ASPIRITY HOLDINGS LLC - FORM 10-K/A

Attached files

file	filename
EX-32.1 - ASPIRITY HOLDINGS LLC	ex32-1.htm
EX-31.2 - ASPIRITY HOLDINGS LLC	ex31-2.htm
EX-31.1 - ASPIRITY HOLDINGS LLC	ex31-1.htm
EX-23.1 - ASPIRITY HOLDINGS LLC	ex23-1.htm

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K/A

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

[ ]	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: 333-203994

Aspirity Holdings, LLC

(Exact name of registrant as specified in its charter)

Minnesota		27-1658449
(State of organization)		(IRS Employer Identification Number)

701 Xenia Avenue, Suite 475

Minneapolis, Minnesota 55416

(Address of principal executive offices, zip code)

(763) 432-1500

(Registrant’s telephone number, including area code)

Securities registered under Sections 12(b) or 12(g) of the Act		Name of each exchange on which registered
None		None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

$75,000,000

3 and 6 Month and 1, 2, 3, 4, 5 and 10 Year Renewable Unsecured Subordinated Notes

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 [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [x]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

TABLE OF CONTENTS

Introduction	3

Part I	3

Item 1A – Risk Factors	3

Part II	4

Item 6 – Selected Consolidated Financial Data	4
Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation	5
Liquidity, Capital Resources, and Cash Flow	5
Item 8 – Financial Statements and Supplementary Data	6
Report of Independent Registered Public Accounting Firm	6
Consolidated Balance Sheets	7
Consolidated Statements of Comprehensive Income	8
Consolidated Statements of Cash Flows	9
Consolidated Statements of Changes in Members’ Equity (Deficit)	11
Notes to Consolidated Financial Statements	12

Signatures	61

Introduction

This Form 10-K/A is being filed for the purpose of restating our balance sheet as of December 31, 2015 with respect to three line items within the members’ equity section - common equity, total members’ equity, and non-controlling interest. Total equity remains unchanged after the reclassification. These changes are also reflected in Items 6, 7 and 8.

In addition, we are revising Item 1A to add an additional risk factor and Item 9A to amend our disclosures and conclusions regarding our disclosure controls and procedures and our internal control over financial reporting.

Part I

Item 1A – Risk Factors

We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective which could adversely affect our ability to accurately report our financial results.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our internal controls. Because of deficiencies related to financial reporting of and the accounting for non-routine or complex transactions, we concluded that as of December 31, 2015, our disclosure controls and procedures were not effective. Until we have been able to test the operating effectiveness of our remediated internal controls and ensure the effectiveness of our disclosure controls and procedures, any material weaknesses may materially adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner. In addition, although we continually review and evaluate internal control systems to allow management to report on the sufficiency of our internal controls, we cannot assure you that we will not discover additional weaknesses in our internal control over financial reporting. Any such additional weakness or failure to remediate the existing weakness could materially adversely affect our ability to comply with applicable financial reporting requirements. If that were to occur, purchasers of our Notes could be using inaccurate financial information with which to make their investment decision.

Part II

Item 6 – Selected Consolidated Financial Data

Total members’ equity in the table below has been restated. See also Note 28 to the consolidated financial statements.

Dollars in thousands unless otherwise indicated	Years ended December 31
	2015			2014
Statements of Operations Data
Net revenue	$	48,124		$	49,841
Total operating expenses		52,489			43,402
Operating income (loss)		(4,365	)		6,440
Net other income (expense)		(444	)		(2,661	)
Income (loss) before income taxes		(4,809	)		3,779
Provision for taxes		(47	)		-
Net income (loss)		(4,762	)		3,779
Preferred distributions		(549	)		(549	)
Noncontrolling interests		(468	)		-
Net income attributable to common	$	(4,843	)	$	3,230
Ratio of earnings to fixed charges (1)		-0.21	x		2.47	x

Balance Sheet Data
Cash and trading deposits	$	10,379		$	23,497
Total assets		28,999			31,770
Total debt		27,630			19,288
Total liabilities		37,050			29,072
Total members’ equity (restated)		(4,755	)		2,698

Fixed charges include interest expense, one-third of operating lease rental expense as reported in the footnotes to our financial statements, and amortization of deferred financing costs. We have included one-third of the operating lease rental expense because that is the portion the Company estimates to be the interest component attributable to such rent expense, with the remaining two-thirds considered to be depreciation.

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation

Liquidity, Capital Resources, and Cash Flow

The common equity, total members’ equity, and non-controlling interest amounts as of December 31, 2015 in the following table have been restated. See also Note 28 to the consolidated financial statements.

Dollars in thousands; may not add due to rounding	At December 31,
	2015 Restated						2014						Increase (decrease)
	Dollars			Percent of total assets			Dollars			Percent of total assets			Dollars			Percent
Liquidity
Unrestricted cash	$	2,331			8.0	%	$	2,397			7.5	%	$	(66	)		-2.7	%
Cash in trading accounts		8,047			27.8	%		21,100			66.4	%		(13,052	)		-61.9	%
Cash collateral		246			0.8	%		-			0.0	%		246			na
Marketable securities		-			0.0	%		312			1.0	%		(312	)		-100.0	%
Trade accounts receivable		5,888			20.3	%		2,394			7.5	%		3,494			145.9	%
Total liquid assets		16,513			56.9	%		26,203			82.5	%		(9,690	)		-37.0	%
Total assets	$	28,999			100.0	%	$	31,770			100.0	%		(2,771	)		-8.7	%

Capital Resources
Current debt	$	13,023			44.9	%	$	8,652			27.2	%	$	4,371			50.5	%
Long term debt		14,607			50.4	%		10,636			33.5	%		3,971			37.3	%
Total debt		27,630			95.3	%		19,288			60.7	%		8,342			43.2	%
Preferred equity		2,745			9.5	%		2,745			8.6	%		-			0.0	%
Common equity (restated)		(7,500	)		-25.9	%		(194	)		-0.6	%		(7,306	)		3773.3	%
AOCI		-			0.0	%		147			0.5	%		(147	)		-100.0	%
Total members’ equity (restated)		(4,755	)		-16.4	%		2,698			8.5	%		(7,453	)		-276.2	%
Non-controlling interest (restated)		(3,296	)		-11.4	%		-			0.0	%		(3,296	)		na
Total equity		(8,051	)		-27.8	%		2,698			8.5	%		(10,749	)		-398.4	%
Total capitalization	$	19,579			67.5	%	$	21,986			69.2	%	$	(2,407	)		-10.9	%

There were no other changes to Item 7.

Item 8 – Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Members, Audit Committee, and Board of Directors

Aspirity Holdings, LLC

Minneapolis, Minnesota

We have audited the accompanying consolidated balance sheets of Aspirity Holdings, LLC as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in members’ equity (deficit) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of its internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Aspirity Holdings, LLC as of December 31, 2015 and 2014 and the results of their operations and cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 28 to the consolidated financial statements, the Company’s Common equity, Total members’ equity and Non-controlling interest as of December 31, 2015, previously reported as $(1,646,963), $1,098,037 and $(9,807,776), respectively, should have been $(7,499,580), ($4,754,580) and $(3,955,159). This discovery was made subsequent to the issuance of the consolidated financial statements. The consolidated financial statements have been restated to reflect these corrections.

/S/ BAKER TILLY VIRCHOW KRAUSE, LLP

Minneapolis, Minnesota

April 15, 2016, except for Notes 27 and 28 as to which the date is May 23, 2016

Aspirity Holdings, LLC and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2015 and 2014

	2015			2014
	As Restated
Assets
Current assets
Unrestricted cash	$	2,331,401		$	2,397,300
Cash in trading accounts		8,047,331			21,099,652
Cash collateral		246,000			-
Marketable securities		-			311,586
Trade accounts receivable, net		5,888,184			2,394,246
Inventory, average costs basis		53,917			-
Costs and estimated earnings in excess of billings on uncompleted contracts		7,503			-
Notes receivable, net of deferred gain		795,995			-
Prepaid expenses and other current assets		771,941			416,419
Total current assets		18,142,272			26,619,203
Property, equipment and furniture, net		1,348,311			762,529
Other assets
Intangible assets, net		852,669			269,149
Deferred financing costs, net		314,025			241,744
Restricted cash		1,319,371			1,319,371
Real estate held for development		2,714,297			953,462
Notes receivable, net of deferred gain		2,586,616			-
Investment in convertible notes		502,110			1,604,879
Goodwill		1,148,117			-
Deferred tax asset		47,000			-
Other assets		24,466			-
Total assets	$	28,999,254		$	31,770,337

Liabilities and Members’ Equity (deficit)
Current liabilities
Current portions of debt
Revolver and line of credit	$	1,688,405		$	1,105,259
Senior notes		1,214,762			312,068
Renewable unsecured subordinated notes		10,120,175			7,234,559
Accounts payable - trade		4,376,984			1,544,103
Accrued expenses		2,105,339			681,995
Accrued compensation		723,355			3,601,282
Accrued interest		1,503,819			849,913
Billings in excess of costs and estimated earnings on uncompleted contracts		710,827			-
Obligations under settlement agreement		-			582,565
Total current liabilities		22,443,666			15,911,744
Long-term liabilities
Senior notes		242,232			217,451
Renewable unsecured subordinated notes		14,364,323			10,418,569
Obligations under settlement agreement		-			2,524,448
Total long term liabilities		14,606,555			13,160,468
Total liabilities		37,050,221			29,072,212
Commitments and contingencies
Members’ equity (deficit)
Series A preferred equity		2,745,000			2,745,000
Common equity		(7,499,580	)		(193,624	)
Accumulated other comprehensive income		-			146,749
Total members’ equity (deficit)		(4,754,580	)		2,698,125
Non-controlling interest		(3,955,159	)		-
Accumulated other comprehensive income attributed to non-controlling interest		658,772			-
Total equity (deficit)		(8,050,967	)		2,698,125
Total liabilities and equity (deficit)	$	28,999,254		$	31,770,337

See notes to consolidated financial statements.

Aspirity Holdings, LLC and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2015 and 2014

	2015			2014
Revenue
Wholesale trading, net	$	14,293,475		$	38,611,944
Retail energy services		30,482,812			11,229,476
Real estate sales		351,725			-
Management services		710,000			-
Construction services		2,285,998			-
Total sales and services revenue		33,830,535			11,229,476
Total revenue		48,124,010			49,841,420
Costs of sales and services
Cost of retail electricity sold		26,663,003			11,440,672
Cost of real estate sold		319,261			-
Cost of construction services		1,703,956			-
Total costs of sales and services		28,686,220			11,440,672
Gross profit on sales and services		5,144,315			(211,196	)
Operating expenses
Sales and marketing		1,353,221			324,948
Compensation and benefits		13,467,931			21,722,319
Professional fees		2,463,360			2,487,056
Other general and administrative		5,226,002			6,093,843
Trading tools and subscriptions		1,292,662			1,332,804
Total operating expenses		23,803,176			31,960,970
Operating income (loss)		(4,365,386	)		6,439,778
Other income (expense)
Interest expense		(3,568,707	)		(2,293,376	)
Interest income		829,222			142,915
Gain on sale of subsidiary		1,343,156			-
Impairment of convertible notes		(1,250,000	)		-
Gain (loss) on foreign currency exchange		356,288			(720,952	)
Gain (loss) on sale of marketable securities		(129,743	)		65,655
Other income		1,976,127			145,164
Other income (expense), net		(443,657	)		(2,660,594	)
Income (loss) before income taxes		(4,809,043	)		3,779,184
Income tax benefit		(47,000	)		-
Net income (loss)		(4,762,043	)		3,779,184
Net income (loss) attributable to non-controlling interest		(468,484	)		-
Net income (loss) attributable to Company		(4,293,559	)		3,779,184
Preferred distributions		(549,072	)		(549,072	)
Net income (loss) attributable to common		(4,842,631	)		3,230,112
Other comprehensive income (loss) attributable to non-controlling interest
Foreign currency translation adjustment		(340,269	)		-
Change in fair value of cash flow hedges		863,408			-
Unrealized gain (loss) on marketable securities		(11,116	)		-
Comprehensive income (loss) attributable to non-controlling interest		43,539			-
Other comprehensive income (loss) attributable to common
Foreign currency translation adjustment		-			661,033
Change in fair value of cash flow hedges		-			(1,220,022	)
Unrealized gain (loss) on marketable securities		-			5,349
Comprehensive income (loss) attributable to common		(4,842,631	)		2,676,472
Comprehensive income (loss) attributable to the Company	$	(4,799,092	)	$	2,676,472

See notes to consolidated financial statements.

Aspirity Holdings, LLC and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2015 and 2014

	2015			2014
Cash flows from operating activities
Net (loss) income	$	(4,762,043	)	$	3,779,184
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		696,395			869,631
Loss (gain) on sale of marketable securities		129,743			(65,655	)
Gain on sale of subsidiary		(1,343,156	)		-
Loss on settlement agreement		-			3,607,013
Obligations under settlement agreement		(194,188	)		(500,000	)
Impairment of convertible notes		1,250,000			-
Deferred tax asset		(47,000	)		-
(Increase) decrease in:
Trading accounts		7,909,586			(10,528,239	)
Collateral deposits		(246,000	)		-
Accounts receivable		(1,796,986	)		(1,079,036	)
Inventories		(53,917	)		-
Costs and estimated earnings in excess of billings		144,148			-
Prepaid expenses and other current assets		(360,188	)		(183,638	)
Increase (decrease) in:
Accounts payable - trade		1,377,268			508,459
Accrued expenses		1,414,254			(145,870	)
Accrued compensation		(3,614,045	)		3,301,843
Accrued interest		651,828			490,155
Billings in excess of costs and estimated earnings		(66,518	)		-
Net cash provided by operating activities		1,089,181			53,847

Cash flows from investing activities
Purchase of property, equipment, and furniture		(477,755	)		(202,759	)
Purchases of marketable securities		(5,110,517	)		(1,214,004	)
Proceeds from sale of marketable securities		5,292,360			1,229,426
Noble Conservation Solutions, Inc. net of cash acquired		68,494			-
Discount Energy Group, LLC net of cash acquired		-			(680,017	)
Purchase of convertible notes		-			(1,604,879	)
Investment in convertible notes		(147,231	)		-
Proceeds from sale of real estate held for development		130,965			-
Expenditures on real estate held for development		(1,891,800	)		(184,529	)
Repayment of note receivable		345,105			140,964
Advance of note receivable		(747,992	)
Advance of restricted cash		-			(999,183	)
Net cash used in investing activities		(2,538,371	)		(3,514,981	)

Cash flows from financing activities
Deferred financing costs		(300,792	)		(35,000	)
Proceeds from line of credit		-			700,000
Payments on line of credit		-			(700,000	)
Proceeds (payments) on senior line of credit		862,152			(203,433	)
Proceeds from revolver		269,543			1,850,000
Payments on revolver		-			(744,741	)
Issuances of renewable unsecured subordinated notes		10,213,969			9,308,708
Redemption of renewable unsecured subordinated notes		(3,374,420	)		(1,640,406	)
Preferred distributions		(549,072	)		(549,072	)
Common distributions		(5,950,000	)		(4,726,730	)
Payment of obligations under non-competition agreement		-			(250,000	)
Net cash provided by financing activities		1,171,380			3,009,326
Net decrease in cash		(277,810	)		(451,808	)
Effect of exchange rate changes on cash		211,911			(341,387	)
Unrestricted cash
Beginning of year		2,397,300			3,190,495
End of year	$	2,331,401		$	2,397,300

See notes to consolidated financial statements.

Aspirity Holdings, LLC and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

For the Years Ended December, 31 2015 and 2014

	2015			2014
	As Restated
Non-cash operating activities:
Effective portion of cash flow hedges	$	-		$	(863,408	)
Note receivable from sale of subsidiary, gross	$	12,896,876		$	-
Less deferred gain on sale		(10,260,568	)		-
Note receivable from sale of subsidiary, net	$	2,636,308		$	-

Non-cash investing activities:
Acquisition of land for development via foreclosure on mortgage loan	$	-		$	353,504
Acquisition of land for development via assignment and assumption agreement	$	1,083,675		$	304,952
Unrealized gain on marketable securities	$	-		$	11,116

Non-cash financing activities:
Non-controlling interest	$	(3,486,675	)	$	-
Accumulated other comprehensive income attributed to non-controlling interest		658,772			-
Non-controlling interest due to distribution and reconsolidation of VIE	$	(2,827,903	)	$	-

Supplemental disclosures of cash flow information:
Cash payments for interest	$	2,914,801		$	1,793,221
Capitalized interest related to real estate held for development	$	43,958		$	-

See notes to consolidated financial statements.

