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 ended March 31, 2008
 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
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
  o þ




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##### 



LIME ENERGY CO.
FORM 10-Q  For The Quarter Ended March 31, 2008
 INDEX
 PageNumberPart I Financial InformationITEM 1. Financial Statements:Condensed Consolidated Balance Sheets
March 31, 2008 (unaudited) and December 31, 2007
    
    
    1Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2008 and 2007 (unaudited)
    
    
    3Condensed Consolidated Statement of Stockholders Equity
Three months Ended March 31, 2008 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows
Three months Ended March 31, 2008 and 2007 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6ITEM 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    15ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23ITEM 4. Controls and Procedures
    
    
    23Part II. Other InformationITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24ITEM 6. Exhibits
    
    
    24Signatures
    
    
    25




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##### 



Lime Energy Co.
 
 Condensed Consolidated Balance Sheets
 March 31,2008
    
    
    December 31,(unaudited)
    
    
    2007 (1)AssetsCurrent AssetsCash and cash equivalents
    
    $
    2,319,519
    
    
    $
    4,780,701Accounts receivable, net
    
    
    4,152,772
    
    
    
    6,382,060Inventories
    
    
    611,937
    
    
    
    693,227Advances to suppliers
    
    
    423,403
    
    
    
    374,713Costs of uncompleted contracts in excess of related billings
    
    
    1,096,002
    
    
    
    952,997Prepaid expenses and other
    
    
    329,294
    
    
    
    250,169Total Current Assets
    
    
    8,932,927
    
    
    
    13,433,867Net Property and Equipment
    
    
    1,547,183
    
    
    
    1,542,327Long Term Receivables
    
    
    270,828
    
    
    
    224,568Deferred Financing Costs
    
    
    6,174
    
    
    
    6,885Intangibles, net
    
    
    3,741,205
    
    
    
    3,979,052Goodwill
    
    
    6,769,193
    
    
    
    6,757,133$
    21,267,510
    
    
    $
    25,943,832
 - 1 -




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##### 



Lime Energy Co.
Condensed Consolidated Balance Sheets
 March 31,2008
    
    
    December 31,(unaudited)
    
    
    2007 (1)Liabilities and Stockholders EquityCurrent LiabilitiesNotes payable
    
    $
    150,000
    
    
    $
    150,000Current maturities of long-term debt
    
    
    81,243
    
    
    
    81,954Accounts payable
    
    
    1,833,028
    
    
    
    3,092,226Accrued expenses
    
    
    1,220,082
    
    
    
    1,571,683Deferred revenue
    
    
    1,266,239
    
    
    
    1,531,417Customer deposits
    
    
    1,167,761
    
    
    
    1,180,834Total Current Liabilities
    
    
    5,718,353
    
    
    
    7,608,114Deferred Revenue
    
    
    195,182
    
    
    
    244,792Long-Term Debt, less current maturities
    
    
    3,416,452
    
    
    
    3,187,680Deferred Tax Liability
    
    
    1,034,000
    
    
    
    1,034,000Total Liabilities
    
    
    10,363,987
    
    
    
    12,074,586Stockholders EquityCommon stock, $.0001 par value; 200,000,000 shares
authorized, 7,752,314 and 7,720,269 issued
as of March 31, 2008 and December 31, 2007,
respectively
    
    
    777
    
    
    
    773Additional paid-in capital
    
    
    107,534,982
    
    
    
    106,267,336Accumulated deficit
    
    
    (96,632,236
    )
    
    
    (92,398,863
    )Total Stockholders Equity
    
    
    10,903,523
    
    
    
    13,869,246$
    21,267,510
    
    
    $
    25,943,832
 
 (1)
    
    Derived from audited financial statements in the Companys annual
report on Form 10-K for the year ended December 31, 2007 See accompanying notes to condensed consolidated financial statements
 - 2 -




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##### 



Lime Energy Co.
 
