Concentration of Credit Risk and Off-Balance Sheet Risk

6 Months Ended

Jun. 30, 2014

Concentration of Credit Risk and Off-Balance Sheet Risk

4. 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 cash equivalents and trade accounts receivable. The Company has no material off-balance sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. The Company places its cash and cash equivalents with two institutions, which management believes are of high credit quality. As of June 30, 2014, all of the Company’s cash and cash equivalents are held in interest bearing accounts.

The Company provides credit in the form of invoiced and unbilled accounts receivable in the normal course of business. Collateral is not required for trade accounts receivable, but ongoing credit evaluations 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.

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

	Revenue for the three months ended June 30,				Revenue for the six months ended June 30,				Trade Accounts Receivable as of June 30,
Bidder	2014		2013		2014		2013		2014		2013
A		12%		18%		15%		17%		21%		17%
B		13%		12%		11%		11%		13%		13%
C		7%		9%		7%		9%		11%		10%

Two bidders merged at the end of 2013 and have been combined for presentation purposes above. 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 and six months ended June 30, 2014 and 2013, no lister represented more than 10% individually of the Company’s aggregate revenue.