Concentration of Credit Risk and Off-Balance Sheet Risk

3 Months Ended

Mar. 31, 2012

Concentration of Credit Risk and Off-Balance Sheet Risk [Abstract]

Concentration of Credit Risk and Off-Balance Sheet Risk

5. Concentration of Credit Risk and Off-Balance Sheet Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. The Company places its cash with primarily one institution, which management believes is of high credit quality. As of March 31, 2012, all of the Company’s cash is held in an interest bearing account.

The Company earns commission payments from bidders based on transactions completed between listers and bidders. The Company provides credit in the form of invoiced and unbilled accounts receivable to bidders in the normal course of business. Collateral is not required for trade accounts receivable, but ongoing credit evaluations of bidders are performed. While the majority of the Company’s revenue is generated from retail energy transactions where the winning bidder pays a commission to the Company, commission payments for certain auctions can be paid by the lister, bidder or a combination of both. Management provides for an allowance for doubtful accounts on a specifically identified basis, as well as through historical experience applied to an aging of accounts, if necessary. Trade accounts receivable are written off when deemed uncollectible. To date write-offs have not been material.

The following represents revenue and trade accounts receivable from bidders exceeding 10% of the total in each category:

	Revenue for the three months ended March 31,						Trade Accounts Receivable as of March 31,
Bidder	2012			2011			2012			2011
	(As Restated)						(As Restated)
A		3	%		5	%		9	%		12	%
B		15	%		13	%		10	%		11	%
C		11	%		11	%		18	%		16	%

In addition to its direct relationship with bidders, the Company also has direct contractual relationships with listers for the online procurement of certain of their energy, demand response or environmental needs. These listers are primarily large businesses and government organizations and do not have a direct creditor relationship with the Company. For the three months ended March 31, 2012 and 2011, no energy consumer represented more than 10% individually of the Company’s aggregate revenue, respectively.