Aspirity Holdings, LLC and Subsidiaries

Consolidated Statements of Changes in Members’ Equity (Deficit)

For the Years ended December 31, 2015 and 2014

	Series A Preferred Equity		Common Equity (2015 Restated)			Accumulated Other Comprehensive Income			Total Members’ Equity (2015 Restated)			Non-Controlling Interest (2015 Restated)			Accumulated Other Comprehensive Income Attributed to Non-Controlling Interest		Total Equity
Balance - December 31, 2013	$	2,745,000	$	1,302,994		$	700,389		$	4,748,383		$	-		$	-	$	4,748,383
Net income		-		3,779,184			-			3,779,184			-			-		3,779,184
Other comprehensive income		-		-			(553,640	)		(553,640	)		-			-		(553,640	)
Preferred distributions		-		(549,072	)		-			(549,072	)		-			-		(549,072	)
Common distributions		-		(4,726,730	)		-			(4,726,730	)		-			-		(4,726,730	)
Balance - December 31, 2014	$	2,745,000	$	(193,624	)	$	146,749		$	2,698,125		$	-		$	-	$	2,698,125
Net income (loss)		-		(4,293,559	)		-			(4,293,559	)		(468,484	)		-		(4,762,043	)
Other comprehensive loss		-		-			512,023			512,023			-			-		512,023
Preferred distributions		-		(549,072	)		-			(549,072	)		-			-		(549,072	)
Common distributions		-		(5,950,000	)		-			(5,950,000	)		-			-		(5,950,000	)
Non-controlling interest due to distribution and reconsolidation of VIE as restated		-		3,486,675			(658,772	)		2,827,903			(3,486,675	)		658,772		-
Balance - December 31, 2015 as restated	$	2,745,000	$	(7,499,580	)	$	-		$	(4,754,580	)	$	(3,955,159	)	$	658,772	$	(8,050,967	)

See notes to consolidated financial statements.

Aspirity Holdings, LLC and Subsidiaries

Notes to Consolidated Financial Statements

1. Organization and Description of Business

Organization

Aspirity Holdings LLC (“Aspirity” or the “Company”), known as Twin Cities Power Holdings, LLC or “TCPH” prior to July 14, 2015, is a Minnesota limited liability company formed on December 30, 2009, but had no assets or operations before December 31, 2011. On November 14, 2011, TCPH entered into an Agreement and Plan of Reorganization (the “Reorganization”) with its then current members and Twin Cities Power, LLC (“TCP”), Cygnus Partners, LLC (“CP”), and Twin Cities Energy, LLC (“TCE”) which were affiliated through common ownership. Effective December 31, 2011, following receipt of approval from the Federal Energy Regulatory Commission (“FERC”), the members of TCP, CP, and TCE each contributed all of their ownership interests in these entities to TCPH in exchange for ownership interests in TCPH. Consequently, after the Reorganization, which made TCPH a holding company and the sole member of each of TCP, CP, and TCE, the financial statements are presented on a consolidated basis. The Reorganization was accounted for as a transaction among entities under common control. TCE and its wholly-owned subsidiary, Twin Cities Power – Canada, Ltd. (“TCPC”), became inactive in the third quarter of 2012.

In 2013 and 2014, the Company formed additional first- and second-tier subsidiaries. First-tier subsidiaries included Retail Energy Holdings, LLC (“REH”), formed on October 25, 2013 in anticipation of the acquisition of Discount Energy Group, LLC or “DEG”, Cyclone Partners LLC (“Cyclone”), formed on October 23, 2013 to take advantage of certain investment opportunities present in the residential real estate market, and Apollo Energy Services, LLC (“Apollo”), formed on October 27, 2014 for the purpose of providing centralized services to the Company’s various other subsidiaries. Substantially all of the management rights and certain of the direct employees of TCPH were transferred to Apollo as of January 1, 2015.

With respect to second-tier subsidiaries, as of March 31, 2015, TCP had three active subsidiaries - Summit Energy, LLC (“SUM”), Chesapeake Trading Group, LLC (“CTG”), and Minotaur Energy Futures, LLC (“MEF”, deactivated in the second quarter of 2015); Cygnus had one - Cygnus Energy Futures, LLC (“CEF”); and REH had three - Town Square Energy, LLC (“TSE”), Town Square Energy East, LLC (“TSEE”, formerly DEG), and Town Square Energy Canada, Ltd. (“TSEC”). Effective April 30, 2015, TCP distributed the ownership interests of CTG to TCPH and it became a first tier subsidiary of the Company.

Operations Prior to the Restructuring and Distribution

Prior to the Restructuring and Distribution, the Company had three business segments used to measure its activity – wholesale trading, retail energy services, and diversified investments. Specifically, it:

●	Traded financial contracts in wholesale electricity markets managed by Independent System Operators or Regional Transmission Organizations (collectively, “ISOs”), including those managed by the Midcontinent Independent System Operator (“MISO“), the PJM Interconnection (“PJM“), ISO New England (“ISO-NE“), the New York Independent System Operator (“NYISO“), and the Electric Reliability Council of Texas (“ERCOT“);

●	Traded electricity and other energy-related derivative contracts on exchanges regulated the Commodity Futures Trading Commission (“CFTC“) and operated by the Intercontinental Exchange® (“ICE“), the Natural Gas Exchange Inc. (“NGX“), and the CME Group (“CME“);

●	Provided electricity supply services to retail customers in 8 states that permit retail choice (Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, Ohio, Pennsylvania, and Rhode Island); and

●	Was engaged in certain asset management activities, including real estate development and investments in privately held businesses.

Effective June 1, 2015 the Company entered into a 12-month agreement with Ultra Green to provide CEO services (the “UG Services Contract”).

The Restructuring

Since mid-2014, the Board of Directors has been considering ways to better position the Company to access capital markets, in particular that for public equity. Ultimately, the Board concluded that the Company’s regulatory exposure and earnings volatility, particularly that related to the wholesale trading businesses, needed to be substantially reduced or eliminated in order for such efforts to be successful on the desired scale.

On May 27, 2015, the Board approved a plan to restructure the business via the sale of TCP, spinning out the remaining legacy businesses as defined below, and recasting the Company solely as a retail energy and financial services business (the “Restructuring”). Overall, the Restructuring incorporated several major steps.

New first- and second-tier subsidiaries were created to facilitate the process. The new first-tier subsidiaries consisted of Krieger Enterprises, LLC (“Enterprises”), Aspirity Energy LLC (“Aspirity Energy”), and Aspirity Financial LLC (“Aspirity Financial”). Enterprises was formed to accept the contribution of the Legacy Businesses as defined below. The new second-tier entities, subsidiaries of Aspirity Energy, were formed to conduct business in the various areas of the U.S. that benefit from active wholesale and restructured retail electricity markets - Aspirity Energy Northeast LLC (“AENE”), Aspirity Energy Mid-States LLC (“AEMS”), and Aspirity Energy South LLC (“AES”). Aspirity Financial was formed to provide energy-related financial services to companies and households.

On June 1, 2015, pursuant to an Equity Interest Purchase Agreement (the “Purchase Agreement”), the Company sold 100% of the outstanding equity interests of TCP and SUM to Angell Energy, LLC, a Texas limited liability company (“Angell”), for a purchase price of $20,741,729, paid with $500,000 cash and a secured promissory note of $20,240,729 bearing interest at an annual rate of 6.00% and payable in 12 quarterly installments of $1,855,670 each with a final maturity of June 1, 2018 (the “Original Angell Note”). Also at such closing, the Company and Angell entered into a sublease for the Lakeville office of TCP and Apollo and Angell entered into two agreements - a 6-month contract to provide certain management, operations, and administrative services and a 24-month software license, subject to renewal for successive one year periods (the “Angell Services Contracts”). The Company also assumed the FERC settlement of $2,912,825.

After closing, Angell decided that it no longer desired to sublease the Lakeville office of TCP nor employ the associated personnel. Angell offered the Company the opportunity to cancel the sublease and to re-employ such personnel in exchange for a reduction of the purchase price. Consequently, effective September 2, 2015, an amendment to the Purchase Agreement was executed, reducing the purchase price to $15,000,000. The Original Angell Note was also amended and restated and the principal balance was reduced to $15,024,573, the interest rate remained the same, the quarterly payment was reduced to $1,063,215, and the final maturity date was extended to June 1, 2019 (the “Amended Angell Note”). On November 5, 2015 the services agreement was terminated and on November 5, 2015, Angel purchased a perpetual software license to replace the 24 month agreement.

Effective July 1, 2015, the Company completed an internal reorganization that effected the separation of the Company’s wholesale energy trading, real estate investments, investments in private companies, legacy retail energy business, and certain other assets and obligations (collectively, the “Legacy Businesses”) from its new Aspirity subsidiaries. Specifically, the internal reorganization incorporated the following actions:

●	Enterprises received the following from the Company:

	●	100% of the outstanding equity interests of all active subsidiaries, including Apollo, CTG, Cygnus, REH, and Cyclone;

	●	100% of the outstanding equity interests of all inactive subsidiaries, including: Athena Energy Futures LLC; Minotaur Energy Futures LLC; Twin Cities Energy LLC and its subsidiary Twin Cities Power-Canada, Ltd.; TC Energy Trading, LLC; Twin Cities Power Services, LLC; and Vision Consulting, LLC;

	●	Certain other assets owned directly by the Company, including the Amended Angell Note, the Series C Notes of Ultra Green, investments in certain real estate projects, and the restricted cash pledged to a Canadian court in connection with the ex-employee litigation; and

	●	The UG and Angell Services Contracts.

●	Enterprises assumed certain current liabilities and obligations owed directly by the Company such as leases for office space and equipment; and

●	Enterprises borrowed an aggregate principal amount of $22,206,113 with a weighted average interest rate of 14.08% and a maturity date of December 30, 2019 from Aspirity Financial (the “Term Loan”). Although initially an intercompany relationship and eliminated in consolidation, the loan agreement between the parties is constructed on an arm’s length basis, contains customary protective provisions for the lender, including certain guarantees, collateral, and covenants, and ensures that the cash flows generated by the Legacy Businesses continue to be used to pay the interest and principal on the Renewable Unsecured Subordinated Notes (the “Notes”) outstanding as of June 30, 2015 (the “Term Loan Notes”).

Effective November 1, 2015, the last major step in the Restructuring occurred - the spin-off or “Distribution” of 100% of the equity interests of Enterprises to the Company’s common equity owners, thus completing the legal separation of the Legacy Businesses from the Aspirity companies. Concurrently with the Distribution, executive management changed and new common equity owners were added pending FERC approval of the change in control. Such approval was obtained as of March 18, 2016.

After the Restructuring and Distribution

After the Distribution, the Company has start-up operations in two business segments - financial services and retail energy.

Further, while the Company no longer has an ownership interest in Enterprises and its subsidiaries after the Distribution Date, an assessment of the relationship between the entities as of December 31, 2015 with respect to ASC 810 Consolidation (“ASC 810”) guidance was performed. Pursuant to such assessment, it was concluded that Aspirity should consolidate Enterprises as a VIE as of December 31, 2015. ASC 810 also requires the Company to reevaluate the status of Enterprises as a VIE on a regular basis.

Note that while the Company includes the assets, liabilities, equity, and results of operations of Enterprises in its consolidated financial statements, the Company does not have rights to those assets or responsibility for such claims on assets other than pursuant to its rights under the Term Loan.

Finally, in the future, the Company’s reports of its financial condition and results of operations will be significantly different from those of the past. For example, on a consolidated basis, wholesale trading activities accounted for 29.7% and 77.5% of total revenues of $48,124,010 and $49,841,420 for the years ended December 31, 2015 and 2014, respectively. The Company exited this business effective with the Distribution and has no plans to engage in such activities in the future. With respect to retail energy, while Aspirity Energy has commenced operations, it has yet to record significant results and the Company’s historical financial statements reflect the results of operations of REH and its subsidiaries which it no longer owns or operates. Finally, the Company no longer intends to pursue any diversified investment activity.

Liquidity and Financial Condition

The Company and Enterprises on a consolidated basis reported a net loss of $4,762,000 for the year ended December 31, 2015 and had unrestricted cash, other liquid assets (deposits in trading accounts, cash collateral, and trade receivables), negative working capital and deficit equity of $2,331,000, $14,182,000, $4,301,000, and $8,051,000, respectively, as of the same date. See “Note 3 – Summary Consolidating Financial Data”.

Aspirity Energy and Aspirity Financial are start-up companies in the retail energy and financial services industries, respectively, and are not expected to have significant revenue-generating operations until the middle of 2016 at the earliest. Prior to that, the Company will rely on the timely payment of the Term Loan to repay Term Loan Notes as they are redeemed and on its ability to sell Notes in order to fund start-up operations. Enterprises’ ability to make timely payments on the Term Loan depends in part on the operations of its Legacy Businesses which were not profitable in 2015. In the event amounts owed to us are paid late or not paid, our ability to fund operations, sell new Notes, and repay existing Notes will be negatively impacted. See “Note 20 – Debt” and “Note 27 – Subsequent Events”.

While the Company believes that payments from Enterprises on the Term Loan, anticipated cash generated from operating activities, availability of trade credit with respect to power purchases, and anticipated proceeds from our Notes Offering will be sufficient to meet operating cash requirements and obligations under the Notes and Term Loan Notes through at least December 31, 2016, there can be no assurance that this will prove to be the case. Consequently, the Company regularly evaluates other sources of debt financing and is also considering seeking additional equity capital to meet its funding needs. However, there can be no assurance that these efforts will prove to be successful.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”).

In determining whether we have a controlling interest in an affiliate and the requirement to consolidate the accounts of an entity, management considers factors such as our ownership interest, our authority to make decisions, contractual and substantive participating rights of owners, as well as whether the entity is a variable interest entity or “VIE”.

A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of the entity’s expected residual returns. Variable interests are contractual, ownership, or other pecuniary interests that change with changes in the fair value of the entity’s net assets. A party is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides the party with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in facts and circumstances.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries as well as Enterprises and its subsidiaries. All significant consolidated transactions and balances have been eliminated in consolidation.

Variable Interest Entities

The Company follows ASC 810-10-15 guidance with respect to accounting for variable interest entities (each, a “VIE”). These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of its expected residual returns and are contractual, ownership, or pecuniary in nature and that change with changes in the fair value of the entity’s net assets. A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides it with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in facts and circumstances.

Krieger Enterprises

At December 31, 2015, an assessment of the relationship between the Company and Enterprises was performed as a result of the Restructuring. Due to related party considerations, delay in the transfer of governance rights, and the nature and size of the Term Loan between the two parties that could result in losses, the Company may hold a controlling financial interest in Enterprises, and consequently should consolidate it as a VIE as of December 31, 2015. The relationship is subject to ongoing reconsideration based on changes in facts and circumstances

Ultra Green Packaging

At December 31, 2015, an assessment of the relationship between Enterprises and Ultra Green Packaging, Inc. (“UG”) was performed as a result of the investment in UG’s Series C Convertible Promissory Notes (the “Series C Notes”), entry into a services contract, and the purchase of certain mortgage notes receivable.

During 2014, Enterprises invested $1,500,000 in the Series C Notes and also entered into an agreement to provide executive services to UG. The term of the contract is for twelve months and either party can terminate the agreement upon thirty days’ written notice. During 2015, Enterprises loaned UG $325,000 in the form of four notes, all secured by a first mortgage on a production facility in Devil’s Lake, North Dakota and bearing interest at 10% per annum. The notes are due upon the closing of the sale of the property and interest payments are due beginning September 1, 2015. In connection with the issuance of the notes, Ultra Green issued the Company four warrants expiring at various dates in 2025 to purchase 325,000,000 shares of its common stock at an exercise price of $0.001 per share. Enterprises may continue to provide financial support to UG in the future under similar terms. Also during 2015, an impairment of $1,250,000 was recognized on the Series C Notes, resulting in a fair value of $502,110 on the balance sheet as of year-end.

Even though Enterprises holds what might be considered to be a variable interest (the Series C Notes and mortgage notes) in UG, it is not the primary beneficiary as it fails both the power and losses/benefits criteria for primary beneficiary determination. Thus as of December 31, 2015, Enterprises did not consolidate UG.

See also “Note 6 – Fair Value Measurements”, “Note 13 – Notes Receivable”, and “Note 14 – Investment in Convertible Notes”.

Angell

At December 31, 2015, an assessment of the relationship between the Company and Angell was performed as a result of the sale of TCP on June 1, 2015. See “Note 1 – Organization and Description of Business – The Restructuring”. The Company estimates that total assets of Angell immediately after closing were substantially equal to the purchase price. Angell is a VIE since the equity at risk is small compared to the sale price. Further, the Company held a variable interest in the form of the Angell note as adjusted and paid down in the amount of $12,896,875. The receivable amount carried on the Company’s books net of the deferred gain of $10,260,572 is $2,636,303. The Angell note represents the Company’s maximum loss in the VIE. However, the Company has no power to direct any of the activities of Angell, therefore it does not have a controlling financial interest, thus it is not considered a primary beneficiary, and consequently, as of December 31, 2015, the Company did not consolidate Angell. The Company does not provide, nor does it intend to provide, any other financial support to Angell.

Use of Estimates

Preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts for revenue and expenses during the reported period. Actual results could differ from those estimates.

Cash Equivalents

Cash equivalents include highly liquid investments with an original maturity of three months or less at the time of purchase. As of December 31, 2015 and 2014, the Company had no cash equivalents.

Reclassifications

Certain amounts reported in prior periods have been reclassified to conform to the current period’s presentation. There was no effect on members’ equity or net income as previously reported.

Revenue Recognition

Wholesale Trading

Some of the Company’s wholesale trading activities use derivatives such as swaps, forwards, futures, and options to generate trading revenues. These contracts are marked to fair value in the accompanying consolidated balance sheets. The Company’s agreements with the ISOs and the exchanges permit net settlement of contracts, including the right to offset cash collateral in the settlement process. Accordingly, the Company nets cash collateral against the derivative position in the accompanying consolidated balance sheets. All realized and unrealized gains and losses on derivative instruments held for trading purposes are recorded in revenues.