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Three months ended, March 31
    
    2008
    
    
    2007Revenue
    
    $
    2,907,479
    
    
    $
    2,528,547Cost of sales
    
    
    2,758,401
    
    
    
    2,156,480Gross profit
    
    
    149,078
    
    
    
    372,067Selling, general and administrative
    
    
    3,800,552
    
    
    
    3,255,911Amortization of intangibles
    
    
    237,847
    
    
    
    456,809Operating loss
    
    
    (3,889,321
    )
    
    
    (3,340,653
    )Other income (expense):Interest income
    
    
    43,900
    
    
    
    46,112Interest expense
    
    
    (387,952
    )
    
    
    (16,398
    )Total other (expense) income
    
    
    (344,052
    )
    
    
    29,714Net Loss
    
    
    (4,233,373
    )
    
    
    (3,310,939
    )Basic and Diluted Net Loss Per Common Share
    
    $
    (0.55
    )
    
    $
    (0.46
    )Weighted average common shares outstanding
    
    
    7,716,491
    
    
    
    7,172,382
 See accompanying notes to condensed consolidated financial statements
 - 3 -




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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, 2007
    
    
    7,720,269
    
    
    $
    773
    
    
    $
    106,267,336
    
    
    $
    (92,398,863
    )
    
    $
    13,869,246Share based compensation
    
    
    
    
    
    
    
    
    
    
    955,248
    
    
    
    
    
    
    
    955,248Satisfaction of interest obligation through
issuance of common stock
    
    
    6,667
    
    
    
    1
    
    
    
    63,016
    
    
    
    
    
    
    
    63,017Warrants issued for services received
    
    
    
    
    
    
    
    
    
    
    162,300
    
    
    
    
    
    
    
    162,300Proceeds from exercise of options and warrants
    
    
    25,378
    
    
    
    3
    
    
    
    87,082
    
    
    
    
    
    
    
    87,085Net loss for the three months ended
March 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,233,373
    )
    
    
    (4,233,373
    )Balance,March 31, 2008
    
    
    7,752,314
    
    
    $
    777
    
    
    $
    107,534,982
    
    
    $
    (96,632,236
    )
    
    $
    10,903,523
 See accompanying notes to condensed consolidated financial statements.
 - 4 -




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##### 



Lime Energy Co.
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 Three months ended March 31
    
    2008
    
    
    2007Cash Flow from Operating ActivitiesNet loss
    
    $
    (4,233,373
    )
    
    $
    (3,310,939
    )Adjustments to reconcile net loss to net cash used in
operating activitiesDepreciation and amortization
    
    
    313,878
    
    
    
    489,205Share based compensation
    
    
    955,248
    
    
    
    780,765(Recovery) provision of bad debts
    
    
    (24,306
    )
    
    
    3,246Warrants issued in exchange for services received
    
    
    162,300
    
    
    
    250,500Provision for inventory obsolescence
    
    
    
    
    
    
    47,781Accrued interest converted to common stock
    
    
    63,017
    
    
    
    Liquidated damages satisfied through the issuance of
common stock
    
    
    
    
    
    
    613,708Warrant repricing
    
    
    
    
    
    
    19,204Amortization of original issue discount
    
    
    711
    
    
    
    Amortization of deferred financing costs
    
    
    248,889
    
    
    
    Changes in assets and liabilities, net of dispositionsAccounts receivable and long term receivables
    
    
    2,207,334
    
    
    
    115,987Inventories
    
    
    81,290
    
    
    
    (302,345
    )Advances to suppliers
    
    
    (48,690
    )
    
    
    3,714Other current assets
    
    
    (222,130
    )
    
    
    (132,472
    )Accounts payable
    
    
    (1,259,198
    )
    
    
    127,860Accrued expenses
    
    
    (351,601
    )
    
    
    (498,067
    )Deferred revenue
    
    
    (314,788
    )
    
    
    (8,040
    )Customer deposits
    
    
    (13,073
    )
    
    
    194,087Net cash used in operating activities
    
    
    (2,434,492
    )
    
    
    (1,605,806
    )Cash Flows From Investing ActivitiesAcquisition costs
    
    
    (12,060
    )
    
    
    Purchase of property and equipment
    
    
    (80,887
    )
    
    
    (56,800
    )Net cash used in investing activities
    
    
    (92,947
    )
    
    
    (56,800
    )Cash Flows From Financing ActivitiesProceeds from long-term debt
    
    
    
    
    
    
    33,228Payment on long-term debt
    
    
    (20,828
    )
    
    
    (12,703
    )Proceeds from exercise of options and warrants
    
    
    87,085
    
    
    
    Costs related to stock issuance
    
    
    
    
    
    
    (45,361
    )Net provided by (cash used) in financing activities
    
    
    66,257
    
    
    
    (24,836
    )Net Decrease in Cash and Cash Equivalents
    
    
    (2,461,182
    )
    
    
    (1,687,442
    )Cash and Cash Equivalents, at beginning of period
    
    
    4,780,701
    
    
    
