A perusal of

Travelzoo's

(TZOO) - Get Report

latest filing with the

Securities and Exchange Commission

shows that the moon-shooting Internet outfit derives one-fifth of its revenue from two customers and is still paying for stock that was doled out to would-be vacationers six years ago.

Not that anyone cares. At midday, shares of the travel search engine were again over the century mark, rising $3.61 to $102. For the year, the stock is up nearly 1,100%. The shares cost 260 times estimated 2005 earnings, more than twice the multiple afforded

Yahoo!

(YHOO)

.

While revenue has nearly doubled at Travelzoo this year, roughly one-fifth of the $23 million in advertising dollars it has raked in comes from two unnamed travel-related companies. In a 10-Q filed Tuesday, Travelzoo says one customer accounts for 11% of its revenue, while the other makes up about 10% of all revenue.

"The loss of one client or both clients may result in a significant decrease in our revenues and results of operations, which could have a material adverse effect on our business," the company's filing deadpans in a semi-boilerplate list of risk factors.

Kelly Ford, Travelzoo's director of investor relations, says the company's policy is to not disclose the identities of its principal clients. "Clients consider their exact ad spending with us to becompetitively sensitive information," he said.

George Mihalos, a Guilford Securities analyst, says he believes Travelzoo's biggest advertiser is

Sabre Holdings'

(TSG) - Get Report

Travelocity business. Mihalos has a sell recommendation on Travelzoo's shares because of the stock's outsized valuation.

A Travelocity spokesman could not be reached for a comment.

Another looming risk chronicled in the filing is the cost of compensating several hundred thousand former shareholders who got free stock in a 1998 promotional giveaway.

Back in its infancy, Travelzoo gave away 5 million free shares to about 700,000 people who registered to use its Web site and search engine. The stock giveaway was a controversial idea, and ultimately the Securities and Exchange Commission took a dim view on such undertakings. But the stockholders were allowed to keep their shares.

The trouble occurred two years ago when Travelzoo merged with another corporation in a move to officially relocate from the Bahamas to the U.S. Travelzoo stockholders with free shares from the 1998 offering were given until April 25, 2004, to exchange those securities for shares of the new company. But many free shareholders didn't meet the deadline, either because they no longer had the securities or because they never heard about the merger.

After the deadline passed, Travelzoo's directors decided that the 4.1 million shares it set aside for the free stockholders were no longer valid. The company reduced its number of outstanding shares from 19 million to 15 million.

Coincidentally, Travelzoo's run to the stratosphere began right around the same time it declared those shares invalid. On April 26, the first day of trading after the board's decision, Travelzoo's shares opened at $8.31. Within a month, the stock was trading at $19 a share.

Fearing possible legal action over its decision to declare the 4.1 million shares invalid, Travelzoo did some backpedaling last month. The company announced in October that it would make cash payments to any former stockholders who could prove that they had received free shares and weren't aware of the need to turn them in.

In its quarter filing, Travelzoo set aside $220,000 to reimburse its former shareholders. But the company said it's impossible to say how much it might end up owing.

"The total future liability under this program is not reliably estimable, because it will depend on the ultimate number of valid requests received and future levels of the company's common stock price," the filing says.

You've got to believe that the higher Travelzoo's stock keeps rising, the more former shareholders will be digging around in their desk drawers, looking for proof they got their shares.