Retail Energy Services

Revenue from the retail sale of electricity to customers is recorded in the period in which the commodity is consumed, net of any applicable sales tax. The Company follows the accrual method of accounting for revenues whereby electricity consumed by customers but not yet billed under the cycle billing method is estimated and accrued along with the related costs. Changes in estimates are reflected in operations in the period in which they are refined.

During the year ended December 31, 2014, the company changed its estimate with respect to retail sales of electricity and recorded an adjustment of $465,000 to unbilled revenue.

Diversified Investments

Revenues from real estate developments, if any, are recognized at the time of a sale closing if all significant conditions are satisfied, including adequate down payment, reasonable assurance of collectability of any notes received, and completion of other contractual requirements. Recognition of all or part of the revenue is deferred if any significant conditions are not satisfied.

Revenues from administrative services and software licenses are recognized on a monthly basis in accordance with the respective agreements with third parties.

Revenue from construction services is accounted for using the percentage of completion method. Completion percentages are calculated by dividing actual costs incurred to date by the total estimated costs to complete the agreement. Costs-to-complete include all direct material and labor costs, indirect costs related to contract performance such as indirect labor, supplies, tools, and repairs, and estimated earnings. Long term contracts are any that span a period-end. This method is used because management considers total costs to be the best available measure of progress on these contracts.

Changes in job performance, job conditions, estimated profit or loss, and final contract settlements may result in revisions to costs and income. Revisions are recognized in the period in which determined and such adjustments could be significant. The asset “costs and estimated earnings in excess of billings on uncompleted contracts” represents revenues recognized in excess of amounts billed. The liability “billings in excess of costs and estimated earnings on uncompleted contracts” represents billings in excess of revenues recognized.

The financial statements include amounts based on management’s best estimates and judgments, the most significant of which relate to costs-to-complete. These estimates may be adjusted as more current information becomes available, and any adjustment could be significant.

Derivative Instruments

In our wholesale operations, we use derivative contracts for trading purposes, seeking to profit from perceived opportunities driven by expected changes in market prices. In our retail business, the Company is exposed to volatility in the cost of energy acquired for sale to customers, and as a result, we use derivatives to hedge or reduce this variability.

Our retail operations follow the guidance of ASC 815 Derivatives and Hedging (“ASC 815”) that permits “hedge accounting” under which the effective portion of gains or losses from the derivative and the hedged item are recognized in earnings in the same period.

To qualify for hedge accounting, the hedge relationships must meet extensive documentation requirements and hedge effectiveness and ineffectiveness must be assessed and measured on an on-going basis.

“Hedge effectiveness” is the extent to which changes in the fair value of the hedging instrument offset the changes in the cash flows of the hedged item. Conversely, “hedge ineffectiveness” is the measure of the extent to which the change in fair value of the hedging instrument does not offset those of the hedged item. If a transaction qualifies as a “highly effective” hedge, ASC 815 permits matching of the timing of gains and losses of the hedged item and the hedging instrument.

For a cash flow hedge, the effective portion of any change in the hedging instrument’s fair value is recorded in accumulated other comprehensive income or “AOCI” until the change in value of the hedged item is recognized in earnings.

Financial Instruments

The Company holds various financial instruments. The nature of these instruments and the Company’s operations expose the Company to foreign currency risk, credit risk, and fair value risk.

Foreign Currencies

A portion of the Company’s assets and liabilities are denominated in Canadian dollars and are subject to fluctuations in exchange rates. The Company does not have any exposure to any highly inflationary foreign currencies.

For foreign subsidiaries whose functional currency is the local foreign currency, balance sheet accounts are translated at exchange rates in effect at the end of the month and income statement accounts are translated at average monthly exchange rates for the period. Foreign currency transactions denominated in a foreign currency result in gains and losses due to the increase or decrease in exchange rates between periods. Translation gains and losses are included as a separate component of equity. Gains and losses from foreign currency transactions are included in other income or expense.

Foreign currency transactions resulted in a gain of $356,288 and a loss of $720,952 for the years ended December 31, 2015 and 2014, respectively.

Concentrations of Credit Risk

Financial instruments that subject the Company to concentrations of credit risk consist principally of deposits in trading accounts and accounts receivable. The Company has a risk policy that includes value-at-risk calculations, position limits, stop loss limits, stress testing, system controls, position monitoring, liquidity guidelines, and compliance training.

At any given time, there may be concentrations of receivables balances with one or more of the exchanges upon which we transact our wholesale business or, in the case of retail, one or more of the utilities operating in purchase of receivables states in which we do business.

Fair Value

The fair values of the Company’s cash, accounts receivable, note receivables, revolver, and accounts payable were considered to approximate their carrying values at December 31, 2015 and 2014 due to the short-term nature of the accounts.

Management believes the carrying values of the Company’s notes payable and Notes reasonably approximate their fair value at December 31, 2015 and 2014 due to the relatively new age of these particular instruments. No assessment of the fair value of these obligations has been completed and there is no readily available market price.

See also “Note 6 – Fair Value Measurements”.

Accounts Receivable

Receivables are reported at the amount management expects to collect from outstanding balances. Differences between amounts due and expected collections are reported in the results of operations for the period in which those differences are determined. Receivables are written off only after collection efforts have failed, and the Company typically does not charge interest on past due accounts. There was an allowance for doubtful accounts of $2,500 and $0 at December 31, 2015 and 2014, respectively.

Securities

The Company classifies its investments in marketable and non-marketable securities as “available-for-sale”. Available-for-sale securities are required to be carried at their fair value, with unrealized gains and losses that are considered temporary recorded in AOCI. The Company periodically evaluates its investments in securities for impairment due to declines in market value considered to be other than temporary. Such impairment evaluations may consider, in addition to declining market prices, general economic conditions and Company-specific valuations. If the Company determines that a decline in market value is other than temporary, then a charge to operations is recorded in “other expense” and a new cost basis in the investment is established.

Inventories

Inventories consist principally of light bulbs and are recorded at the lower of cost (first-in, first-out) or market.

Property, Equipment, and Furniture

Property, equipment, and furniture are carried at cost and additions or replacements are capitalized. The cost of equipment disposed of or retired and the related accumulated depreciation are eliminated from the accounts with any gain or loss included in operations.

Equipment, computers, software, and furniture are depreciated using the straight-line method over estimated useful lives that range from 3 to 7 years. Property is depreciated using the straight-line method over an estimated useful life of 27.5 years. Leasehold improvements are depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to expense as incurred.

Real Estate Development

Costs that relate directly to real estate development projects are capitalized and allocated using the specific identification method. Land acquisition, improvements, and holding costs, including real estate taxes and interest are capitalized while a development is in progress. Interest expense, if any, is capitalized based on specific identification of notes payable issued to finance specific assets under development. Once development on a project has been completed and sales have begun, remaining inventory is recorded at the lower of cost or market. Development costs are charged to cost of sales when the related revenue is recognized or when a development is abandoned.

Acquisitions and Business Combinations

The Company accounts for business combinations in accordance with ASC 805 Business Combinations (“ASC 805”) which requires an acquirer to recognize and measure in its financial statements the identifiable tangible and intangible assets acquired, the liabilities assumed, and any non-controlling interest at fair values at the transaction date. Transaction costs are expensed as incurred.

Acquisitions are initially recorded based on preliminary allocations of the purchase price and management’s assessment of fair values. The allocation process involves a considerable amount of subjective judgment and preliminary estimates of fair values are subject to adjustment as additional information is obtained and finalized, up to one year after the acquisition date.

See “Note 4 – Acquisitions”, “Note 16 - Intangible Assets”, and “Note 19 – Goodwill”.

Non-Controlling Interests

Ownership interests in a business organized as a legal entity are represented by shares or units. The income of the entity is allocated to owners based upon the ratio of their holdings to the total units or shares outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to non-controlling interests in accordance with the terms of the operating agreement.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future net undiscounted cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of, if any, are reported at the lower of the carrying amount or fair value less costs to sell.

Profits Interests

Specific second-tier subsidiaries of Enterprises have Class B members. Under the terms of the subsidiaries’ member control agreements, Class B members have no voting rights, are not required to contribute capital, and have no rights to distributions following termination of employment, but are entitled to a defined share of profits while employed. Since Class B members have no corporate governance rights, risk of capital loss, or opportunity for capital gain, they do not own non-controlling equity interests. Profits interest payments are recorded as compensation expense during the period earned and are classified as accrued compensation on the consolidated balance sheet.

During the years ended December 31, 2015 and 2014, the Company included $2,478,413 and $6,363,520, respectively, in compensation and benefits representing the allocation of profits interests to Class B members.

Income Taxes

The Company is organized as a limited liability company under the laws of Minnesota and has elected to be taxed as a partnership. As such, it is not a taxable entity and no provision for federal or state income taxes has been made on the financial statements. However, holders of preferred units report distributions received on their individual tax returns while members holding common units report their proportionate shares of taxable income or loss (which may vary substantially from the income or loss reported in our consolidated statements of comprehensive income) on theirs.

Noble is a Minnesota corporation, thus the Company has elected to use the taxes payable method. Under that method, income tax expense represents the amount of income tax Noble expects to pay based on the entity’s current year taxable income. TCPC files tax returns with the Canada Revenue Agency and the Tax and Revenue Administration of Alberta.

In accounting for uncertainty in income taxes, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. The Company recognizes interest and penalties on any unrecognized tax benefits as a component of income tax expense. Based on evaluation of the Company’s tax positions, management believes all positions taken would be upheld under an examination.

The Company’s federal and state tax returns are potentially open to examinations for the years 2012 through 2015 and its Canadian tax returns are potentially open to examination for the years 2012 through 2015.

New Accounting Pronouncements

In May 2014, the FASB issued a new revenue recognition standard, ASU 2014-09 Revenue from Contracts with Customers (Topic 606), that eliminated all industry-specific provisions and replaced all current U.S. GAAP guidance on the topic. The new standard provides a unified model to determine when and how revenue is recognized based on the core principle that recognition should depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the seller expects to be entitled. The Company was originally required to adopt the standard on January 1, 2017. In April 2015, the FASB proposed a one-year deferral of the effective date for the standard and the deferral was adopted in August 2015. The Company is now required to adopt the standard on January 1, 2018. Early application is not permitted. The update may be applied using one of two methods, either retrospective application to each prior reporting period presented or retrospective application with the cumulative effect of initially applying the update recognized at the date of initial application. We are currently assessing the impact of the standard on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15 Presentation of Financial Statements – Going Concern (Subtopic 205-40) regarding disclosures of uncertainties about an entity’s ability to continue as a going concern. Under GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Currently, there is no guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures and the update provides such. The update applies to all entities, are effective for the annual period ending after December 15, 2016 and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact of ASU 2014-15 on the Company’s disclosures.

In February 2015, the FASB issued ASU 2015-02 Amendments to the Consolidation Analysis (“ASU 2015-02”), amending ASC 810 to improve the guidance by simplifying the requirements for consolidation and placing more emphasis on risk of loss when determining a controlling financial interest. ASU 2015-02 is effective for the annual period ending after December 15, 2015 and subsequent interim and annual periods with early adoption permitted. The adoption of ASU 2015-02 is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03 Interest – Imputation of Interest (Topic 835) simplifying the presentation of debt issuance costs. The new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the new guidance. This guidance is effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted for financial statements that have not been previously issued. The Company expects to adopt ASU 2015-03 in the first quarter of 2016 and such adoption is not expected to have a material impact on the Company’s consolidated financial position and disclosures.

In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330) simplifying the measurement of inventory. The new guidance requires that an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the impact of ASU 2015-11 on the Company’s consolidated financial position and disclosures.

In September 2015, the FASB issued ASU 2015-16 Business Combinations (Topic 805) simplifying the accounting for measurement period adjustments. The amendments in the update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements, the effect on earrings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The update requires an entity to present separately on the income statement or disclose in the notes the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for annual and interim periods beginning after December 15, 2016 and should be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted for financial statements that have not yet been made available for issuance. The Company is currently evaluating the impact of ASU 2015-16 on the Company’s consolidated financial position and disclosures.

In November 2015, the FASB issued ASU 2015-17 Income Taxes (Topic 740) simplifying the balance sheet classification of deferred taxes. The new guidance requires that an entity present deferred tax liabilities and assets to be classified as noncurrent in a classified balance sheet. This guidance is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted for financial statements that have not been previously issued. The Company has adopted ASU 2015-17 on the Company’s consolidated financial position and disclosures for this period.

3. Summary Consolidating Financial Data

While the Company no longer has an ownership interest in Enterprises and its subsidiaries after the Distribution Date, an assessment of the relationship between the entities as of December 31, 2015 with respect to ASC 810 guidance was performed because the entities have an ongoing business relationship as a result of the Term Loan. Pursuant to such assessment, Aspirity holds a variable interest in Enterprises in the form of the Term Loan, and due to certain related party considerations, delay in the issuance of FERC approval of equity grants to executives and others, and the nature and size of the Term Loan, it was concluded that Aspirity should consolidate Enterprises as a VIE as of December 31, 2015. ASC 810 also requires the Company to reevaluate the status of Enterprises as a VIE on a regular basis.

Presented below are consolidating balance sheets for Aspirity and Enterprises:

	As of December 31, 2015 (Restated)
	Aspirity Holdings and Subsidiaries			Krieger Enterprises and Subsidiaries			Eliminations			Aspirity Holdings Consolidated
Current assets
Unrestricted cash	$	718,497		$	1,612,904		$	-		$	2,331,401
Cash in trading accounts		-			8,047,331			-			8,047,331
Cash collateral		63,500			182,500			-			246,000
Marketable securities		-			-			-			-
Trade accounts receivable, net		381,977			5,888,184			(381,977	)		5,888,184
Inventory, average cost basis		-			53,917			-			53,917
Costs and estimated earnings in excess of billings on uncompleted contracts		-			7,503			-			7,503
Notes receivable, net of deferred gain		-			795,995			-			795,995
Prepaid expenses and other current assets		77,937			963,317			(269,313	)		771,941
Total current assets		1,241,911			17,551,651			(651,290	)		18,142,272
Property, equipment and furniture, net		88,172			1,260,139			-			1,348,311
Other assets
Intangible assets, net		-			852,669			-			852,669
Deferred financing costs, net		300,171			13,854			-			314,025
Term Loan		20,248,186			-			(20,248,186	)		-
Restricted cash		-			1,319,371			-			1,319,371
Real estate held for development		-			2,714,297			-			2,714,297
Notes receivable, net of deferred gain		-			2,586,616			-			2,586,616
Investment in convertible notes		-			502,110			-			502,110
Goodwill		-			1,148,117			-			1,148,117
Deferred tax asset		-			47,000			-			47,000
Other assets		-			24,466			-			24,466
Total assets	$	21,878,440		$	28,020,290		$	(20,899,476	)	$	28,999,254

Current liabilities
Current portions of debt
Revolver	$	-		$	1,688,405		$	-		$	1,688,405
Term Loan		-			8,458,033			(8,458,033	)		-
Senior notes		-			1,214,762			-			1,214,762
Renewable unsecured subordinated notes		10,120,175			-			-			10,120,175
Accounts payable - trade		665,502			4,362,772			(651,290	)		4,376,984
Accrued expenses		-			2,105,339			-			2,105,339
Accrued compensation		-			723,355			-			723,355
Accrued interest		1,483,020			20,799			-			1,503,819
Billings in excess of costs and estimated earnings on uncompleted contracts		-			710,827			-			710,827
Total current liabilities		12,268,697			19,284,292			(9,109,323	)		22,443,666

Long-term liabilities
Senior notes		-			242,232			-			242,232
Term loan		-			11,790,153			(11,790,153	)		-
Renewable unsecured subordinated notes		14,364,323			-			-			14,364,323
Total long term liabilities		14,364,323			12,032,385			(11,790,153	)		14,606,555
Total liabilities		26,633,020			31,316,677			(20,899,476	)		37,050,221
Members’ equity (deficit)
Series A preferred equity		2,745,000			-			-			2,745,000
Common equity		(7,499,580	)		-			-			(7,499,580	)
Accumulated other comprehensive income (loss)		-			-			-			-
Total members’ equity (deficit)		(4,754,580	)		-			-			(4,754,580	)
Non-controlling interest		-			(3,955,159	)		-			(3,955,159	)
Accumulated other comprehensive income (loss) attributed to non-controlling interest		-			658,772			-			658,772
Total equity (deficit)		(4,754,580	)		(3,296,387	)		-			(8,050,967	)
Total liabilities and equity (deficit)	$	21,878,440		$	28,020,290		$	(20,899,476	)	$	28,999,254

Presented below are consolidating statements of comprehensive income for Aspirity and Enterprises:

