##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period endedMarch 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number 001-16265
 
 LIME ENERGY CO.
  Delaware
    
    36-4197337(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 1280 Landmeier Road, Elk Grove Village, Illinois 60007-2410
 (847) 437-1666   (Former name, former address and former fiscal year, if changed since last report)
  þ o
  o o þ
  o þ




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##### 



LIME ENERGY CO.
FORM 10-Q  For The Quarter Ended March 31, 2007
 INDEX
 PageNumberPart I
    
    Financial InformationITEM 1.
    
    Financial Statements:Condensed Consolidated Balance SheetsMarch 31, 2007 (unaudited) and December 31, 2006
    
    1Condensed Consolidated Statements of OperationsThree Months Ended March 31, 2007 and 2006 (unaudited)
    
    3Condensed Consolidated Statement of Stockholders EquityThree months Ended March 31, 2007 (unaudited)
    
    4Condensed Consolidated Statements of Cash FlowsThree months Ended March 31, 2007 and 2006 (unaudited)
    
    5Notes to Condensed Consolidated Financial Statements
    
    7ITEM 2.
    
    Managements Discussion and Analysis ofFinancial Condition and Results of Operations
    
    15ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    21ITEM 4.
    
    Controls and Procedures
    
    21Part II.
    
    Other InformationITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    22ITEM 6.
    
    Exhibits
    
    22Signatures
    
    23CertificationCertificationCertificationCertification




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Lime Energy Co.
 
 Condensed Consolidated Balance Sheets
 March 31,2007
    
    
    December 31,(unaudited)
    
    
    2006(1)AssetsCurrent AssetsCash and cash equivalents
    
    $
    2,976,176
    
    
    $
    4,663,618Accounts receivable, net
    
    
    2,684,681
    
    
    
    2,825,947Inventories
    
    
    869,055
    
    
    
    614,491Advances to suppliers
    
    
    128,369
    
    
    
    132,083Costs and estimated earnings in excess of billings on
uncompleted contracts
    
    
    45,727
    
    
    
    Prepaid expenses and other
    
    
    365,762
    
    
    
    279,017Total Current Assets
    
    
    7,069,770
    
    
    
    8,515,156Net Property and Equipment
    
    
    1,225,412
    
    
    
    1,201,008Long Term Receivables
    
    
    124,937
    
    
    
    102,904Intangibles, net
    
    
    4,670,020
    
    
    
    5,126,829Cost in Excess of Assets Acquired
    
    
    10,450,968
    
    
    
    10,450,968$
    23,541,107
    
    
    $
    25,396,865
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Lime Energy Co.
Condensed Consolidated Balance Sheets
 March 31,2007
    
    
    December 31,(unaudited)
    
    
    2006(1)Liabilities and Stockholders EquityCurrent LiabilitiesNotes payable
    
    $
    150,000
    
    
    $
    150,000Current maturities of long-term debt
    
    
    532,201
    
    
    
    46,699Accounts payable
    
    
    1,472,585
    
    
    
    1,344,725Accrued expenses
    
    
    753,710
    
    
    
    1,251,777Deferred revenue
    
    
    1,060,828
    
    
    
    967,446Customer deposits
    
    
    1,342,177
    
    
    
    1,148,090Total Current Liabilities
    
    
    5,311,501
    
    
    
    4,908,737Deferred Revenue
    
    
    647,558
    
    
    
    748,980Long-Term Debt, less current maturities
    
    
    55,415
    
    
    
    520,392Deferred Tax Liability
    
    
    1,034,000
    
    
    
    1,034,000Total Liabilities
    
    
    7,048,474
    
    
    
    7,212,109Stockholders EquityCommon stock, $.0001 par value; 200,000,000 shares
authorized, 50,400,319 and 49,786,611
issued as of March 31, 2007 and December
31, 2006, respectively
    
    
    5,040
    
    
    
    4,979Additional paid-in capital
    
    
    96,644,667
    
    
    
    95,025,912Accumulated deficit
    
    
    (80,157,074
    )
    
    
    (76,846,135
    )Total Stockholders Equity
    
    
    16,492,633
    
    
    
    18,184,756$
    23,541,107
    
    
    $
    25,396,865
 See accompanying notes to condensed consolidated financial statements
 (1)
    
    Derived from audited financial statements in the Companys annual
report on Form 10-K for the year ended December 31, 2006
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Lime Energy Co.
 
