1375814--9/28/2007--MxEnergy_Holdings

related topics

{debt, indebtedness, cash}

{competitive, industry, competition}

{gas, price, oil}

{condition, economic, financial}

{system, service, information}

{loss, insurance, financial}

{interest, director, officer}

{operation, natural, condition}

{personnel, key, retain}

{control, financial, internal}

{acquisition, growth, future}

Risks Related To Our Business We may not fully hedge our commodity supply or other market positions against changes in commodity prices and consumption volumes, and our risk management policies and hedging procedures may not work as planned, which would adversely affect our business. Our customers may terminate their contracts at any time, and the resulting attrition can result in a cost of cover for previously purchased fixed price hedges and physical supplies, which could have a negative impact on our financial results. We may not have sufficient liquidity to hedge market risks effectively or conduct our business which would adversely affect our financial condition. Our financial swap agreements are settled against published index prices which could cease to be reliable or could become unavailable. Our financial results fluctuate on a seasonal and quarterly basis and are susceptible to changing weather conditions and commodity price fluctuations. The accounting for our hedging activities may increase the volatility in our quarterly and annual financial results. We depend on our billing systems and the utilities with whom we have billing service agreements, and we bear the related credit risk for certain customers. If these customers fail to pay their bills as they become due, it may adversely affect our financial condition. We depend on local transportation and transmission facilities of third parties to supply our customers. Our financial results may be harmed if transportation and transmission availability is limited or unreliable. We are subject to competition in each of our markets. We depend on continued state and federal regulation to permit us to operate in deregulated segments of the electric and gas industries. If competitive restructuring of the electric or gas utility industries are altered, reversed, discontinued or delayed, our business prospects and financial results could be materially adversely affected. We may not be able to manage our growth successfully. Any such failure could overly burden our resources and lead to poor customer satisfaction in our services. We may need to raise additional capital, which may not be available. This could jeopardize our financial position. We previously identified a material weakness in the design and operation of our internal controls as of June 30, 2006 which continued to exist as of March 31, 2007. While we believe that such material weakness no longer exists, we have not yet tested our newly implemented controls and there can be no assurance that such controls will effectively prevent material misstatements in our consolidated financial statements in future periods. Our success depends on key members of our management, the loss of whom could disrupt our business operations. Risks Related To Our Indebtedness Our substantial debt obligations could adversely affect our financial health and prevent us from fulfilling such obligations, including our obligations under the notes, and we might have difficulty obtaining more financing. Our interest expense would increase if interest rates increase which would have a negative impact on our financial performance. We will require a significant amount of cash to service our debt obligations. Our ability to generate cash depends on many factors beyond our control, including cash flow from our operating subsidiaries. If certain of our subsidiaries cannot make distributions to us, or such distributions decrease, we may not be able to make payments on the notes.

Full 10-K form ▸

1375814--9/28/2007--MxEnergy_Holdings_Inc