§
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a candidate must demonstrate integrity, accountability, informed judgment, financial literacy, creativity and vision;
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§
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a candidate must be prepared to represent the best interests of all of the Company’s shareholders, not just those of one particular constituency;
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§
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a candidate must have a record of professional accomplishment in his or her chosen field; and
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§
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a candidate must be prepared and able to participate fully in Board activities, including membership on Board committees.
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