 Condensed Consolidated Statements of Operations
(Unaudited)
 Three months ended, March 31
    
    2007
    
    
    2006Revenue
    
    $
    2,528,547
    
    
    $
    1,146,345Cost of sales
    
    
    2,156,480
    
    
    
    908,402Gross profit
    
    
    372,067
    
    
    
    237,943Selling, general and administrative
    
    
    3,255,911
    
    
    
    1,749,003Amortization of intangibles
    
    
    456,809
    
    
    
    176,912Operating loss
    
    
    (3,340,653
    )
    
    
    (1,687,972
    )Other Income (Expense):Interest income
    
    
    46,112
    
    
    
    20,711Interest expense
    
    
    (16,398
    )
    
    
    (267,919
    )Total other income (expense)
    
    
    29,714
    
    
    
    (247,208
    )Loss from continuing operations
    
    
    (3,310,939
    )
    
    
    (1,935,180
    )Loss from discontinued operations
    
    
    
    
    
    
    (21,425
    )Net Loss
    
    
    (3,310,939
    )
    
    
    (1,956,605
    )Plus preferred stock dividends
    
    
    
    
    
    
    (615,290
    )Net Loss Available to Common Shareholders
    
    $
    (3,310,939
    )
    
    $
    (2,571,895
    )Basic and diluted loss per common share from
continuing operations
    
    $
    (0.07
    )
    
    $
    (0.74
    )Discontinued operations
    
    
    
    
    
    
    (0.01
    )Basic and Diluted Net Loss Per Common Share
    
    $
    (0.07
    )
    
    $
    (0.75
    )Weighted average common shares outstanding
    
    
    50,206,673
    
    
    
    3,410,455
 See accompanying notes to condensed consolidated financial statements
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Lime Energy Co.
 
 Condensed Consolidated Statement of Stockholders Equity
(Unaudited)
 Additional
    
    
    
    
    
    
    TotalCommon
    
    
    Common
    
    
    Paid-in
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalance,December 31, 2006
    
    
    49,786,611
    
    
    $
    4,979
    
    
    $
    95,025,912
    
    
    $
    (76,846,135
    )
    
    $
    18,184,756Offering costs for issuance of common stock
    
    
    
    
    
    
    
    
    
    
    (45,361
    )
    
    
    
    
    
    
    (45,361
    )Satisfaction of liquidated damages through the
issuance of common stock
    
    
    613,708
    
    
    
    61
    
    
    
    613,647
    
    
    
    
    
    
    
    613,708Share based compensation
    
    
    
    
    
    
    
    
    
    
    780,765
    
    
    
    
    
    
    
    780,765Warrants issued for services received
    
    
    
    
    
    
    
    
    
    
    250,500
    
    
    
    
    
    
    
    250,500Warrant repricing
    
    
    
    
    
    
    
    
    
    
    19,204
    
    
    
    
    
    
    
    19,204Net loss for the three months ended
March 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,310,939
    )
    
    
    (3,310,939
    )Balance,March 31, 2007
    
    
    50,400,319
    
    
    $
    5,040
    
    
    $
    96,644,677
    
    
    $
    (80,157,074
    )
    
    $
    16,492,633
 See accompanying notes to condensed consolidated financial statements.
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Lime Energy Co.
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Three months ended March 31
    
    2007
    
    
    2006Cash Flow from Operating ActivitiesNet loss
    
    $
    (3,310,939
    )
    
    $
    (1,956,605
    )Adjustments to reconcile net loss to net cash used in
operating activities, net of dispositionsDepreciation and amortization
    
    
    489,205
    
    
    