	For the Year Ended December 31, 2015
	Aspirity Holdings and Subsidiaries			Krieger Enterprises and Subsidiaries			Eliminations			Aspirity Holdings Consolidated
Revenue
Wholesale trading, net		-			14,293,475			-			14,293,475
Retail energy services		-			30,482,812			-			30,482,812
Financial services		2,877,149			-			(2,877,149	)		-
Real estate sales		-			351,725			-			351,725
Management services		-			710,000			-			710,000
Construction services		-			2,285,998			-			2,285,998
Total sales and services revenue		2,877,149			33,830,535			(2,877,149	)		33,830,535
Total revenue		2,877,149			48,124,010			(2,877,149	)		48,124,010
Costs of sales and services
Cost of retail electricity sold		-			26,663,003			-			26,663,003
Cost of real estate sold		-			319,261			-			319,261
Cost of construction services		-			1,703,956			-			1,703,956
Total costs of sales and services		-			28,686,220			-			28,686,220
Gross profit on sales and services		2,877,149			5,144,315			(2,877,149	)		5,144,315
Operating expenses
Sales and marketing		7,000			1,346,221			-			1,353,221
Compensation and benefits		824,332			12,643,599			-			13,467,931
Professional fees		531,541			1,931,819			-			2,463,360
Other general and administrative		2,866,608			2,808,894			(449,500	)		5,226,002
Trading tools and subscriptions		-			1,292,662			-			1,292,662
Total operating expenses		4,229,480			20,023,195			(449,500	)		23,803,176
Operating income (loss)		(1,352,331	)		(585,405	)		(2,427,649	)		(4,365,386	)
Other income (expense)
Interest expense		(3,205,933	)		(3,239,923	)		2,877,149			(3,568,707	)
Interest income		20,485			808,737			-			829,222
Gain on sale of subsidiary		-			1,343,156			-			1,343,156
Impairment of convertible notes		-			(1,250,000	)		-			(1,250,000	)
Gain (loss) on foreign currency exchange		-			356,288			-			356,288
Gain (loss) on sale of marketable securities		(129,743	)		-			-			(129,743	)
Other income		-			1,976,127			-			1,976,127
Other income (expense), net		(3,315,191	)		(5,615	)		2,877,149			(443,657	)
Income (loss) before income taxes		(4,667,522	)		(591,020	)		449,500			(4,809,042	)
Income tax benefit		-			(47,000	)		-			(47,000	)
Net income (loss)		(4,667,522	)		(544,020	)		449,500			(4,762,042	)
Net income attributable to non-controlling interest		-			(468,484	)		-			(468,484	)
Net income (loss) attributable to Company		(4,667,522	)		(75,536	)		449,500			(4,293,558	)
Preferred distributions		(549,072	)		-			-			(549,072	)
Net income (loss) attributable to common		(5,216,594	)		(75,536	)		449,500			(4,842,630	)
Comprehensive income (loss) attributable to non-controlling interest
Foreign currency translation adjustment		-			(340,269	)		-			(340,269	)
Change in fair value of cash flow hedges		-			863,408			-			863,408
Unrealized gain on securities		-			(11,116	)		-			(11,116	)
Comprehensive loss attributable to non-controlling interest		-			43,539			-			43,539
Comprehensive loss attributable to common		(5,216,594	)		(75,536	)		449,500			(4,842,630	)
Comprehensive loss attributable to the Company		(5,216,594	)		(31,997	)		449,500			(4,799,091	)

4. Acquisitions

On August 7, 2015, Enterprises provided $400,000 of bridge financing to Noble Conservation Solutions, Inc., a Minnesota corporation (“Noble”) while the parties completed the negotiation of definitive agreements regarding purchase of a controlling equity interest. Noble provides construction and consulting services to businesses and homeowners to improve energy efficiency. The bridge loan bore interest at a rate of 6% per annum and matured on September 1, 2015.

Effective September 1, 2015, Enterprises purchased 60% of the issued and outstanding shares of Noble for an aggregate purchase price of $875,002, paid in cash. In conjunction with the acquisition, Enterprises also committed to lend Noble up to $1,000,000 on a revolving basis including a refinance of the bridge loan. Amounts outstanding under the revolver may be repaid at any time without penalty and Noble may borrow available funds from Enterprises upon ten business days’ notice. The revolver bears interest at a rate of 7.00% per annum, payable quarterly, and matures on August 31, 2020. The revolver is secured by a second position lien on, and security interest in, Noble’s assets. Accrued interest as of December 31, 2015 was $23,396. Amounts owed under the facility are eliminated upon consolidation.

The Company recognized approximately $2,286,000 in revenue and $82,000 of net loss before interest, depreciation, and amortization expense from Noble since the date of acquisition.

Consideration for the acquisition consisted of the following:

	At September 1, 2015
Assets acquired
Unrestricted cash	$	943,496
Accounts receivable		1,696,953
Costs and estimated earnings in excess of billings on uncompleted contracts		151,651
Property, equipment, and furniture, net		275,180
Other assets		19,980
Total tangible assets		3,087,260
Identifiable intangibles		895,000
Goodwill		1,148,117
Total intangible assets		2,043,117
Total assets acquired	$	5,130,377

Liabilities and non-controlling interest assumed
Revolver	$	313,603
Accounts payable		1,455,612
Accrued expenses		1,638
Billings in excess of costs and estimated earnings on uncompleted contracts		777,345
Accrued compensation		56,441
Accrued interest		2,078
Note payable		1,065,323
Total liabilities		3,672,040
Non-controlling interest		583,335
Total liabilities and non-controlling interest assumed		4,255,375
Net assets acquired	$	875,002

The fair value of the intangible assets noted above were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820.

The following unaudited pro forma information presents a summary of consolidated results of operations of the Company as if the acquisition had occurred on January 1, 2014, the beginning of the earliest period presented. The information is presented for informational purposes only and is not necessarily indicative of what the results of operations actually would have been had the acquisition been completed on such date. In addition, the unaudited pro forma condensed consolidated financial information does not attempt to project the future financial position or operating results of the Company after the acquisition.

	Years Ended December 31,
	2015			2014
	Unaudited			Unaudited
Revenue	$	51,717,698		$	52,851,760
Net income (loss)	$	(5,589,654	)	$	3,872,940
Net income (loss) attributable to Enterprises	$	(569,959	)	$	56,254

On January 2, 2014, after receiving regulatory approval from FERC, the Company closed on the purchase of all of the outstanding equity interests of Town Square Energy East, LLC (“TSEE”), formerly known as Discount Energy Group, LLC. TSEE is licensed to provide electricity to retail customers in Maryland, New Jersey, Ohio, and Pennsylvania.

Consideration for the acquisition consisted of the following:

	At January 2, 2014

Assets acquired
Deposits - PJM	$	191,069
Deposits - utilities		90,500
Prepaid expenses		12,300
Total tangible assets		293,869
State licenses & utility relationships		285,800
Brand name		107,000
Web site		101,000
Active customer list		56,100
Inactive customer list		2,025
Domain names		2,733
Total intangible assets		554,658
Total assets acquired	$	848,527

Liabilities assumed
Accounts payable	$	168,510
Total liabilities assumed		168,510
Net assets acquired		680,017

The fair value of the intangible assets noted above were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820.

5. Accounting for Derivatives and Hedging Activities

The following table lists the fair values of the Company’s derivative assets and liabilities as of December 31, 2015 and 2014:

	Fair Value
	Asset Derivatives		Liability Derivatives

At December 31, 2015
Not designated as hedging instruments:
Energy commodity contracts	$	72,704	$	(260,358	)
Total derivative instruments		72,704		(260,358	)
Cash deposits in collateral accounts		8,234,985		—
Cash in trading accounts, net	$	8,307,689	$	(260,358	)

At December 31, 2014
Designated as cash flow hedges:
Energy commodity contracts	$	15,732	$	(879,140	)
Not designated as hedging instruments:
Energy commodity contracts		2,350,662		(2,556,862	)
FTRs		1,435,819		—
Total derivative instruments		3,802,213		(3,436,002	)
Cash deposits in collateral accounts		20,733,441		—
Cash in trading accounts, net	$	24,535,654	$	(3,436,002	)

As of December 31, 2015, there were no derivative instruments designated as cash flow hedges.

As of December 31, 2014, the Company had hedged the cost of 48,947 MWh (approximately 10.5% of expected 2015 electricity purchases for the customers receiving service from us as of that date) and $863,408 of the net gain on the effective portion of the hedge was deferred and included in AOCI. This entire amount was reclassified to cost of energy sold by December 31, 2015.

The following table summarizes the amount of gain or loss recognized in AOCI or earnings for derivatives designated as cash flow hedges for the periods indicated:

Period and Item	Gain (Loss) Recognized in AOCI			Income Statement Classification	Gain (Loss) Reclassified from AOCI
Year Ended December 31, 2015
Cash flow hedges	$	(850,047	)	Cost of energy sold.	$	(1,713,455	)
Year Ended December 31, 2014
Cash flow hedges	$	(1,128,514	)	Cost of energy sold.	$	91,508

The following table provides details with respect to changes in AOCI as presented in our consolidated balance sheets, including those relating to our designated cash flow hedges, for the period from January 1, 2014 to December 31, 2015:

	Foreign Currency			Cash Flow Hedges			Available for Sale Securities			Total
Balance - December 31, 2013	$	338,008		$	356,614		$	5,767		$	700,389

Other comprehensive income (loss) before reclassifications		661,033			(1,128,514	)		11,116			(456,365	)
Amounts reclassified from AOCI		-			(91,508	)		(5,767	)		(97,275	)
Net current period other comprehensive income (loss)		661,033			(1,220,022	)		5,349			(553,640	)
Balance - December 31, 2014	$	999,041		$	(863,408	)	$	11,116		$	146,749
Other comprehensive loss before reclassifications		(340,269	)		(850,047	)		(11,116	)	$	(1,201,432	)
Amounts reclassified from AOCI		-			1,713,455			-			1,713,455
Net current period other comprehensive income (loss)		(340,269	)		863,408			(11,116	)		512,023
Balance - December 31, 2015	$	658,772		$	-		$	-		$	658,772

6. Fair Value Measurements

The Fair Value Measurement Topic of FASB’s ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three types of valuation inputs in the fair market hierarchy are as follows:

●	“Level 28 inputs” are quoted prices in active markets for identical assets or liabilities.

●	“Level 2 inputs” are inputs other than quoted prices that are observable either directly or indirectly for the asset or liability.

●	“Level 3 inputs” are unobservable inputs for which little or no market data exists.

Financial instruments categorized as Level 28 holdings are publicly traded in liquid markets with daily quotes and include exchange-traded derivatives such as futures contracts and options, certain highly-rated debt obligations, and some equity securities. Holdings such as shares in money market mutual funds that are based on net asset values as derived from quoted prices in active markets of the underlying securities are also classified as Level 1.

The fair values of financial instruments that are not publicly traded in liquid markets, but do have characteristics similar to observable market information such as wholesale commodity prices, interest rates, credit margins, maturities, collateral, and the like upon which valuations are based are categorized in Level 2.

Financial instruments that are not traded in publicly quoted markets or that are acquired based on prices and terms determined by direct negotiation with the issuer are classified as Level 3. Level 3 securities are carried at book value which management believes approximates fair value, until circumstances otherwise dictate while Level 3 derivatives are adjusted to fair value based on appropriate mark-to-model methodologies.

Generally, with respect to valuation of Level 3 instruments, significant changes in inputs will result in higher or lower fair value measurements, any particular calculation or valuation methodology may produce estimates that may not be indicative of net realizable value or reflective of future fair values, and such variations could be material.

From time to time, the Company may engage third parties such as appraisers, brokers, or investment bankers to assist management in its valuation and classification of financial instruments.

There have been no changes in the methodologies used since December 31, 2014.

The following table presents certain assets measured at fair value on a recurring basis as of the dates indicated:

	Level 1		Level 2		Level 3		Total
December 31, 2015
Cash in trading accounts, net	$	8,047,331	$	-	$	-	$	8,047,331
Marketable securities		-		-		-		-
Notes receivable, net of deferred gain		-		-		3,382,611		3,382,611
Convertible notes		-		-		502,110		502,110

December 31, 2014
Cash in trading accounts, net	$	21,099,652	$	-	$	-	$	21,099,652
FTR positions, net		-		-		1,435,819		1,435,819
Marketable securities		311,586		-		-		311,586
Convertible notes		-		-		1,604,879		1,604,879

There were no transfers during the year ended December 31, 2015 between Levels 28 and 2.

Level 3 Assets

The following table reconciles beginning and ending Level 3 fair value financial instrument balances for the years ended December 31, 2015 and 2014:

Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
Balance - December 31, 2013	$	353,504
Total gains and losses:
Included in other comprehensive income		-
Included in earnings		1,435,819
Purchases		1,604,879
Transfers into Level 3		-
Transfers out of Level 3 (1)		(353,504	)
Balance - December 31, 2014		3,040,698
Total gains and losses:
Included in other comprehensive income		-
Included in earnings		(2,685,819	)
Purchases		3,529,842
Transfers into Level 3		-
Transfers out of Level 3 (1)		-
Balance - December 31, 2015	$	3,884,721

Gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held as of December 31, 2015	$	-

1	Reflects foreclosure on mortgage note and transfer of land received to “land held for development”; see “Note 18 - Real Estate”.

Notes Receivable Valuation

The fair value of the notes receivable are based on expected future cash flows discounted at market interest rates, or current interest rates for similar instruments and are classified as Level 3 within the fair value hierarchy.

Convertible Notes Valuation Techniques and Sensitivity of Level 3 Fair Values

The following table describes the valuation techniques used to measure the fair value of the Company’s Level 3 assets at December 31, 2015.

Level 3 Asset	Fair value at December 31, 2015	Valuation Techniques	Unobservable Inputs	Range of Inputs
Convertible notes	$ 502,110	Enterprise value allocation A discounted cash flow model was used to estimate enterprise and common equity value, the resulting common equity value was divided by all convertible notes principal and accrued interest outstanding resulting in a valuation factor of 28.657% which was applied to the accreted cost of the Company’s position of $1,752,110 for an impairment charge of $1,250,000 and a remaining fair value amount of $502,110	Future cash flows	various
			Component costs of capital	0.00% for debt; 26.21% for equity
			Target capital structure	20% debt; 80% equity
			Marginal tax rate	40%
			Wtd avg cost of capital	21.46%

As no public market exists for any of the securities of Ultra Green, including its Series C Notes, management considers its investment to be a Level 3 financial instrument to be carried at book value which management believes approximates fair value, until circumstances otherwise dictate.

Changes in the unobservable valuation inputs listed above would have a direct impact on the fair values of the above instruments. For example, changes in the estimated current price of the embedded option incorporated into the Series C Notes would increase or decrease the fair value of the investment, as would changes in required yields on non-convertible debt for comparable credits.

Each quarter, management performs a valuation of the underlying common equity and the security using generally accepted methods to value the obligations of private companies to determine if impairment to its carrying value exists.

As of December 31, 2015, the Company had an investment of $1,752,110 (principal $1,500,000 and accrued interest of $252,110) in the Series C Notes of Ultra Green and the valuation of the securities as of the same date indicated that their estimated fair value had fallen substantially from historical values approximating cost, consequently, the Company has recorded an impairment charge to earnings (other expense) of $1,250,000 and reduced the carrying value of its investment in the Series C Notes to their estimated fair value of $502,110.

7. Income Taxes

When Enterprises purchased Noble on September 1, 2015, Noble became a corporation. The entity’s effective income tax rate for 2015 is 39.5%.

The deferred tax asset consists of the following components as of December 31, 2015 and 2014:

	December 31, 2015		December 31, 2014
Net operating loss carryforward	$	47,000	$	-
Valuation allowance		-		-
Deferred tax asset, net	$	47,000	$	-

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Noble records a tax valuation allowance when it is more likely than not that it will not be able to recover the value of its deferred tax assets. There was no valuation allowance for deferred tax assets as of December 31, 2015.

Noble calculated its estimated annualized effective tax expense (benefit) rate at (39.5%) for the year ended December 31, 2015 and had an income tax benefit of $47,000 based on its $119,000 pre-tax loss from continuing operations for the year.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

The Company files income tax returns in U.S. federal and state jurisdictions. 2012 through 2015 remaining open for examination by the IRS and state agencies.

At December 31, 2015, the Company had net operating loss carryforwards for federal tax purposes of approximately $119,000 available to offset future taxable income that begin to expire in the year 2035.

8. Cash

The Company deposits its unrestricted cash in financial institutions. Balances, at times, may exceed federally insured limits. Cash held in trading accounts may be unavailable at times for immediate withdrawal depending upon trading activity. Cash needed to meet credit requirements for outstanding trades, that available for immediate withdrawal, and deposited in collateral accounts as of December 31, 2015 and 2014 was as follows:

	December 31, 2015		December 31, 2014
Credit requirements	$	2,054,584	$	6,113,160
Available for withdrawal		5,992,747		14,986,492
Cash in trading accounts	$	8,047,331	$	21,099,652
Cash collateral	$	246,000	$	-

Restricted cash at December 31, 2015 and 2014 was $1,319,371 posted as security in connection with certain litigation in the Canadian courts. See “Note 25 - Commitments and Contingencies”.

9. Accounts Receivable

Accounts receivable – trade consists of receivables from both our wholesale trading and retail segments. Wholesale trading receivables represent net settlement amounts due from a market operator or an exchange while those from retail include amounts resulting from sales to end-use customers.

	December 31, 2015		December 31, 2014
Wholesale trading	$	276,018	$	515,999
Retail energy services - billed		2,278,315		1,158,019
Retail energy services - unbilled		1,280,000		720,228
Diversified investments		505,763		-
Construction services, net of $2,500 allowance for doubtful accounts		1,548,088		-
Accounts receivable - trade	$	5,888,184	$	2,394,246

As of December 31, 2015, there was one account in the retail energy service segment with a balance greater than 10% of the total and representing 30% of all receivables.