    4,663,618Cash and Cash Equivalents, at end of period
    
    $
    2,319,519
    
    
    $
    2,976,176Supplemental Disclosure of Cash Flow InformationCash paid for interest
    
    $
    136,572
    
    
    $
    12,219
 See accompanying notes to condensed consolidated financial statements.
 - 5 -




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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,
    
    2008
    
    
    2007Weighted average fair value
per option granted
    
    $
    6.77
    
    
    $
    4.97Significant assumptions (weighted
average):Risk-free rate
    
    
    3.18
    %
    
    
    5.08
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    89.2
    %
    
    
    89.5
    %Expected life (years)
    
    
    5.4
    
    
    
    5.3
   WeightedExercise
    
    
    AveragePrice Per
    
    
    ExerciseShares
    
    
    Share
    
    
    PriceOutstanding at December 31, 2007
    
    
    2,170,348
    
    
    $
    6.30  $1,363.95
    
    
    $
    23.31Granted
    
    
    35,267
    
    
    $
    8.70  $9.45
    
    
    $
    9.35Exercised
    
    
    (11,137
    )
    
    $
    7.14
    
    
    $
    7.14Forfeited
    
    
    (93,176
    )
    
    $
    7.14  $105.00
    
    
    $
    9.10Outstanding at March 31, 2008
    
    
    2,101,302
    
    
    $
    6.30  $1,363.95
    
    
    $
    23.79Options exercisable at March 31, 2008
    
    
    1,137,612
    
    
    $
    6.30  $1,363.95
    
    
    $
    35.84
 - 7 -




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##### 



Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Remaining
    
    
    Average
    
    
    Number
    
    
    AverageOutstanding at
    
    
    Contractual
    
    
    Exercise
    
    
    Exercisable at
    
    
    ExerciseExercise Price
    
    March 31, 2008
    
    
    Life
    
    
    Price
    
    
    March 31, 2008
    
    
    Price$6.30  $7.00
    
    
    548,571
    
    
    8.1 years
    
    $
    6.74
    
    
    
    291,427
    
    
    $
    6.73$7.01  $8.50
    
    
    818,298
    
    
    7.4 years
    
    $
    7.19
    
    
    
    720,203
    
    
    
    7.17$8.51  $11.00
    
    
    35,267
    
    
    9.8 years
    
    
    9.35
    
    
    
    14,284
    
    
    
    9.45$11.01  $12.00
    
    
    585,248
    
    
    9.5 years
    
    
    11.14
    
    
    
    1,429
    
    
    
    11.20$12.01  $13.50
    
    
    3,570
    
    
    9.3 years
    
    
    12.88
    
    
    
    
    
    
    
    $13.51  100.00
    
    
    14,286
    
    
    7.8 years
    
    
    65.10
    
    
    
    14,286
    
    
    
    65.10$100.01  $1,363.95
    
    
    96,062
    
    
    1.8 years
    
    
    339.06
    
    
    
    95,983
    
    
    
    339.252,101,302
    
    
    8.0 years
    
    $
    23.79
    
    
    
    1,137,612
    
    
    $
    35.84
   Note 4  Recent Accounting Pronouncements
  Fair Value Measurements
 - 8 -




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##### 



The Fair Value Option for Financial Assets and
Financial Liabilities.
  Note 5  Net Loss Per Share
   Three months ended March 31
    
    2008
    
    2007Weighted average shares
issuable upon exercise of outstanding options
    
    
    2,146,285
    
    
    
    1,572,505Weighted average shares
issuable upon exercise of outstanding warrants
    
    
    431,366
    
    
    
    200,684Weighted average shares
issuable upon conversion of
convertible debt
    
    
    714,286
    
    
    
    Total
    
    
    3,061,917
    
    
    
    1,773,189
 - 9 -




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##### 



Note 6  Warranty Obligations
   Three months ended March 31
    
    2008
    
    2007Balance, beginning of period
    
    $
    377,902
    
    
    $
    196,783Warranties issued
    
    
    19,100
    
    
    
    12,150Settlements
    
    
    (64,906
    )
    
    
    (9,858
    )Balance, as of March 31
    
    $
    332,096
    
    
    $
    199,075
 Note 7  Inventories
  March 31,
    
    December 31,2008
    
    2007Raw materials
    
    $
    613,775
    
    
    $
    681,602Finished goods
    
    
    
    
    
    
    13,463Reserve for obsolescence
    
    
    (1,838
    )
    