    221,715Share based compensation
    
    
    780,765
    
    
    
    144,610Provision for bad debts
    
    
    3,246
    
    
    
    14,415Warrants issued in exchange for services received
    
    
    250,500
    
    
    
    Provision for inventory obsolescence
    
    
    47,781
    
    
    
    Liquidated damages satisfied through the issuance of
common stock
    
    
    613,708
    
    
    
    Warrant repricing
    
    
    19,204
    
    
    
    Amortization of deferred financing costs
    
    
    
    
    
    
    51,225Amortization of original issue discount
    
    
    
    
    
    
    72,534Changes in assets and liabilities, net of dispositionsAccounts receivable
    
    
    115,987
    
    
    
    (89,394
    )Inventories
    
    
    (302,345
    )
    
    
    (2,015
    )Advances to suppliers
    
    
    3,714
    
    
    
    64,225Other current assets
    
    
    (132,472
    )
    
    
    (80,322
    )Accounts payable
    
    
    127,860
    
    
    
    258,758Accrued expenses
    
    
    (498,067
    )
    
    
    (107,973
    )Deferred revenue
    
    
    (8,040
    )
    
    
    198,989Other current liabilities
    
    
    194,087
    
    
    
    (32,442
    )Net cash used in operating activities
    
    
    (1,605,806
    )
    
    
    (1,242,280
    )Cash Flows Used In Investing ActivitiesSale of discontinued operations
    
    
    
    
    
    
    (83,586
    )Purchase of property and equipment
    
    
    (56,800
    )
    
    
    (9,704
    )Net cash used in investing activities
    
    
    (56,800
    )
    
    
    (93,290
    )Cash Flows Provided by Financing ActivitiesPayments on line of credit
    
    
    
    
    
    
    (871,752
    )Proceeds from long-term debt
    
    
    33,228
    
    
    
    Payment on long-term debt
    
    
    (12,703
    )
    
    
    (123,053
    )Costs related to stock issuance
    
    
    (45,361
    )
    
    
    Net cash used in financing activities
    
    
    (24,836
    )
    
    
    (994,805
    )Net Decrease in Cash and Cash Equivalents
    
    
    (1,687,442
    )
    
    
    (2,330,375
    )Cash and Cash Equivalents, at beginning of period
    
    
    4,663,618
    
    
    
    4,229,150Cash and Cash Equivalents, at end of period
    
    $
    2,976,176
    
    
    $
    1,898,775Supplemental Disclosure of Cash Flow InformationCash paid for interest  continuing operations
    
    $
    12,219
    
    
    $
    167,884Cash paid for interest  discontinued operations
    
    
    
    
    
    
    42
 See accompanying notes to condensed consolidated financial statements.
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Note 1  Basis of Presentation
    Note 2  Reverse Split
  Note 3  Stock-Based Compensation
  - 6 -




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Three months ended March 31,
    
    2007
    
    
    2006Weighted average fair value
per option granted
    
    $
    0.71
    
    
    $
    0.40Significant assumptions (weighted
average):Risk-free rate
    
    
    5.08
    %
    
    
    4.41
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    89.5
    %
    
    
    72.2
    %Expected life (years)
    
    
    5.3
    
    
    
    5.5
   WeightedExercise
    
    
    AveragePrice Per
    
    
    ExerciseShares
    
    
    Share
    
    
    PriceOutstanding at December 31, 2006
    
    
    10,707,132
    
    
    $
    0.96-$194.85
    
    
    $
    4.13Granted
    
    
    350,000
    
    
    $
    0.90-$    1.08
    
    
    $
    0.95Forfeited
    
    
    (34,666
    )
    
    $
    1.02-$  30.75
    
    
    $
    8.67Outstanding at March 31, 2007
    
    
    11,022,466
    
    
    $
    0.90-$194.85
    
    
    $
    4.01Options exercisable at March 31, 2007
    
    
    4,923,790
    
    
    $
    0.90-$194.85
    
    
    $
    7.68
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Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Remaining
    