As of December 31, 2014, there were two individual accounts with receivable balances greater than 10%; one in the wholesale segment, representing 21% of the balance at year end, and one in the retail energy services segment, representing 44% of the balance at year end. The Company believes that any risk associated with these concentrations would be minimal.

10.

Marketable Securities

The following table shows the cost and estimated fair value of available-for-sale securities at December 31, 2015 and 2014:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
At December 31, 2015
U.S. equities	$	-	$	-	$	-	$	-
Money market fund		-		-		-		-
Total	$	-	$	-	$	-	$	-

At December 31, 2014
U.S. equities	$	299,836	$	11,116	$	-	$	310,952
Money market fund		634		-		-		634
Total	$	300,470	$	11,116	$	-	$	311,586

For the years ended December 31, 2015 and 2014, the Company had sales of securities and a realized loss of $129,743 and a gain of $65,655, respectively, and recognized no impairment charges.

11. Inventories

During the fourth quarter of 2015, Noble began purchasing light bulbs for distribution as well as for use on backlog jobs. As of December 31, 2015, $53,917 was in inventory, which is valued at the lower of cost or market.

12. Costs and Estimated Earnings on Uncompleted Contracts

The following is a summary of contracts in progress at December 31, 2015:

	December 31, 2015
Costs incurred on uncompleted contracts	$	450,584
Estimated earnings		208,306
Total costs and estimated earnings on uncompleted contracts		658,890
Billings		(1,362,214	)
Costs and estimated earnings on uncompleted contracts, net of billings	$	(703,324	)

Costs and estimated earnings in excess of billings on uncompleted contracts	$	7,503
Billings in excess of costs and estimated earnings on uncompleted contracts		(710,827	)
Costs and estimated earnings on uncompleted contracts, net of billings	$	(703,324	)

As of December 31, 2015, Noble had uncompleted contracts with bid prices of $1,758,000 and estimated costs to complete of approximately $782,000.

13. Notes Receivable

On June 1, 2015, the Company sold of 100% of the outstanding equity interests of TCP to Angell pursuant to an Equity Interest Purchase Agreement (the “Purchase Agreement”) for a purchase price of $20,740,704, paid with $500,000 cash and a secured promissory note of $20,240,704 bearing interest at an annual rate of 6.00% and payable in 12 quarterly installments of $1,855,668 each (the “Original Angell Note”). The Company and Angell also entered into a Security and Guarantee Agreement and a Sublease for certain space and equipment at the Company’s Lakeville office. Apollo and Angell entered into a Software License for Apollo’s proprietary DataLive™ software and an Administrative Services Agreement. Effective, July 1, 2015, the Company assigned all of its rights and obligations under these agreements to Enterprises.

On September 2, 2015, Enterprises and Angell entered into a First Amendment to the Purchase Agreement (the “Amendment”), pursuant to which Enterprises agreed to cancel the Sublease, re-employ the associated personnel, and reduce the purchase price to $15,000,000. Concurrently, Angell also executed an Amended and Restated Secured Promissory Note in favor of Enterprises which replaced the Angell Note in a principal amount of $15,024,573 (the “Amended Angell Note”). The Amended Note bears interest at rate of 6% per annum, is payable in 16 quarterly installments beginning September 1, 2015 (with the first installment being $1,142,100 and the remaining 15 installments being $1,063,215), and matures on June 1, 2019. The Amended Note is secured by a first priority security interest in the assets of Angell and TCP and is guaranteed pursuant to the Security and Guarantee Agreement by Angell, TCP, and Michael Angell as an individual.

Effective November 5, 2015, Angell terminated the 24 month license for Apollo’s DataLive™ software and entered into a perpetual license for such in return for a lump sum payment plus ongoing royalties based on TCP’s marketing of the software. Enterprises recognized a gain of $1,600,000, which is included in other income.

Effective December 1, 2015, the Administrative Services Agreement was amended to reduce the management fees for December 2015 and January 2016 to $10,000 per month and provide that after January 2016, Enterprises would be compensated for special projects.

On December 31, 2015, the Purchase Agreement was amended to document a verbal agreement between the parties regarding a non-compete. The parties had agreed that in the event Angell terminated an employee of TCP, Enterprises could not hire that employee for 60 days. Pursuant to the amendment, if Enterprises requested waiver of the 60 day non-compete, Enterprises would have to pay Angell, with the amount depending upon the book of the trader. If a trader had a positive book, the payment would be 60 days of salary; if negative, it would equal cumulative losses to the date of termination with the total amount treated as a principal note reduction. From the closing date to December 31, 2015, eight TCP traders were terminated by Angell and hired by Enterprises for a total reduction of note principal of $439,437.

The following table summarizes the effect of the sale on the Company’s balance sheet at closing on June 28 and as amended effective September 1, 2015 and December 31, 2015:

	At closing June 1, 2015			As amended September 1, 2015			As amended December 31, 2015
Purchase price	$	20,000,000		$	15,000,000		$	14,560,563
Assumption of liabilities		2,912,825			2,912,825			2,912,825
Total consideration		22,912,825			17,912,825		$	17,473,388
Cash in trading accounts		5,740,704			5,740,704			5,740,704
Property, equipment, and furniture		128,935			128,935			128,935
Total assets sold		5,869,639			5,869,639			5,869,639
Total gain on sale		17,043,186			12,043,186			11,603,749
Assets sold, net of liabilities assumed	$	2,956,814		$	2,956,814		$	2,956,814

Purchase price	$	20,000,000		$	15,000,000		$	14,560,563
Cash down payment		(500,000	)		(500,000	)		(500,000	)
Working capital true-up		-			524,573			524,573
Note principal amount		19,500,000			15,024,573			14,585,136
Deferred gain on sale		(16,543,186	)		(12,067,759	)		(11,628,322	)
Note receivable, net of deferred gain	$	2,956,814		$	2,956,814		$	2,956,814

ASC 450-30-25-1 and SEC SAB Topic 13.A state, in part, that gains should not be recognized prior to their realization, consequently, the Company has deferred the gain associated with the sale and recorded such on the consolidated balance sheet as an offset to the Amended Angell Note. The deferred gain will be recognized on a pro rata basis as payments are received.

Under the terms of the Amended Angell Note, in the event of default, Angell has 45 days to cure. If the default is uncured at the end of such period, the holder may declare all or any part of the note immediately due and payable or exercise any other rights and remedies under the Uniform Commercial Code. Interest on the note is accrued monthly and is added to the principal balance. As of December 31, 2015, interest of $92,775 was accrued.

On August 20, 2015, Cyclone Partners loaned $317,728 to Copper Creek Development II, LLC on an unsecured basis. The note bears interest at 5% per annum and principal and interest are due on the earlier of demand or July 31, 2017. As of December 31, 2015, $5,614 of interest was accrued.

Enterprises loaned Ultra Green $325,000 during 2015 under four different note agreements. The notes are secured by a first mortgage on Ultra Green’s production facility in Devil’s Lake, North Dakota and bear interest at 10% per annum. Interest only payments are due beginning September 1, 2015. The notes mature when the sale of the North Dakota facility is closed. In connection with the issuance of these notes, Ultra Green issued the Company four warrants to purchase 325,000,000 shares each of its common stock for $0.001 per share. The warrants expire at various dates in 2025. Total accrued interest as of December 31, 2015 was $5,191.

The following table shows notes receivable balances as of the dates indicated:

	December 31, 2015			December 31, 2014
Total
Notes receivable.	$	13,539,603		$	-
Plus: interest receivable		103,580			-
Less: deferred gain on sale		(10,260,572	)		-
Total notes receivable, net of deferred gain	$	3,382,611		$	-

Current
Angell note receivable	$	3,414,794		$	-
Deferred gain on sale		(2,716,765	)		-
Interest receivable		97,966			-
Current notes receivable, net of deferred gain	$	795,995		$	-

Long term
Angell note receivable	$	9,482,081		$	-
Deferred gain on sale		(7,543,807	)		-
Copper Creek note receivable		317,728			-
Ultra Green mortgage notes		325,000			-
Interest receivable		5,614			-
Long term notes receivable, net of deferred gain	$	2,586,616		$	-

Total interest received during 2015 was $518,165.

14.

Investment in Convertible Notes

During 2014, the Company invested $1,500,000 in privately placed Series C Convertible Promissory Notes issued by Ultra Green (the “Series C Notes”). The Series C Notes will mature on December 31, 2019 and bear interest at a fixed rate of 10% per annum. Interest will accrue until June 30, 2016, at which time all accrued and unpaid interest will become due and payable. Thereafter, interest will be due and payable on a quarterly basis. Each dollar of Series C Note principal and accrued but unpaid interest is ultimately convertible into 100 shares of Ultra Green’s common stock.

During the Company’s valuation of the Series C Notes it was determined that there should be an Other Than Temporary Impairment (“OTTI”) recorded. Based on the valuation performed, an impairment was recorded to other expense of $1,250,000; which reduced the fair value to $502,110. This fair value includes capitalized interest.

Total capitalized interest on the Series C Notes as of December 31, 2014 was $104,879.

See also “Note 6 - Fair Value Measurements”.

In addition, the Company lent the services of Mr. Keith Sperbeck, its Vice President – Operations, to Ultra Green as its Interim CEO for an indefinite period concluding when Ultra Green hires a full-time chief executive officer. In lieu of any cash compensation to either Mr. Sperbeck or the Company, on June 19, 2014, Ultra Green issued the Company a non-statutory option to purchase 50,000,000 shares of its common stock for $0.01 per share, which option was fully vested and exercisable immediately upon issuance.

15. Property, Equipment, and Furniture

Property, equipment, software, furniture, and leasehold improvements consisted of the following at December 31:

	2015			2014
Equipment and software	$	1,049,030		$	857,952
Furniture		394,072			304,791
Vehicles		256,542			-
Land		150,000			150,000
Building		137,958			137,958
Leasehold improvements		331,806			197,102
Property, equipment and furniture, gross		2,319,408			1,647,803
Less accumulated depreciation		(971,097	)		(885,274	)
Property, equipment, and furniture, net	$	1,348,311		$	762,529

With the acquisition of Noble, the Company acquired property, equipment, and furniture with a value of $275,180.

Depreciation expense was $156,404 and $169,727 for the years ended December 31, 2015 and 2014, respectively.

16. Intangible Assets

On June 29, 2012, TCP acquired certain assets and the business of Community Power & Utility LLC (“CP&U”), a retail energy supplier serving residential and small commercial markets in Connecticut, for $160,000. The business has been re-named “Town Square Energy” and is now a wholly-owned second-tier subsidiary of the Company. Of the purchase price, $85,000 was allocated to the acquisition of an existing service contract with an industry-specific provider of transaction management, billing, and customer information software and services, and $75,000 was allocated to customer relationships.

The fair value of these intangible assets was based on significant inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820. The fair value of the service contract was based on the replacement price and will be amortized over twenty-three months, its useful life, using the straight-line method. Customer relationships were valued using a variation of the income approach. Under this approach, the present value of expected future cash flows resulting from the relationships is used to determine the fair value which will be amortized over three years using the straight-line method.

Effective January 1, 2013, in connection with the sale of his units to Timothy S. Krieger, the Company’s founder, Chairman, Chief Executive Officer, and controlling member, the Company entered into a non-competition agreement with David B. Johnson, a current director of the Company valued at $500,000, to be amortized and paid in equal installments over 24 months.

On January 2, 2014, the Company acquired 100% of the outstanding membership interests of TSEE, formerly known as DEG, for a total purchase price of $848,527, consisting of $680,017 in cash and $168,510 in assumption of accounts payable. Of this total consideration, $293,869 was allocated to tangible assets including deposits with PJM and certain utilities and prepaid expenses and $554,658 was allocated to intangible assets. Intangible assets acquired included state licenses and utility relationships, the DEG brand name, a fully functional website, active and inactive customer lists, and domain names. The intangible assets will be amortized over 24 months using the straight line method.

In connection with the purchase of Noble, $895,000 of the purchase price was allocated to intangible assets including a trade name, non-compete agreements, customer lists, and backlog. These intangible assets will be amortized on a straight line basis over their estimated useful lives of one to eleven years.

	December 31, 2015			December 31, 2014
TSE intangibles	$	160,000		$	160,000
Non-compete agreement		500,000			500,000
TSEE intangibles		554,658			554,658
Noble intangibles (note 4)		895,000			-
Intangible assets, gross		2,109,658			1,214,658
Less accumulated amortization		(1,256,989	)		(945,509	)
Intangible assets, net	$	852,669		$	269,149

Future amortization of intangibles is as follows:

Years Ended December 31,
2016	$	120,659
2017		107,992
2018		107,992
2019		107,992
2020 and thereafter		408,034
Total	$	852,669

Total amortization of intangible assets for the years ended December 31, 2015 and 2014 was $311,480 and $591,487, respectively and is included in other general and administrative expenses.

17. Deferred Financing Costs

Prior to the May 10, 2012 effective date of its Notes Offering, the Company incurred certain professional fees and filing costs associated with the offering totaling $393,990. The Company has capitalized these costs and amortizes them on a monthly basis over the weighted average term of the Notes sold, exclusive of any expected renewals.

	December 31, 2015			December 31, 2014
2012 registration statement	$	393,990		$	393,990
2015 registration statement		300,792			-
REH revolver		35,000			35,000
Deferred financing costs, gross		729,782			428,990
Less accumulated amortization		(415,757	)		(187,246	)
Deferred financing costs, net	$	314,025		$	241,744

Total amortization of deferred financing costs for the year ended December 31, 2015 and 2014 was $228,511 and $130,815, respectively and is included in other general and administrative expenses.

18. Real Estate

As of December 30, 2015 and 2014 land held for development consisted of $2,714,297 and $953,462, respectively.

On January 26, 2015, Cyclone closed on the purchase of a single family home located in New Prague, Minnesota for a price of $195,080 and additional holding costs of $2,301, paid in cash. On April 13, 2015, the property was sold to Mr. Krieger, a related party, for a price of $197,382.

Krieger Construction, LLC is owned by an immediate family member of Enterprises and provides general contracting services for our real estate development projects in Cyclone Partners, LLC. A member of Krieger Construction received a salary of $120,000 and expense reimbursements related to land in development of $22,200 during 2015.

19. Goodwill

Goodwill represents the excess of the purchase price of Noble over the fair value of the net identifiable assets acquired. See “Note 6 - Acquisitions” for a calculation of the goodwill related to the Noble acquisition. Goodwill is reviewed for impairment annually or more frequently if impairment indicators arise.

The Company’s estimates of fair value are based on the asset approach. This approach uses the books of Noble to identify the fair value of the assets and liabilities to determine a net value of the company. Our impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes restating assets and liabilities on the balances sheet to fair market value where necessary and identifying unrecorded assets and liabilities and what their impact will be on the balance sheet.

If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a two-step quantitative impairment test is performed. Under the first step, the estimated fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the estimated fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the Company must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

Fair value of the reporting unit under the two-step assessment is determined using a discounted cash flow analysis. The use of present value techniques requires us to make estimates and judgments about our future cash flows. These cash flow forecasts will be based on assumptions that are consistent with the plans and estimates we use to manage our business. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results.

In connection with the qualitative review as of December 31, 2015, we do not believe the carrying value exceeds the fair value. The Company’s goodwill balance as of December 31, 2015 was $1,148,117.

20. Debt

Notes payable by the Company are summarized as follows:

	December 31, 2015			December 31, 2014
Aspirity
Term Debt
Renewable unsecured subordinated notes		24,484,498			17,653,128
Term Loan due from Enterprises		(20,248,186	)		-
Subtotal		4,236,312			17,653,128
Total	$	4,236,312		$	17,653,128

Enterprises
Demand and Revolving Debt
Revolving note payable to Citizens		475,700			-
Revolving note payable to Maple Bank		1,212,705			1,105,259
Subtotal		1,688,405			1,105,259
Term Debt
Auto note payable to Ally Financial		20,097			-
Auto note payable to Ford Credit		24,798			-
Mortgage note payable to Security State Bank		217,450			224,568
Mortgage note payable to Lakeview Bank		119,976			119,976
Construction note payable to American Land & Capital		1,074,673			184,975
Term Loan payable to Aspirity Financial		20,248,186			-
Subtotal		21,705,180			529,519
Total	$	23,393,585		$	1,634,778

Consolidated total	$	27,629,897		$	19,287,906

Notes payable by maturity are summarized as follows:

	December 31, 2015		December 31, 2014
Aspirity
Term Debt
2015	$	-	$	7,234,559
2016		10,120,175		-
Current maturities		10,120,175		7,234,559
2016		-		2,640,682
2017		4,383,980		2,861,547
2018		4,064,364		2,634,750
2019		3,993,573		1,204,600
2020		37,299		9,052
2021 & thereafter		1,885,107		1,067,938
Long term debt		14,364,323		10,418,569
Total	$	24,484,498	$	17,653,128

Enterprises
Demand and Revolving Debt
Demand	$	-	$	-
2016		1,688,405		1,105,259
Subtotal		1,688,405		1,105,259
Term Debt
2015		-		312,068
2016		1,214,762		-
Current maturities		1,214,762		312,068
2016		-		7,468
2017		21,248		7,836
2018		22,973		8,222
2019		12,712		8,627
2020		9,052		185,298
2021 & thereafter		176,247		-
Long term debt		242,232		217,451
Subtotal		1,456,994		529,519
Total	$	3,145,399	$	1,634,778
Consolidated total	$	27,629,897	$	19,287,906

Aspirity

RBC Line of Credit

On May 12, 2014, the Company drew $700,000 under an evergreen, uncommitted line of credit from Royal Bank of Canada (the “RBC Line” and “RBC”, respectively). Advances under the RBC Line bear interest at a variable annual interest rate of 28 month LIBOR plus 2.25% set at the time of advance for a 30 day term, mature at various dates, and are collateralized by assets held in the Company’s marketable securities account. RBC is not obligated to make any extensions of credit to the Company and availability of funds may be increased or decreased by RBC in its sole and absolute discretion. Prepayment of any outstanding principal under the RBC Line may subject the Company to LIBOR break funding costs.