    
    (1,838
    )$
    611,937
    
    
    $
    693,227
 Note 8  Revolving Line of Credit
  - 10 -




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##### 



i)
    
    failure to pay interest or unused funds fees within 10 days of written demand;ii)
    
    failure to pay outstanding principal and accrued interest thereon on the maturity date;iii)
    
    failure to pay termination fees on the termination date;iv)
    
    the Company makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become due; or an order,
judgment or decree is entered adjudicating the Company bankrupt or insolvent; or any
order for relief with respect to the Company is entered under the Federal Bankruptcy
Code; or the Company petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of the Company, or of any substantial part
of the assets of the Company, or commences any proceeding relating to the Company under
bankruptcy reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation law of any jurisdiction; or any such petition or application is filed,
or any such proceeding is commenced, against the Company and such petition, application
or proceeding is not dismissed within sixty (60) days; orv)
    
    the Company sells substantially all of its assets.
   Note 9  Subordinated Convertible Term Notes
  - 11 -




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##### 



Value Allocated to Term Notes:Proceeds from issuance
    
    $
    5,000,000Less value allocated to warrants
    
    
    (1,136,537
    )Value allocated to Term Notes
    
    $
    3,863,463Market Value of Shares Issuable Upon Conversion:Shares issuable upon conversion of the Term Notes
    
    
    714,286Closing market value of stock on Term Note issuance date
    
    $
    8.022Market value of shares issuable upon conversion
    
    $
    5,730,000Beneficial Conversion Value:Market value of shares issuable upon conversion
    
    $
    5,730,000Less value allocated to Term Notes
    
    
    (3,863,463
    )Value of beneficial conversion feature
    
    $
    1,866,537
   - 12 -




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##### 



Note 10  Business Segment Information
     - 13 -




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##### 



Three months ended March 31
    
    2008
    
    2007Revenues:Energy Services
    
    $
    2,210,386
    
    
    $
    1,704,843Energy Technology
    
    
    692,034
    
    
    
    846,500Financial Services
    
    
    5,059
    
    
    
    Intercompany sales
    
    
    
    
    
    
    (22,796
    )Total
    
    
    2,907,479
    
    
    
    2,528,547Operating Loss:Energy Services
    
    
    (1,550,538
    )
    
    
    (706,977
    )Energy Technology
    
    
    (784,233
    )
    
    
    (815,939
    )Financial Services
    
    
    5,003
    
    
    
    Corporate Overhead
    
    
    (1,559,553
    )
    
    
    (1,817,737
    )Total
    
    
    (3,889,321
    )
    
    
    (3,340,653
    )Interest Income/(Expense), net
    
    
    (344,052
    )
    
    
    29,714Net Loss
    
    $
    (4,233,373
    )
    
    $
    (3,310,939
    )
 March 31,
    
    
    December 31,2008
    
    
    2007Total Assets:Energy Services
    
    $
    14,622,838
    
    
    $
    16,493,666Energy Technology
    
    
    2,617,145
    
    
    
    3,166,073Financial Services
    
    
    587,552
    
    
    
    351,297Corporate Overhead
    
    
    3,439,975
    
    
    
    5,932,796Total
    
    $
    21,267,510
    
    
    $
    25,943,832
 - 14 -




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##### 



Note 11  Equity Issuances
 (a)
    
    During the first quarter of 2008, the Company issued to three consultants warrants with terms
of three to four years to purchase 27,143 shares of its common stock at prices of $8.05 to
$10.50 per share as partial consideration for services provided the Company. These warrants
was valued at $162,300 using a modified Black-Sholes option pricing model utilizing the
following assumptions: risk free rate of 1.82% to 3.259%, expected volatility of 91.6% to
105.0%, expected dividend of $0 and expected life of three to four years. The value of the
warrants was charged to operations during the first quarter of 2008.
 (b)
    
    During the first quarter of 2008, the Company issued 6,667 shares of its common stock to the
holders of its subordinated convertible term notes in satisfaction of 50% of the interest owed
on the notes.
 (c)
    
    During the first quarter of 2008, holders of certain options and warrants exercised their
rights to purchase 25,378 shares of the Companys common stock at prices between $6.30 per
share and $7.14 per share.
 Note 12  Related Party Transactions
  - 15 -




