Note 3. Accounts Receivable – Project Revenue and Project Costs

ENEC and FANR Projects

The total accounts receivable from the ENEC and FANR contracts was approximately $0.3 million at September 30, 2012 and December 31, 2011. These amounts due from ENEC and FANR represent approximately 86% and 100% of the total accounts receivable reported of approximately $0.4 million and $0.3 million at September 30, 2012 and December 31, 2011, respectively.

Total unbilled accounts receivable included in the accompanying consolidated balance sheets and reported in accounts receivable of approximately $0.2 million at September 30, 2012 and December 31, 2011 is for work that was billed to our clients in October 2012 and January 2012, respectively. Foreign currency transaction exchange gains (losses) were not material for the three and nine months ended September 30, 2012 and 2011, respectively, which is reported in the caption “other income and expenses” on the accompanying consolidated statement of operations. Translation gains and losses for the three and nine months ended September 30, 2012 and 2011 were also not material.

Travel costs and other reimbursable costs under these contracts are reported in the accompanying statement of operations as both revenue and cost of consulting services provided, and totaled approximately $0.1 million for the three month periods ended September 30, 2012 and 2011, and approximately $0.4 million for the nine month periods ended September 30, 2012 and 2011. The total travel and other reimbursable expenses that have not been reimbursed to us and are included in total accounts receivable reported above from our consulting contracts were approximately $0.1 million at September 30, 2012 and December 31, 2011.

We expect to continue to provide strategic advisory services to ENEC and FANR during the term of these consulting agreements and we also expect the variation of revenue we earn from these contracts to continue. Under these agreements, revenue will be recognized on a time and expense basis. We periodically discuss our consulting work with ENEC and FANR, who review the work we perform and our reimbursable travel expenses, and accept our monthly invoicing for services and reimbursable expenses.