As of December 31, 2015 and 2014, there were no borrowings outstanding under the RBC Line and the Company was in compliance with all terms and conditions.

Renewable Unsecured Subordinated Notes

On May 10, 2012, our first Form S-1 registration statement relating to the offer and sale of our Notes was declared effective by the SEC, and the offering commenced on May 15, 2012. This Old S-1 covered up to $50,000,000 in principal amount of 3 and 6 month and 1, 2, 3, 4, 5, and 10 year notes. On May 8, 2015, we filed a new registration statement with respect to the Notes to continue our Notes Offering under the Old S-1 until the effective date of the New S-1. The new registration replaces the original statement and covers up to $75,000,000 in principal amount of 3 and 6 month and 1, 2, 3, 4, 5, and 10 year notes. The New S-1 was declared effective by the SEC on November 12, 2015.

The Company made interest payments during the years ended December 31, 2015 and 2014 of $2,572,826 and $1,304,701, respectively. Total accrued interest on the Subordinated Notes at December 31, 2015 and 2014 was $1,483,020 and $849,913, respectively.

As of December 31, 2015, the Company had $24,484,498 of Subordinated Notes outstanding as follows:

Initial Term	Principal Amount		Weighted Average Interest Rate
3 months	$	616,558		11.22	%
6 months		114,317		8.62	%
1 year		6,887,269		13.83	%
2 years		3,517,156		13.86	%
3 years		4,245,830		15.05	%
4 years		3,606,359		16.21	%
5 years		3,636,905		15.97	%
10 years		1,860,105		15.11	%
Total	$	24,484,498		14.72	%

Weighted average term		38.3 mos

Enterprises

Aspirity Financial Term Loan

Effective July 1, 2015, Enterprises borrowed an aggregate principal amount of $22,206,113 with a weighted average interest rate of 14.08% and a maturity date of December 30, 2019 from Aspirity Financial. Although the provision was later removed, Enterprises also agreed to reimburse the Company for certain costs incurred as a publicly reporting entity (the “Expected Expenses”). Although eliminated as long as Enterprises and the Company are consolidated, the loan agreement between the parties is constructed on an arm’s length basis, contains customary protective provisions for the lender, including certain guarantees, collateral, and covenants, and ensures that the cash flows generated by the Legacy Businesses continue to be used to pay the interest and principal on the Notes outstanding. On November 1, 2015, the Term Loan was amended with respect to the definition of “actual redemptions” and to provide the lender with monthly financial statements and on January 27, 2016, it was further amended to eliminated the reimbursement of Expected Expenses.

For the period the Term Loan was in effect, Enterprises paid the Company total interest of $1,446,000, principal of $1,958,000, and Expected Expenses of $450,000. These are eliminated in consolidation.

ABN-AMRO Agreements

In February 2012, CEF executed a Futures Risk-Based Margin Finance Agreement (“Margin Agreement”) with ABN AMRO. The Margin Agreement provides CEF with an uncommitted $25,000,000 revolving line of credit on which it pays a commitment fee of $35,000 per month. Any loans outstanding are payable on demand and bear interest at an annual rate equal to 1.00% in excess of the Federal Funds Target Rate, or approximately 1.25%. The Margin Line is secured by all balances in CEF’s trading accounts with ABN AMRO. Under the Margin Agreement, CEF is also subject to certain reporting, affirmative, and negative covenants, including certain financial tests. The Margin Agreement was amended on May 31, 2013 to reduce the uncommitted credit line to $15,000,000, the commitment fee to $25,000 per month, and the covenant with respect to net liquidating equity as defined to $1,500,000.

As of December 31, 2015 and 2014, there were no borrowings outstanding under the Margin Agreement and CEF was in compliance with all covenants.

Maple Bank Revolver

On October 14, 2014, REH, TSE, and DEG entered into a Credit Agreement with the Toronto, Ontario branch of Maple Bank GmbH (the “Maple Agreement” and “Maple Bank”), expiring October 31, 2016. The Maple Agreement provides the Company’s retail energy services businesses with a revolving line of credit of up to $5,000,000 in committed amount secured by a first position security interest in all of the assets, a pledge of the equity of such companies by TCPH, and certain guarantees. Availability of loans is keyed to advance rates against certain eligible receivables as defined. Any loans outstanding bear interest at an annual rate equal to 3 month LIBOR, subject to a floor of 0.50%, plus a margin of 6.00%. In addition, the Company is obligated to pay an annual fee of 1.00% of the committed amount on a monthly basis and a monthly non-use fee of 1.00% of the difference between the committed amount and the average daily principal balance of any outstanding loans. The Company is also subject to certain reporting, affirmative, and negative covenants. On August 4, 2015 the Maple Revolver was amended to increase the committed amount to $7,500,000.

As of December 31, 2015 and 2014, there was $1,212,705 and $1,105,259, respectively outstanding under the Maple Agreement and the Company was in compliance with all covenants.

See “Note 27 - Subsequent Events”.

Citizens Independent Bank

On July 24, 2014, Noble entered into a line of credit agreement with Citizens Independent Bank (“CIB”), expiring August 1, 2015. The agreement provides Noble with a line of credit of up to $500,000 in committed amount secured by property and assets as well as guarantees. Availability of loans is keyed to advance rates against certain eligible receivables as defined. Any loans outstanding bear interest at 1% above the base rate established by CIB. Noble is also subject to certain reporting, affirmative, negative covenants, and must pay down the line to $250,000 for a thirty consecutive day period.

As of December 31, 2015, there was $475,700 outstanding under the agreement and Noble was in negotiations with respect to the terms of the line.

On January 22, 2016, Noble entered into a new loan agreement maturity date of September 22, 2016. The agreement provides Noble with a line of credit of up to $1,500,000 secured by property and assets as well as guarantees. Advances on the note are calculated by certain eligible receivables and inventory as defined and bear interest at 1%, with a floor of 5%, above the base rate as established by CIB. Noble is also subject to certain reporting, affirmative, and negative covenants.

US Bank Cash Flow Manager

On October 21, 2013, Noble, entered into a line of credit agreement with US Bank Cash Flow Manager, with all advances maturing on February 19, 2020. The agreement provides Noble with a line of credit of up to $250,000 in committed amount secured by personal guarantees of the owners of Noble. Any loans outstanding bear interest at an annual rate equal to prime plus 4.5%. As of December 31, 2015, there were no borrowings under the agreement.

Ford Credit

On June 13, 2014, Noble entered into a loan agreement with Ford Credit for the purchase of a vehicle. The note calls for monthly payments of $664, bears interest at 6.74% and is secured by the vehicle. As of December 31, 2015, the balance remaining on the note was $24,798.

Ally Financial

On December 26, 2012, Noble entered in a loan agreement with Ally Financial for the purchase of a vehicle. The note calls for seventy-two monthly payments of $587.65, bears interest at 4.99%, and is secured by the vehicle. As of December 31, 2015, the balance remaining on the note was $20,097.

Security State Mortgage

On June 16, 2014, the Company purchased a single family home in Garrison, Minnesota for use as a corporate retreat (the “Garrison Property”) for a purchase price of $285,000, paid with $57,000 of cash and the proceeds of a $228,000 note (the “Security State Mortgage”) advanced by the Security State Bank of Aitkin (“Security State Bank”) and secured by a first mortgage. The loan is payable in 239 equal installments of $1,482 due on the 16^th of each month beginning on July 16, 2014 and one irregular installment of $1,482 due on June 16, 2034 (the “maturity date”). The note bears interest at an annual rate equal to the prime rate as published from time to time by The Wall Street Journal plus 0.75%, subject to a floor of 4.75%. Whenever increases occur in the interest rate, Security State, at its option and with notice to the Company, may: (a) increase the Company’s payments to insure the loan will be paid off by the maturity date; (b) increase the Company’s payments to cover accruing interest; (c) increase the number of the Company’s payments; or (d) continue the payments at the same amount and increase the Company’s final payment. The loan may be prepaid in whole or in part at any time without penalty.

As of December 31, 2015 and 2014, there was $217,450 and $219,262, respectively, outstanding under the Security State Mortgage and the Company was in compliance with all terms and conditions of the loan.

Lakeview Bank Mortgage

On December 23, 2014, via an assignment and assumption agreement between Cyclone and Kenyon Holdings, LLC (“Kenyon”), a related party, Cyclone took ownership of a 10 acre parcel of undeveloped land located at 170xx Texas Avenue, Credit River Township, Minnesota and assumed a note secured by a mortgage on the property and owed to Lakeview Bank (the “Lakeview Bank Mortgage”). Kenyon is owned by Mr. Krieger and Keith W. Sperbeck, Enterprises’ Vice President of Operations. The Lakeview Bank Mortgage bears interest at the highest prime rate reported as such from time to time by The Wall Street Journal. Interest only is payable monthly on the 25^th and the note matures on April 30, 2016. The loan may be prepaid in whole or in part at any time without penalty.

As of December 31, 2015 and 2014, there was $119,976 outstanding under the Lakeview Bank Mortgage and the Company was in compliance with all terms and conditions of the loan.

American Land and Capital Construction Loans

On November 21, 2014, American Land and Capital, LLC (“American Land”) and Cyclone entered into four construction loan agreements, each for a committed amount of $205,000 or $820,000 in total (the “Fox Meadows Construction Loans”). Each commitment is secured by a mortgage on a lot (numbers 1, 2, 3, and 4) in Block 28 of Fox Meadows 3rd Addition and is personally guaranteed by Mr. Krieger. Fox Meadows is a townhouse development located in Lakeville, Minnesota in which Cyclone owns 35 attached residential building sites. Proceeds of the Construction Loans will be used to construct the first four spec/model homes on Cyclone’s Fox Meadows property. Draws on the Construction Loans bear interest at the higher of: (a) 6.50% or (b) the prime rate as reported from time to time by The Wall Street Journal plus 3.00%. Interest only is payable monthly on the 10^th, the notes mature on May 21, 2016, and will renew for an additional three months if not paid by then. The loans may be prepaid in whole or in part at any time without penalty.

On February 24, 2015, American Land and Cyclone entered into a construction loan agreement for a committed amount of $485,000 (the “Bitterbush Pass Construction Loan”). The Bitterbush Pass Construction Loan is secured by a mortgage on Lot 2, Block 1, Territory 1^stAddition, also referred to as “21580 Bitterbush Pass”. The loan is also personally guaranteed by Mr. Krieger. Proceeds will be used to construct a home on the property and draws bear interest at the higher of: (a) 6.50% or (b) the prime rate as reported from time to time by The Wall Street Journal plus 3.00%. Interest only is payable monthly on the 10^thand the note matures on May 24, 2016. The loan may be prepaid in whole or in part at any time without penalty.

As of December 31, 2015 and 2014, there was $1,074,672 and $184,975, respectively outstanding under the American Land Construction Loans and the Company was in compliance with all terms and conditions of the agreements.

21. Leases

The Company leases vehicles and office equipment under several agreements that expire between 2015 and 2020 as well as its office space, key terms of the leases for which are summarized below.

Location	Expiration Date	Square Footage		Monthly Rent
Aspirity
Minneapolis, Minnesota	5/31/2019		8,003	$	10,671
Enterprises
Cherry Hill, New Jersey	12/31/2016		175	$	400
Newtown, Pennsylvania	12/31/2017		1,711		2,250
Plymouth, Minnesota	1/31/2018		6,091		3,943
Lakeville, Minnesota (1)	12/31/2019		8,543		8,591
Lakeville, Minnesota	5/31/2020		2,231		2,975
Chandler, Arizona (1)	6/30/2020		6,033		4,982
Subtotal			24,784		23,141
Total			32,787	$	33,812

1 See “Note 24 - Related Party Transactions”.

For the years ended December 31, 2015 and 2014, total lease expense was $493,880 ($425,316 for Enterprises and $68,564 for Aspirity) and $443,193, respectively.

Future minimum lease payments under the Company’s lease agreements are as follows:

Years Ended December 31,	Aspirity		Enterprises		Total
2016	$	128,000	$	308,000	$	436,000
2017		53,000		300,000		353,000
2018		-		223,000		223,000
2019		-		220,000		220,000
2020		-		15,000		15,000
Total	$	181,000	$	1,066,000	$	1,247,000

22. Defined Contribution 401(k) Savings Plans

Aspirity

All eligible employees may participate in the Company’s Safe Harbor and Roth 401(k) Plans. Investments in the Safe Harbor 401(k) are 100% tax deductible and grow on a tax-deferred basis. The Company may match 100% of salary deferrals up to 3% of compensation, plus 50% of salary deferrals in excess of 3% of compensation, up to 5%. Investments in the Roth 401(k) plan are after-tax contributions and the Company does not match salary deferrals up to the contribution limits for a particular year. During 2015, the Company made no contributions to the Safe Harbor 401(k).

Enterprises

Substantially all employees are eligible to participate in the Company’s 401(k) Savings Plan (the “Savings Plan”). Employees may make pre-tax voluntary contributions to their individual accounts up to a maximum of 50% of their aggregate compensation, but not more than currently allowable Internal Revenue Service limitations. Employee participants in the Savings Plan may allocate their account balances among 14 different funds available through a third party custodian. The Savings Plan does not require the Company to match employee contributions, but does permit the Company to make discretionary contributions. No discretionary contributions have been made.

23. Ownership

Effective on November 1, 2015, upon the distribution of the equity interests of Enterprises and the adoption of its new Operating Agreement, the Company agreed to issue 6,064 new Class B common units, automatically convertible into Class A units, effective upon FERC approval of the change of control of the Company. Such approval was granted on March 18, 2016. See “Note 27 - Subsequent Events”.

The ownership of the Company’s equity as of December 31, 2015 and 2014; as well as March 30, 2016 is as presented below:

	Non-Voting Units					Voting Units
Holder	Series A Preferred Units		Pct of Class			Class A Common Units		Pct of Voting Rights
At March 30, 2016 (unaudited)
Timothy S. Krieger		496		100.00	%		4,935		44.80	%
Summer Enterprises, LLC		-		0.00	%		25		0.20	%
Subtotal		496		100.00	%		4,960		45.00	%
Mark A. Cohn		-		0.00	%		1,654		15.00	%
Wiley H. Sharp III		-		0.00	%		1,654		15.00	%
Keith W. Sperbeck		-		0.00	%		1,103		10.00	%
Brandon J. Day		-		0.00	%		551		5.00	%
Scott C. Lutz (1)		-		0.00	%		551		5.00	%
Jeremy E. Schupp (1)		-		0.00	%		551		5.00	%
Subtotal		-		0.00	%		6,064		55.00	%
Total		496		100.00	%		11,024		100.00	%

At December 31, 2015
Timothy S. Krieger		496		100.00	%		4,935		99.50	%
Summer Enterprises, LLC		-		0.00	%		25		0.50	%
Total		496		100.00	%		4,960		100.00	%

At December 31, 2014
Timothy S. Krieger		496		100.00	%		4,935		99.50	%
Summer Enterprises, LLC		-		0.00	%		25		0.50	%
Total		496		100.00	%		4,960		100.00	%

1	The units held by Mr. Lutz and Mr. Schupp are subject to forfeiture should they leave the employment of the Company and upon payment by the Company of $1.00 per unit as follows: after April 1, 2016 but before March 31, 2017, 367 units and after April 1, 2017 but before March 31, 2018, 183 units.

For the years ending December 31, 2015 and 2014, total preferred distributions paid to the owner of the units were $549,072 and $549,072, respectively.

For the years ending December 31, 2015 and 2014, total common distributions paid to the owners of the units were $5,950,000 and $4,726,730, respectively.

24. Related Party Transactions

Note that as indicated, the Company’s obligations as described below were all assumed by Enterprises, effective July 1, 2015.

On January 1, 2013, Enterprises and Kenyon entered into a five year lease expiring December 31, 2017 for 11,910 square feet at a monthly rent of $12,264. On September 25, 2014, the lease was amended to reduce the square footage to 10,730 and monthly rent to $11,113. The lease was amended again on May 19, 2015, effective June 1, 2015, to reduce the square footage to 8,543 square feet and increase the monthly rent to $8,598. For rent, real estate taxes, and operating expenses, Enterprises paid Kenyon $205,409 and $235,000 for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, Enterprises owed Kenyon $20,000.

Tim Krieger, owner and Chief Executive officer of Enterprises is owed $47,000 at December 31, 2015 as a reimbursement for real estate development expenses.