    
    Average
    
    
    Number
    
    
    AverageOutstanding at
    
    
    Contractual
    
    
    Exercise
    
    
    Exercisable at
    
    
    ExerciseExercise Price
    
    March 31, 2007
    
    
    Life
    
    
    Price
    
    
    March 31, 2007
    
    
    Price$0.90 - $1.00
    
    
    3,690,000
    
    
    9.3 years
    
    $
    0.96
    
    
    
    273,000
    
    
    $
    0.95$1.01 - $1.10
    
    
    6,535,000
    
    
    9.3 years
    
    
    1.02
    
    
    
    3,881,653
    
    
    
    1.02$1.11 - $10.00
    
    
    100,000
    
    
    8.8 years
    
    
    9.30
    
    
    
    100,000
    
    
    
    9.30$10.01 - $194.85
    
    
    697,466
    
    
    3.2 years
    
    
    47.43
    
    
    
    669,137
    
    
    
    48.8011,022,466
    
    
    8.9 years
    
    $
    4.01
    
    
    
    4,923,790
    
    
    $
    7.68
   Note 4  Revenue Recognition
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Note 5  Recent Accounting Pronouncements
     Note 6  Net Loss Per Share
  - 9 -




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Three months ended March 31
    
    2007
    
    
    2006Weighted average shares
issuable upon exercise of outstanding options
    
    
    11,007,532
    
    
    
    836,576Weighted average shares
issuable upon exercise of outstanding warrants
    
    
    1,404,786
    
    
    
    1,078,088Weighted average shares
issuable upon conversion of preferred stock
    
    
    
    
    
    
    1,551,298Weighted average shares
issuable upon conversion of
convertible debt
    
    
    
    
    
    
    374,819Total
    
    
    12,412,318
    
    
    
    3,840,781
  Note 7  Warranty Obligations
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Three months ended March 31
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    196,783
    
    
    $
    208,300Warranties issued
    
    
    12,150
    
    
    
    13,500Settlements
    
    
    (9,858
    )
    
    
    (33,546
    )Balance, as of March 31
    
    $
    199,075
    
    
    $
    188,254
 Note 8  Inventories
  March 31,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    1,226,508
    
    
    $
    1,010,995Work in process
    
    
    82,092
    
    
    
    3,700Finished goods
    
    
    189,387
    
    
    
    196,586Reserve for obsolescence (1)
    
    
    (628,932
    )
    
    
    (596,790
    )$
    869,055
    
    
    $
    614,491
 (1)
    
    Includes $553,909 reserve for obsolete EnergySaver inventory
 Note 9  Dividends
  Three months ended March 31
    
    2007(1)
    
    
    2006Accrual of Dividend on Series E
Convertible Preferred
    
    $
    
    
    
    $
    348,900Deemed dividend associated with change in exercise
price of warrants issued to preferred investor
    
    
    
    
    
    
    266,390Total
    
    $
    
    
    
    $
    615,290
 (1)
    
    All outstanding shares of the Series E Convertible
Preferred was converted to common stock on June 29, 2006.
 - 11 -




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Note 10  Business Segment Information
     - 12 -




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Three months ended March 31
    
    2007
    
    
    2006Revenues:Energy Technology
    
    $
    846,500
    
    
    $
    1,146,345Energy Services
    
    
    1,704,843
    
    
    
    Intercompany sales
    
    
    (22,796
    )
    
    
    Total
    
    
    2,528,547
    
    
    
    1,146,345Operating Loss:Energy Technology
    
    
    (815,939
    )
    
    
    (992,741
    )Energy Services
    
    
    (706,977
    )
    
    
    Corporate Overhead
    
    
    (1,817,737
    )
    
    
    (695,231
    )Total
    
    
    (3,340,653
    )
    
    
    (1,687,972
    )Interest Income/
(Expense), net
    
    
    29,714
    
    
    
    (247,208
    )Loss from Continuing
Operations
    
    $
    (3,310,939
    )
    