---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
      - 16 -




---



##### 



Results of Operations
     
    
    direct labor and commission costs related to our employee sales force;
    
    expenses related to our non-manufacturing management, supervisory and staff
salaries and employee benefits, including the costs of share based compensation;
    
    commission costs related to our independent sales representatives;
    
    costs related to insurance, travel and entertainment, office supplies and
utilities;
    
    costs related to marketing and advertising our products;
    
    legal and accounting expenses;
    
    research and development expenses; and
    
    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.
  - 17 -




---



##### 



Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007
 Revenue.
   Gross Profit.
 Selling, General and Administrative Expense.
 - 18 -




---



##### 



Amortization of Intangibles.
 Other Non-Operating (Expense) Income.
 Three months ended March 31,
    
    2008
    
    
    2007Line of credit
    
    $
    
    
    
    $
    Note payable
    
    
    3,389
    
    
    
    4,247Mortgage
    
    
    8,223
    
    
    
    11,376Subordinated convertible notes
    
    
    124,317
    
    
    
    Other
    
    
    2,423
    
    
    
    775Amortization of deferred issuance
costs and debt discount
    
    
    249,600
    
    
    
    Total Interest Expense
    
    $
    387,952
    
    
    $
    16,398
   Liquidity and Capital Resources
   - 19 -




---



##### 



Three months ended March 31,
    
    2008
    
    2007Net cash used in operating activities
    
    $
    (2,434,492
    )
    
    $
    (1,605,806
    )Net cash used in investing activities
    
    
    (92,947
    )
    
    
    (56,800
    )Net cash provided by (used in) by financing activities
    
    
    66,257
    
    
    
    (24,836
    )Net Decrease in Cash and Cash Equivalents
    
    
    (2,461,182
    )
    
    
    (1,687,442
    )Cash and Cash Equivalents, at beginning of period
    
    
    4,780,701
    
    
    
    4,663,618Cash and Cash Equivalents, at end of period
    
    $
    2,319,519
    
    
    $
    2,976,176
 Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007
  Operating Activities
     - 20 -




---



##### 



Investing Activities
  Financing Activities
  LIQUIDITY
    
    
    Focus on increasing the sales and profitability of our products and services.
During the past two fiscal years we increased our revenue by $15,787,701, or 427%, and our
gross profit increased from $1,575 to $4,398,720. This improvement in our gross profit was
largely offset by a $7,708,878 increase in our SG&A expense ($3,982,147 excluding non-cash
share based compensation) over the period, the result of acquisitions and the addition of
sales and administrative support personnel. However, we believe that we have the
infrastructure in place to support a doubling of revenue in 2008, without the need to
increase our headcount significantly from current levels. While there is no assurances
that we will grow our revenue to that level, if we can achieve significant revenue growth,
we believe we will significantly reduce or eliminate the cash consumed from operating
activities before changes in working capital.
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
    
    Turn around the performance of our Energy Technology segment. Largely as a
result of lower than expected sales, our Energy Technology segment recorded an operating
loss of approximately $8.2 million during 2007, or 55% of our total operating loss. Part
of the failure to achieve scale in this business is due to delays in getting a new version
of the eMAC into production. We have taken steps to address this issue and hope that the
new version of the eMAC will be available during the second half of 2008. In the meantime,
we have taken steps to reduce the overhead costs of this segment to better align them with
the anticipated level of business activity. We continue to invest in this segment because
we believe there is a good market for this segments products based on a marketing study
completed last year, and our experience marketing the product. We also have an established
base of eMAC customers who continue to purchase the product to build upon. We are committed
to turning around the performance of this segment, but at the same time we continue to
carefully review all of our alternatives for this business.
    
    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
 Disclosure Controls and Procedures.
  Changes in Internal Controls.
  Limitations of the Effectiveness of Internal Control
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PART II. OTHER INFORMATION
 
 Unregistered Sales of Equity Securities and Use of Proceeds
 (1)
    
    During the first quarter of 2008, we issued three consultants warrants with terms of
three to four years to purchase 27,143 shares of our common stock at prices of $8.05 to
$10.50 per share as partial consideration for services provided the Company.(2)
    
    During the first quarter of 2008, we issued 6,667 shares of our common stock to the
holders of our subordinated convertible term notes in satisfaction of 50% of the interest
owed to them.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 14, 2008
    
    By:
    
    /s/ David AsplundDavid AsplundChief Executive Officer (principalexecutive officer)Dated: May 14, 2008
    
    By:
    
    /s/ Jeffrey MistarzJeffrey MistarzChief Financial Officer (principalfinancial and accounting officer)
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