Effective January 1, 2013, in connection with the purchase of David B. Johnson’s units by Mr. Krieger, the Company entered into a non-competition agreement with Mr. Johnson, a current director and former member of the Company, pursuant to which the Company is obligated to pay Mr. Johnson $500,000 in 24 equal monthly installments of $20,833 each. The total amount paid pursuant to the agreement during the year ended December 31, 2014 $250,000. There were no payments during 2015 as the non-compete agreement was paid in full on December 31, 2014.

On March 5, 2013, CEF entered into a 36 month lease for 1,800 square feet of office space in Tulsa, Oklahoma with the Brandon J. and Heather N. Day Revocable Trust at a monthly rent of $3,750. Mr. Day is an employee of CEF, a second-tier subsidiary of Enterprises. Total rent paid for the year ended December 31, 2015 and 2014 was $45,000. The lease was terminated on December 31, 2015.

On March, 20 2014, in connection with the Company’s initial investment of $1.0 million in Ultra Green’s convertible notes, Ultra Green paid a 10% commission to Cedar Point Capital, LLC, a registered broker dealer (“Cedar Point”). Mr. Johnson, a director of the Company, is the sole owner of Cedar Point. No commissions were paid on the Company’s follow-on investments.

On June 17, 2014, the building in which Enterprises leases its Chandler, Arizona office space was purchased by Fulton Marketplace, LLC (“Fulton”), a company owned by Mr. Krieger and Mr. Sperbeck. Effective August 1, 2014, Enterprises and Fulton entered into a five year lease expiring July 31, 2019, subject to two consecutive five year extension periods, for 2,712 square feet. The rent for the first lease year is $4,068 per month and it will increase by 3% annually at the start of each lease year thereafter. On June 30, 2015 Enterprises discontinued the lease as the office was relocated to a new location. Thus, effective July 1, 2015, Enterprises entered into a new five year lease with Fulton for a 3,321 square foot office space with a monthly base rent of $4,982 that will increase by 3% annually at the start of each lease year thereafter. Enterprises paid $69,700 and $26,700 to Fulton for the years ended December 31, 2015 and 2014, respectively for rent, real estate taxes, and operating expenses.

Fulton is the owner of a single family residence located in Chandler, Arizona. Effective December 1, 2014, Fulton and REH entered into a seven month lease expiring June 30, 2015. Total rent paid to Fulton during 2015 was $17,136.

On December 23, 2014, via an assignment and assumption agreement between Cyclone and Kenyon, Cyclone took ownership of a 10-acre parcel of undeveloped land located at 170xx Texas Avenue, Credit River Township, Minnesota and assumed a note secured by a mortgage on the property and owed to Lakeview Bank. The total acquisition cost paid to Kenyon was $52,000 and represented Kenyon’s total expenditures on the property (interest, closing fees, and property taxes) since its acquisition in 2013.

The Company and Enterprises are related parties due to ownership by Mr. Krieger. Mr. Krieger owns 100% of the Company’s Series A Preferred Units, controls 100% of its Class A Common Units, and controls 100% of the Common Units of Enterprises.

Effective July 1, 2015, Enterprises borrowed an aggregate principal amount of $22,206,113 with a weighted average interest rate of 14.08% and a maturity date of December 30, 2019 from Aspirity Financial. Although the provision was later removed, Enterprises also agreed to reimburse the Company for certain costs incurred as a publicly reporting entity (the “Expected Expenses”). Although initially an intercompany relationship and eliminated in consolidation, the loan agreement between the parties is constructed on an arm’s length basis, contains customary protective provisions for the lender, including certain guarantees, collateral, and covenants, and ensures that the cash flows generated by the Legacy Businesses continue to be used to pay the interest and principal on the Notes outstanding as of June 30, 2015. On November 1, 2015, the Term Loan was amended with respect to the definition of “actual redemptions” and to provide the lender with monthly financial statements and on January 27, 2016, it was further amended to eliminated the reimbursement of Expected Expenses. For the year ended December 31, 2015, Enterprises paid the Company total interest of $1,446,000, principal of $1,958,000, and Expected Expenses of $450,000, these amounts are eliminated in consolidation.

On September 1, 2015, CTG entered into a five-year lease agreement with Kenyon for 2,231 square feet of office space for a monthly rent of $2,975. For the year ended December 31, 2015, $18,565 of rent was paid to Kenyon.

25. Commitments and Contingencies

FERC Settlement

On October 12, 2011, FERC initiated a formal non-public investigation into TCE’s power scheduling and trading activity in MISO for the period from January 1, 2010 through May 31, 2011 (the “Investigation”). The Investigation addressed trading activity by former employees of TCPC whose employment contracts were terminated by TCPC on February 1, 2011 in connection with the Company’s reorganization of its Canadian operations. TCE and TCPC have no employees and do not conduct any operations.

On June 12, 2014, FERC issued a Notice of Alleged Violations (“NAV”) indicating that the staff of its Office of Enforcement had preliminarily determined that during the period from January 1, 2010 through January 31, 2011, TCPC and certain affiliated companies, including TCE and TCP, and individuals Allan Cho, Jason F. Vaccaro, and Gaurav Sharma, each violated the FERC’s prohibition on electric energy market manipulation by scheduling and trading physical power in MISO to benefit related swap positions that settled based on real-time MISO prices.

On November 14, 2014, settlement was agreed to regarding the Investigation and the NAV. The settlement required the payment of $978,186 plus interest of $128,827 as disgorgement of profits ($1,107,013) and $2,500,000 as a civil penalty, for a total of $3,607,013, with the disgorgement to be paid to MISO and the penalty to the U.S. Treasury. During the third quarter of 2014, the disgorgement was recorded as a reduction of revenue and the penalty was expensed to operations. The Company booked the settlement as a liability of TCP as TCE and TCPC no longer had any operations.

On December 30, 2014, FERC formally accepted the settlement. The first installment of $500,000 was paid on December 31, 2014 to MISO with the remaining $3,107,000 to be paid in 16 equal quarterly installments of $194,000 each, beginning April 1, 2015, first to MISO the disgorgement is fully paid, and thereafter to the Treasury in satisfaction of the penalty.

On June 1, 2015, the financial obligations under the settlement agreement were transferred to Angell in connection with its purchase of TCP.

As part of the settlement, the Company further agreed to implement certain procedures to improve compliance. Failure to comply with the terms and conditions will be deemed a violation of the final order and may subject the Company to additional action.

Former Employee Litigation

On February 1, 2011, the Company commenced a major restructuring of the operations of TCPC and all personnel were terminated, although several were subsequently re-hired. During the course of 2011, three former employees of TCPC commenced legal proceedings and brought separate summary judgment applications seeking damages aggregating C$3,367,000 for wrongful dismissal and payment of performance bonuses. The Company filed a counterclaim for C$3,096,000 against one of the former employees for losses suffered, inappropriate expenses, and related matters. Two of the three summary judgment applications were dismissed on January 12, 2012. All three summary judgment applications were appealed and were heard on July 4, 5, and 6, 2012 by the Alberta Court of Queen’s Bench. On July 6, 2012, the court dismissed two of the three applications and allowed the third, awarding summary judgment against TCPC for a portion of the claim amounting to C$1,376,726. This third matter will hereinafter be referred to as the “TCPC judgment action” An application to set aside the judgment in the TCPC judgment action has been filed.

In 2013, the former employees brought applications to amend their pleadings to include as additional defendants certain TCPC U.S. affiliates (“Twin Cities USA”). One of the former employees proceeded with the application and the others were adjourned. The application that proceeded went forward on April 29 and 30, 2013. In a decision dated January 31, 2014, the Court of Queen’s Bench dismissed the applications to add additional defendants but allowed certain refinements to the pleadings. Thereafter the Company and TCPC consented to an amendment of pleadings of the other employees consistent with the Court’s ruling.

In addition, on January 31, 2014 within the “TCPC judgment action” the Court of Queen’s Bench ordered Twin Cities USA to post security for costs in the sum of C$75,000 together with security for judgment in the sum of C$1,376,726. In order to preserve its claims and counterclaims against the former employees in the TCPC judgment action, Twin Cities USA posted security for the judgment and costs and continues to maintain that security pending further order or direction from the Court of Queen’s Bench.

Twin Cities USA and TCPC intend to continue to vigorously defend against the allegations and claims of the former employees and have filed counterclaims or amended counterclaims for losses suffered and costs incurred in responding to the FERC investigation, inappropriate expenses, and related matters.

Further, on April 24, 2015, the Company commenced a new action against a former employee of TCPC, Guarav Sharma, claiming amounts owing in relation to the FERC settlement arising from his conduct as an employee. It is hoped this action will be consolidated with the other former employee litigation.

In all former employee litigation, the parties are continuing with discovery. A case management justice has been appointed to assist in scheduling and with any required motions. A trial date has been set for April 2017.

Due to the uncertainty surrounding the outcome of the litigation, including that of its counterclaims against the former employees, the Company is presently unable to determine a range of reasonably possible outcomes.

PJM Resettlements

On May 11, 2012, FERC issued an order denying rehearing motions in regards to PJM resettlement fees confirming its intent to reverse refunds it had granted to a number of market participants in a 2009 order. These refunds were related to transmission line loss refunds issued to the Company by PJM for prior periods. Pursuant to the order, the Company was required to return $782,000 to PJM which amount was paid in full in July 2012.

On July 9, 2012, several parties filed a petition for review of the May 11, 2012 FERC order with the District of Columbia Circuit of the U.S. Court of Appeals and certain subsidiaries of Enterprises filed motions to intervene in the proceeding. In an order issued August 6, 2013, the Court remanded to FERC for further consideration the issue of recoupment of refunds that had previously been directed by FERC. The Court found that FERC’s orders failed to explain why refund recoupment was warranted and therefore its recoupment directive was found to be arbitrary and capricious.

On February 20, 2014, the FERC issued an order establishing a briefing schedule allowing parties to the proceeding to provide briefs on whether or not the recoupment orders should be reconsidered. Although briefing on all issues relevant to the remand was invited by FERC, it also presented five specific questions, primarily relating to the effect of the recoupment orders, for the parties to address. Initial briefs were due on April 7, 2014.

On November 19, 2015, the FERC affirmed its prior order. Management believes that liability for such charges, if any, associated with TCP and SUM’s trading activity was assumed by Angell in conjunction with the purchase of the equity interests of such entities.

PJM Up-To Congestion Fees

On August 29, 2014, FERC initiated a proceeding under Section 206 of the Federal Power Act, as amended, described in Docket No. EL14-37-000 regarding how PJM treats up-to-congestion (“UTC”) transactions in the market (the “§206 proceeding”). The purpose of the proceeding is for FERC to examine how uplift is, or should be, allocated to all virtual transactions within the PJM market. The Company is an active trader of these UTCs.

Currently, under PJM’s Tariff and Operating Agreement, UTCs are treated differently under its FTR forfeiture rule than are INCs and DECs, two other types of virtual transactions. Further, INCs and DECs are subject to uplift charges, but UTCs are not. In Docket No EL14-37-000, FERC noted that should any uplift be charged UTCs, it would apply such back to the date that notice of the proceeding was published in the Federal Register (September 8, 2014), thus setting a “refund effective date”. From the refund effective date to December 31, 2015, the Company traded about 9,000,000 MWh of UTCs in PJM and recorded $13,300,000 of associated revenues. Over 68% of this activity was transacted by TCP and SUM.

Although the Company’s UTC trading activity exposes it to potential uplift charges, none have been billed as the proceeding is still ongoing. Further, Enterprises has not established any reserves for such as management is uncertain as to the probability, amount, and timing of the actual payment, if any, that might be due. Finally, management believes that liability for such charges, if any, associated with TCP and SUM’s trading activity was assumed by Angell in conjunction with the purchase of the equity interests of such entities.

Letter of Credit

In connection with the Restructuring, Enterprises assumed the letter of credit as described below.

On June 24, 2014, the Company’s restricted cash balance of $320,188 was returned by the City of Lakeville and a letter of credit in favor of Cyclone was issued by Vermillion State Bank for the same amount. The note evidencing the letter of credit calls for maximum advances of up to $320,188, bears interest at an annual rate of 5.25%, is secured by a mortgage on the property being developed and the guaranty of Cyclone, and matures on demand. In October 2015, the note was renewed for another year, the letter of credit maximum advance dropped to $257,718, with all other terms remaining the same.

As of December 31, 2015, the Company was in compliance with all terms and conditions of the letter of credit.

Guarantees

In the ordinary course, the Company provided guarantees of the obligations of TCP, SUM, and CEF with respect to their participation in certain ISOs. During 2015, many of these guarantees were cancelled.

On April 13, 2015, the Company pledged additional collateral of $700,000 to PJM and consequently cancelled its guarantees for the benefit of PJM with respect to TCP and SUM effective April 30, 2015.

On May 13, 2015, the Company gave notice to ERCOT and NYISO of the cancellation of its guarantees of TCP’s obligations, and a concurrent pledge of $500,000 of additional collateral to NYISO. On May 14, 2015, NYISO accepted the collateral and the cancellation of the Company’s obligation. On June 9, 2015, ERCOT accepted the cancellation of the Company’s obligation.

On June 17, 2015, REH entered into two separate guaranties of the obligations of TSE and TSEE of up to $1,000,000 in favor of BP Energy Company (“BP”). The guarantees remain effective until the earlier of June 17, 2020 or ten days after REH gives notice of cancellation to BP. Guarantor guarantees the timely payment when due of the obligations of the guaranteed party. If the guaranteed party shall fail to pay any obligation, guarantor shall promptly pay to the counterparty the amount due.

On July 6, 2015, the effective date, the Company gave notice to MISO of the cancellation of its guarantees of TCP, CEF, and SUM’s obligations.

In the ordinary course, the Company provided guarantees of the obligations of REH and its subsidiaries with respect to purchases of power from certain wholesale suppliers.

On August 12, 2013, the Company entered into a guaranty of the obligations of TSE of up to $1,000,000 (plus any costs of collection or enforcement) in favor of Noble Americas Energy Solutions LLC (“NEAS”). The Company may cancel the guarantee upon 30 days’ written notice to NEAS.

On April 25, 2014, the Company entered into a guaranty of the obligations of TSEE of up to $1,000,000 (plus any costs of collection or enforcement) in favor of NEAS. The Company may cancel the guarantee upon 30 days’ written notice to NEAS.

On November 5, 2014, the Company entered into two separate guaranties of the obligations of TSE and TSEE of up to $500,000 (plus any costs of enforcement or collection) in favor of Shell Energy North America L.P. (“Shell”). The guarantee is in effect until the earlier of November 5, 2019 or ten days’ after the Company gives notice to Shell of its cancellation.

Legal fees, if any, related to commitments and contingencies are expensed as incurred.

26. Segment Information

In 2015, as a result of the Restructuring and the distribution of Enterprises, the Company currently has limited operations and assets, but has established two segments used to measure business activity – retail energy services and financial services:

●	By the end of 2016, the Company’s goal is to be able to market electricity to approximately 38 million residential customers located in 50 service areas in the 14 jurisdictions that allow all retail customers of investor-owned utilities to choose who supplies them with electricity.

●	Until the retail energy business has gained scale, the Company’s primary sources of cash flow will be Note sales and loan payments received from Enterprises, our first financial services customer.

Enterprises has three segments used to measure its business activity – wholesale trading, retail energy services, and diversified investments:

●	Wholesale trading activities earn profits from trading financial, physical, and derivative electricity in wholesale markets regulated by the FERC and the CFTC. On June 1, 2015, the Company sold two subsidiaries operating within this segment. See “Note 1 - Basis of Presentation and Description of Business – Businesses – The Restructuring”, “Note 2 – Summary of Significant Accounting Policies – Variable Interest Entities”, and “Note 13 – Notes Receivable”.

●	On July 1, 2012, Enterprise began selling electricity to residential and small commercial customers.

●	On October 23, 2013, the Company formed a new entity to take advantage of certain investment opportunities in the residential real estate market and in 2014, it made certain investments in the securities of emerging companies. On June 1, 2015, the Company began selling management and administrative services and licensing software to third parties. In September 2015, the Company acquired Noble and began offering construction services.

Trading profits and sales are classified as “foreign” or “domestic” based on the location where the trade or sale originated. For the years ended December 31, 2015 and 2014, all such transactions were “domestic”. Furthermore, the Company has no long-lived assets in foreign jurisdictions.

Though these segments are managed separately because they operate under different regulatory structures and are dependent upon different revenue models, the chief operating decision maker reviews monthly financial statements of the reporting segment or operating segment. The performance of each is evaluated based on the operating income or loss generated.

Certain amounts reported in prior periods have been reclassified to conform to the current period’s presentation as a result of the restructuring.