    $
    (1,935,180
    )March 31,
    
    
    December 31,2006
    
    
    2006Total Assets:Energy Technology
    
    $
    7,378,976
    
    
    $
    7,409,969Energy Services
    
    
    12,010,871
    
    
    
    12,490,617Corporate Overhead
    
    
    4,151,260
    
    
    
    5,496,279Total
    
    $
    23,541,107
    
    
    $
    25,396,865
 Note 11  Equity Issuances
 (a)
    
    During January 2007, the Company issued a consultants warrants with terms of two to three
years to purchase 420,000 shares of its common stock at prices of $1.00 to $1.08 per share as
partial consideration for services provided the Company. These warrants was valued at
$250,500 using a modified Black-Sholes option pricing model utilizing the following
assumptions: risk free rate of 5.129%, expected volatility of 88.9%, expected dividend of $0
and expected life of two to three years. The value of the warrants was charged to operations
during the first quarter of 2007.
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(b)
    
    A provision of the June 2006 PIPE transaction required the Company to file and have declared
effective by no later than November 3, 2006, a registration statement registering the shares
issued as part of the transaction. To the extent that it failed to have the registration
statement declared effective by this date, it was required to pay penalties to the PIPE
investors at the rate of 1% per month of the purchase price paid by the investors. Largely as a
result of the questions regarding the need to amend its Certificate of Incorporation to effect
the reverse split of its stock (as discussed in Note 2), the Company was not able to have the
registration statement declared effective until February 14, 2007. All of the investors in the
PIPE transaction agreed to accept shares of the Companys common stock as payment of this
registration penalty. As of December 31, 2006, the Company had accrued $345,583 in penalties
related to its failure to register these shares. The accrued penalties, along with $268,125 of
penalties for the period from January 1, 2007 through February 14, 2007, were satisfied through
the issuance of 613,708 shares of common stock in January and February 2007.
 Note 12  Related Party Transactions
 st
 Note 13  Subsequent Event
 
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
  Results of Operations
     - 15 -




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
    
    direct labor and commission costs related to our employee sales force;
    
    expenses related to our management and staff salaries and related employee benefits,
including the costs of share based compensation;
    
    commission costs related to our independent sales representatives and our distributors;
    
    costs related to insurance, travel and entertainment and office supplies and utilities;
    
    costs related to marketing and advertising our products;
    
    legal and accounting expenses;
    
    research and development expenses;
    
    costs related to administrative functions that serve to support the existing
businesses of the Company, as well as to provide the infrastructure for future growth.
  Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
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Liquidity and Capital Resources
    Three months ended March 31,
    
    2007
    
    2006Net cash used in operating activities
    
    $
    (1,605,806
    )
    
    $
    (1,242,280
    )Net cash used in investing activities
    
    
    (56,800
    )
    
    
    (93,290
    )Net cash used in by financing activities
    
    
    (24,836
    )
    
    
    (994,805
    )Net Decrease in Cash and Cash Equivalents
    
    
    (1,687,442
    )
    
    
    (2,330,375
    )Cash and Cash Equivalents, at beginning of period
    
    
    4,663,618
    
    
    
    4,229,150Cash and Cash Equivalents, at end of period
    
    $
    2,976,176
    
    
    $
    1,898,775
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Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
  Operating Activities
    Investing Activities
  Financing Activities
  - 18 -