Information on segments for the year ended December 31, 2015 is as follows:

	Aspirity					Enterprises
	Financial Services		Retail Energy Services			Wholesale Trading		Retail Energy Services			Diversified Investments			Corporate, Net of Eliminations			Consolidated Total

Year Ended December 31, 2015
Wholesale trading	$	-	$	-		$	14,667,197	$	(373,722	)	$	-		$	-		$	14,293,475
Retail energy services		-		-			-		30,482,812			-			-			30,482,812
Financial services		2,877,149		-			-		-			-			(2,877,149	)		-
Real estate sales		-		-			-		-			351,725			-			351,725
Management services		-		-			-		-			-			710,000			710,000
Construction services		-		-			-		-			2,285,998			-			2,285,998
Revenues, net		2,877,149		-			14,667,197		30,109,090			2,637,723			(2,167,149	)		48,124,010
Costs of sales and services		-		-			-		26,663,003			2,023,217			-			28,686,220
Retail sales and marketing		-		7,000			-		1,325,721			20,500			-			1,353,221
Compensation and benefits		-		-			9,206,059		885,026			512,048			2,864,798			13,467,931
Professional fees		-		6,160			45,449		994,393			41,903			1,375,455			2,463,360
Other general and administrative		-		4,381			198,721		1,326,506			143,320			3,553,074			5,226,002
Trading tools and subscriptions		-		-			843,362		415,608			9,745			23,947			1,292,662
Operating costs and expenses		-		17,541			10,293,591		31,610,257			2,750,733			7,817,273			52,489,395
Operating income (loss)	$	2,877,149	$	(17,541	)	$	4,373,606	$	(1,501,167	)	$	(113,010	)	$	(9,984,422	)	$	(4,365,385	)
Capital expenditures	$	-	$	-		$	1,377	$	72,027		$	795,779		$	101,658		$	970,841

At December 31, 2015
Identifiable Assets
Cash - unrestricted	$	-	$	100,965		$	771,746	$	652,670		$	44,232		$	761,788		$	2,331,401
Cash in trading accounts		-		-			6,247,059		1,800,272			-			-			8,047,331
Collateral deposits		-		63,500			-		182,500			-			-			246,000
Accounts receivable - trade		258,569		-			276,017		3,558,316			1,548,088			247,194			5,888,184
Note recevable, net of deferred gain		-		-			-		-			-			795,995			795,995
Prepaid expenses and other assets		-		12,293			45,547		273,629			281,986			219,906			833,361
Total current assets		258,569		176,758			7,340,369		6,467,387			1,874,306			2,024,883			18,142,272
Property, equipment and furniture, net		-		-			122,480		129,453			397,818			698,560			1,348,311
Intangible assets, net		-		-			-					852,669			-			852,669
Deferred financing costs, net		-		-			-		13,854			-			300,171			314,025
Cash - restricted		-		-			-		-			-			1,319,371			1,319,371
Real estate held for development		-		-			-		-			2,714,297			-			2,714,297
Note recevable, net of deferred gain		-		-			-		-			323,342			2,263,274			2,586,616
Investment in convertible notes		-		-			-		-			502,110			-			502,110
Term loan		20,248,186		-			-		-			-			(20,248,186	)		-
Goodwill and other assets		-		-			-		-			1,219,583			-			1,219,583
Total assets	$	20,506,755	$	176,758		$	7,462,849	$	6,610,694		$	7,884,125		$	(13,641,928	)	$	28,999,254

Identifiable Liabilities and Equity
Accounts payable - trade	$	269,312	$	2,925		$	144,915	$	2,457,144		$	908,301		$	594,387		$	4,376,984
Accrued expenses		-		-			-		2,090,226			3,117			11,996			2,105,339
Accrued compensation		-		-			524,579		-			27,876			170,900			723,355
Accrued interest		-		-			-		19,741			1,058			1,483,020			1,503,819
Billings in excess of costs and estimated
earnings on uncompleted contracts		-		-			-		-			710,827			-			710,827
Revolver		-		-			-		1,212,705			475,700			-			1,688,405
Senior notes		-		-			-		-			1,207,295			7,467			1,214,762
Renewable unsecured subordinated notes		-		-			-		-						10,120,175			10,120,175
Total current liabilities		269,312		2,925			669,494		5,779,816			3,334,174			12,387,945			22,443,666
Senior notes		-		-			-		-			32,248			209,984			242,232
Renewable unsecured subordinated notes		-		-			-		-			-			14,364,323			14,364,323
Total long term liabilities		-		-			-		-			32,248			14,574,307			14,606,555
Total liabilities		269,312		2,925			669,494		5,779,816			3,366,422			26,962,252			37,050,221
Intercompany investment		20,237,443		191,374			2,778,158		9,944,597			3,120,651			(36,272,223	)		-
Series A preferred equity		-		-			-		-			-			2,745,000			2,745,000
Common equity (restated)		-		(17,541	)		3,898,567		(9,050,862	)		(563,393	)		(1,766,351	)		(7,499,580	)
AOCI		-		-			116,630		(62,857	)		-			(53,773	)		-
Total members’ equity (deficit) (restated)		20,237,443		173,833			6,793,355		830,878			2,557,258			(35,347,347	)		(4,754,580	)
Noncontrolling interest (restated)		-		-			-		-			1,960,445			(5,915,604	)		(3,955,159	)
AOCI attributed to NCI		-		-			-		-			-			658,772			658,772
Total equity (deficit)		20,237,443		173,833			6,793,355		830,878			4,517,703			(40,604,180	)		(8,050,968	)
Total liabilities and equity	$	20,506,755	$	176,758		$	7,462,849	$	6,610,694		$	7,884,125		$	(13,641,928	)	$	28,999,254

Information on segments for the year ended December 31, 2014 is as follows:

	Aspirity				Enterprises
	Financial Services		Retail Energy Services		Wholesale Trading		Retail Energy Services			Diversified Investments			Corporate, Net of Eliminations			Consolidated Total
Year Ended December 31, 2014
Wholesale trading	$	-	$	-	$	36,894,702	$	1,717,242		$	-		$	-		$	38,611,944
Retail energy services		-		-		-		11,229,476			-			-			11,229,476
Financial services		1,295,975		-		-		-			-			(1,295,975	)		-
Revenues, net.		1,295,975		-		36,894,702		12,946,718			-			(1,295,975	)		49,841,420
Costs of sales and services		-		-		-		11,440,672			-			-			11,440,672
Retail sales and marketing		-		-		-		324,948			-			-			324,948
Compensation and benefits		-		-		19,196,234		391,931			-			2,134,154			21,722,319
Professional fees		-		-		686,643		876,488			2,200			921,725			2,487,056
Other general and administrative		-		-		7,720,546		1,314,991			108,938			(3,050,632	)		6,093,843
Trading tools and subscriptions		-		-		902,364		386,349			2,765			41,326			1,332,804
Operating costs and expenses		-		-		28,505,787		14,735,379			113,903			46,573			43,401,642
Operating income (loss)	$	1,295,975	$	-	$	8,388,915	$	(1,788,661	)	$	(113,903	)	$	(1,342,548	)	$	6,439,778
Capital expenditures	$	-	$	-	$	15,773	$	738,615		$	185,529		$	127,388		$	1,067,305

At December 31, 2014
Identifiable Assets
Cash - unrestricted	$	-	$	-	$	1,296,294	$	288,436		$	5,925		$	806,645		$	2,397,300
Cash in trading accounts		-		-		19,642,215		1,457,437			-			-			21,099,652
Marketable securities		-		-		-		-			-			311,586			311,586
Accounts receivable - trade		-		-		501,182		1,878,247			-			14,817			2,394,246
Note recevable, net of deferred gain		-		-		-		-			-			-			-
Prepaid expenses and other assets		-		-		127,209		47,043			30,943			211,224			416,419
Total current assets		-		-		21,566,900		3,671,163			36,868			1,344,272			26,619,203
Property, equipment and furniture, net		-		-		80,048		99,068			1,000			582,413			762,529
Intangible assets, net		-		-		-		269,149			-			-			269,149
Deferred financing costs, net		-		-		-		31,354			-			210,390			241,744
Cash - restricted		-		-		1,319,371		-			-			-			1,319,371
Real estate held for development		-		-		-		-			953,462			-			953,462
Investment in convertible notes		-		-		-		-			1,604,879			-			1,604,879
Term loan		17,653,128		-		-		-			-			(17,653,128	)		-
Total assets	$	17,653,128	$	-	$	22,966,319	$	4,070,734		$	2,596,209		$	(15,516,053	)	$	31,770,337

Identifiable Liabilities and Equity
Accounts payable - trade	$	-	$	-	$	369,840	$	803,124		$	25,215		$	345,924		$	1,544,103
Accrued expenses		-		-		-		678,456			-			3,539			681,995
Accrued compensation		-		-		3,601,282		-			-			-			3,601,282
Accrued interest		-		-		-		-			-			849,913			849,913
Obligations under settlement agreement		-		-		582,565		-			-			-			582,565
Revolver		-		-		-		1,105,259			-			-			1,105,259
Senior notes		-		-		-		-			304,952			7,116			312,068
Renewable unsecured subordinated notes		-		-		-		-			-			7,234,559			7,234,559
Total current liabilities		-		-		4,553,687		2,586,839			330,167			8,441,051			15,911,744
Senior notes		-		-		-		-			-			217,451			217,451
Renewable unsecured subordinated notes		-		-		-		-			-			10,418,569			10,418,569
Obligations under settlement agreement		-				2,524,448		-			-			-			2,524,448
Total long term liabilities		-		-		2,524,448		-			-			10,636,020			13,160,468
Total liabilities.		-		-		7,078,135		2,586,839			330,167			19,077,071			29,072,212
Intercompany investment		17,653,128		-		7,835,842		7,527,746			2,489,529			(35,506,245	)		-
Series A preferred equity		-		-		-		-			-			2,745,000			2,745,000
Common equity		-		-		7,053,301		(5,180,443	)		(223,487	)		(1,842,995	)		(193,624	)
Accumulated other comprehensive income		-		-		999,041		(863,408	)		-			11,116			146,749
Total members’ equity (deficit)		17,653,128		-		15,888,184		1,483,895			2,266,042			(34,593,124	)		2,698,125
Total liabilities and equity	$	17,653,128	$	-	$	22,966,319	$	4,070,734		$	2,596,209		$	(15,516,053	)	$	31,770,337

27. Subsequent Events

From January 28 to May 20, 2015, the Company sold Subordinated Notes totaling $1,944,000 with a weighted average term of 46.3 months and bearing a weighted average interest rate of 13.0%.

On December 21, 2015, ABN AMRO notified CEF that they were terminating the Margin Agreement and the related trading accounts, effective January 12, 2016 and February 12, 2016, respectively. On January 15, 2016, CEF entered into a customer and credit agreement with ED & F Man Client Services, Inc. (“ED&F”). The credit agreement provides CEF with $5,000,000 to meet initial margin requirements in CEF’s commodity accounts established by ED&F for the purpose of trading futures and options contracts. Any loans outstanding are payable on demand and bear interest at a rate equal to 3 month LIBOR plus 5.50%s. The agreement also calls for an annual commitment fee of $50,000 payable in monthly installments. The agreement is secured by all balances in CEF’s trading accounts under the customer agreement and is subject to certain reporting, affirmative, and negative covenants, including certain financial tests.

On January 27, 2016, effective January 1, 2016, the Company and Enterprises signed an amendment to the Term Loan that provided for the elimination of Enterprises’ obligation to reimburse the Company for certain costs incurred as a publicly reporting entity.

On February 18, 2016, REH was informed that on February 12, 2016, the Ontario Superior Court of Justice ordered the winding up and liquidation of Maple Bank and appointed KPMG Inc. as liquidator following reports that the German banking authorities had terminated Maple’s banking license. REH is currently attempting to obtain replacement financing and, at the same time, negotiating with KPMG regarding the timing and method of repayment of amounts outstanding under the Maple Bank revolver.

On March 18, 2016, FERC issued in Docket No. EC16-60-000 an order granting authorization, under Section 203(a)(1) of the Federal Act, for six individuals to acquire equity interests in Aspirity Holdings LLC.

On March 30, 2016, the PSA with Exelon was executed to provide us with all the power and ancillary services we need to serve our customers for an initial term expiring on March 30, 2019. As of December 31, 2015, Exelon was the operator of the second largest generation fleet in the U.S. and its long-term S&P credit rating was BBB.

Enterprises loaned Ultra Green $50,000 on February 29, 2016 and an additional $50,000 on March 17, 2016. The notes are secured by a first mortgage on Ultra Green’s production facility in Devil’s Lake, North Dakota and bear interest at 10% per annum. Interest only payments are due beginning September 1, 2015. The notes mature when the sale of the North Dakota facility is closed. In connection with the issuance of these notes, Ultra Green issued the Company two warrants to purchase 50,000,000 shares each of its common stock for $0.001 per share. The warrants expire February 28, 2026 and March 16, 2026.

Through April 4, 2016 Enterprises has made distributions to Tim Krieger totaling $400,000.

The Company has evaluated subsequent events occurring through the date that the financial statements were issued.

28. Restated Financial Information

Overview and Background

Subsequent to the issuance of the Company’s consolidated financial statements as of and for the year ended December 31, 2015, management determined that three line items within the members’ equity section of the balance sheet and within the statement of changes in member’s equity (deficit) – common equity, total members’ equity and non-controlling interest – should be restated to correct the presentation of amounts previously reported. Additionally, the statement of cash flow non-cash financing activities line items – non-controlling interest and non-controlling interest due to distribution and reconsolidation of VIE should be restated to correct the presentation of amounts previously reported.

These adjustments had no effect on the remainder of the Company’s balance sheet or total equity, consolidated statement of comprehensive income, or operating, investing, or financing activities within the consolidated statements of cash flows. The following table summarizes the effects of the restatement on the Company’s consolidated financial statements:

	As Previously Reported			Adjustments			As Restated
Balance Sheet at December 31, 2015
Common equity	$	(1,646,963	)	$	(5,852,617	)	$	(7,499,580	)
Total members’ equity (deficit)	$	1,098,037		$	(5,852,617	)	$	(4,754,580	)
Non-controlling interest	$	(9,807,776	)	$	5,852,617		$	(3,955,159	)

The statement of cash flow non-cash financing activities line items – non-controlling interest and non-controlling interest due to distribution and reconsolidation of VIE were previously reported as $(9,339,292) and $(8,680,520), respectively, and should have been $(3,486,675) and $(2,827,903), respectively.

Additionally, footnotes 3 and 26 to the consolidated financial statements were updated as a result of the changes noted above.

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

At the time the Original Filing of our Form 10-K on April 15, 2016 (the "Original Filing"), our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2015 and concluded that disclosure controls and procedures were effective.

Notwithstanding the identified material weaknesses, management believes the consolidated financial statements included in this Annual Report on Form 10-K/A fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with accounting principles generally accepted in the United States of America.

Management's Report on Internal Control Over Financial Reporting (As Revised)

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. At the time the Original Filing, management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2015 and concluded it was effective. In making this assessment, the Company's management used the criteria established in the 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures or its internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

In connection with the restatement discussed elsewhere in this Annual Report on Form 10-K/A, management, including the Company's Chief Executive Officer and Chief Financial Officer, reassessed the effectiveness of internal control over financial reporting and determined there were material weaknesses as of December 31, 2015. As a result of the reassessment and based on the criteria in COSO, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2015. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. The Company's internal control regarding the reliability of financial reporting and the preparation of financial statements for external purposes was not designed or operating effectively to produce timely and accurate financial statements. A misstatement related to the classification of non- controlling interest within the members' equity section of the balance sheet occurred as a result of this material weakness. Additionally, management's control related to the preparation and review of estimates of fair value of investments in convertible notes securities failed to identify a material impairment for the year ended December 31, 2015. The Company's control is designed to assess the appropriateness of underlying key valuation methodologies and assumptions. The control did not operate effectively to evaluate the fair value of investments and ensure there was supportable evidence to substantiate key valuation assumptions.

On September 1, 2015, Enterprises acquired 60% of the outstanding common stock of Noble. At the time of the acquisition, Enterprises was a wholly-owned subsidiary of the Company. Consistent with the consolidation of Enterprises' financial results with the Company's, the Company is in the process of integrating Noble's operations and has not included Noble's activity in its evaluation of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. See "Notes to Consolidated Financial Statements - Note 6 - Acquisitions" for additional information relating to the Noble acquisition. Noble's operations constituted approximately 9% of total assets (excluding goodwill and other intangible assets) as of December 31, 2015, and 5% of total revenue for the year then ended. Assuming the continued consolidation of Enterprises, Noble's operations will be included in the Company's assessment as of December 31, 2016.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting in three months ended December 31, 2015, except for the material weaknesses discussed above.

Plan for Remediation of Material Weaknesses

With oversight from the Audit Committee, the Company's management is in the process of developing and implementing remediation plans to address the material weaknesses described above. Once all remedial actions have been implemented and in operation for a sufficient period of time, these actions will be fully tested to determine whether they are operating effectively.

Item 9B – Other Information

None.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized.

	ASPIRITY HOLDINGS, LLC

Dated: May 23, 2016	By:	/s/ Mark A. Cohn
		Mark A. Cohn President and Chief Executive Officer (principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K/A has been signed below on the dates set forth by the following persons on behalf of the registrant and in the capacities indicated:

Dated: May 23, 2016			/s/ Timothy S. Krieger
			Timothy S. Krieger Chairman of the Board

Dated: May 23, 2016			/s/ Mark A. Cohn
			Mark A. Cohn President, Chief Executive Officer, and Director (principal executive officer)

Dated: May 23, 2016			/s/ Wiley H. Sharp III
			Wiley H. Sharp III Vice President – Finance and Chief Financial Officer (principal accounting and financial officer)

Dated: May 23, 2016			/s/ William M. Goblirsch
			William M. Goblirsch Director

Dated: May 23, 2016			/s/ Paul W. Haglund
			Paul W. Haglund Director

Dated: May 23, 2016			/s/ David B. Johnson
			David B. Johnson Director

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ASPIRITY HOLDINGS LLC Reports

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