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##### Table of Contents



LIQUIDITY
     
    
    Focus on increasing the sales of our products and services. During 2006 we were
able to increase our revenue by 120%, and we saw our gross margin increase from $1,575 to
$1,780,907 (excluding the write-off of obsolete inventory). Although the increase in our
gross margin was more than offset by increases in SG&A, much of this increase in SG&A was
the result of non-cash charges (share based compensation and amortization of intangibles)
or expenses we do not expect to recur (asset write-offs, registration penalties, legal and
accounting costs). We believe that we have the infrastructure in place to support revenue
of two to three times what we achieved in 2006, without the need to significantly increase
our SG&A expense in 2007. If we can achieve this, we believe we will significantly reduce
or eliminate the cash consumed for operating activities, before changes in working capital.
We have taken several important steps toward increasing our revenue, starting with the
acquisitions of Parke and Kapadia. Dan Parke, our new President and COO, is an experienced
manager who has spent the last nine months focused on integrating and training our sales
and marketing staff. We have increased the number of people involved in sales and
marketing from 9 at the end of 2005 to 23 currently, all but five of which are new. We
have also invested a great deal of time and money in training these sales people how to
sell our products. We believe that some of these efforts to increase sales are beginning
to have their desired affect.
 - 19 -




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
    
    Expand our sales through internal product development, acquisitions and/or opening new
offices. We believe there are opportunities for further growth through geographic and
product line expansion. We can expand geographically by opening new offices, hiring
additional sales people and/or by acquiring established businesses in regions of the country
we do not currently serve. We can add to our product line through internal product
development, partnerships, joint ventures, licensing agreements and/or by acquiring business
with products, services and/or expertise that we do not currently have. An expanded product
line would allow us to offer additional energy solutions to our customers, thereby
increasing the value of each customer relationship.
    
    Aggressively manage our costs in order to conserve cash. The prudent use of the
capital resources available to us remains one of our top priorities. We are constantly
reviewing our operations looking for more efficient ways to achieve our objectives.
   Cautionary Note Regarding Forward-Looking Statements
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Quantitative and Qualitative Disclosures About Market Risk
 1 2
 
 Controls and Procedures
 a.
    
    Disclosure Controls and Procedures.Our management, including our chief executive officer and our chief financial officer,
maintains our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) and
has evaluated the effectiveness of our disclosure controls and procedures as of the end of
the period covered by this report. Based on such evaluation, our chief executive officer
and chief financial officer have concluded that, as of March 31, 2007, such disclosure
controls and procedures are effective for the purpose of ensuring that material information
required to be in the reports that we submit, file, furnish or otherwise provide to the
Securities and Exchange Commission is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure.b.
    
    Changes in Internal Controls.There have not been any changes in our internal control over financial reporting (as defined
in Rule 13a-15(f) under the Exchange Act) during the quarter ended March 31, 2007 that have
materially affected or are reasonably likely to materially affect our internal control over
financial reporting.
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PART II. OTHER INFORMATION
 
 Unregistered Sales of Equity Securities and Use of Proceeds
 (1)
    
    In January and February 2007 we issued a total of 613,708 shares of our common stock in
satisfaction of liquidated damages owed to the investors in our June 2006 PIPE transaction
as a result of our inability to register the shares issued in the transaction on or before
November 3, 2006. Of the 613,708 shares issued, 530,291 were included in the registration
statement that was declared effective on February 14, 2007 and 83,417 were not registered.No underwriters were involved in the transaction described above. All of the securities
issued in this transaction were issued by us in reliance upon the exemption from
registration available under Section 4(2) of the Securities Act, including Regulation D
promulgated thereunder, in that the transactions involved the issuance and sale of our
securities to financially sophisticated individuals or entities that were aware of our
activities and business and financial condition and took the securities for investment
purposes and understood the ramifications of their actions. Certain of the purchasers also
represented that they were accredited investors as defined in Regulation D and were
acquiring such securities for investment for their own account and not for distribution.
 
 Exhibits
 31.1
    
    Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)
and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certificate of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)
and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer of the Corporation Pursuant to Section 1350 of
Chapter 63 of Title 18 of the United States Code Pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    Certification of the Chief Financial Officer of the Corporation Pursuant to Section 1350 of
Chapter 63 of Title 18 of the United States Code Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
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SIGNATURES
  LIME ENERGY CO.:Dated: May 11, 2007
    By:
    /s/ David AsplundDavid AsplundChief Executive Officer (principal executive officer)Dated: May 11, 2007
    By:

/s/ Jeffrey MistarzJeffrey MistarzChief
Executive Officer (principal financial and accounting officer) - 23 -