1065860--3/11/2009--LIME_ENERGY

related topics

{acquisition, growth, future}

{system, service, information}

{stock, price, operating}

{control, financial, internal}

{stock, price, share}

{cost, regulation, environmental}

{product, market, service}

{tax, income, asset}

{competitive, industry, competition}

{customer, product, revenue}

{regulation, government, change}

{personnel, key, retain}

{capital, credit, financial}

{gas, price, oil}

{financial, litigation, operation}

We have incurred significant operating losses since inception and may not achieve or sustain profitability in the future. If sufficient additional funding is not available to us, the commercialization of our services and technologies and our ability to grow is likely to be impaired. It is difficult for us to estimate our future quarterly operating results. Our ability to use our net operating loss carry forwards may be subject to limitation, which could potentially result in increased future tax liability. Risks Related to Our Business We have a limited operating history under our current business model in a rapidly evolving market, which may make it difficult to evaluate our business and prospects, and may expose us to increased risks and uncertainties. We depend upon a limited number of clients in any given period to generate a substantial portion of our revenue. Our public sector business depends on a limited number of ESCOs under contract by government and other public end-users. We may be unable to obtain sufficient bonding capacity to support certain service offerings. Failure of our subcontractors to properly and effectively perform their services in a timely manner could cause delays in the delivery of our energy efficiency solutions. A decrease in electric retail rates could lessen demand for our energy efficiency solutions. The failure to effectively maintain, upgrade and sell our proprietary technologies could have a material adverse effect on our business, results of operations and financial condition. We may not be able to integrate the recent AEM acquisition successfully. If our management fails to acquire companies in the future or to effectively negotiate the terms of future acquisitions, our growth may be impaired. Our growth may be impaired and our current business may suffer if we do not successfully address risks associated with acquisitions. If we are unable to manage our anticipated revenue growth effectively, our operations and profitability could be adversely affected. We operate in a highly competitive industry and if we are unable to compete successfully our revenue and profitability will be adversely affected. The success of our business depends on the market acceptance of our energy efficiency solutions. Our success is largely dependent upon the skills, experience and efforts of our senior management and our ability to attract and retain highly qualified engineers, sales people and other skilled personnel, and the loss of their services or our inability to attract and retain such personnel could have a material adverse effect on our ability to expand our business or to maintain profitable operations. Any internal or external security breaches involving our eMAC technology could harm our reputation, and even the perception of security risks regarding internet data transmission, whether or not valid, could inhibit market acceptance of our energy efficiency solutions and cause us to lose clients. If our information technology systems fail, or if we experience operation interruptions, then our business, results of operations and financial condition could be materially adversely affected. Product liability and personal injury claims could have a material adverse effect on our business, results of operations and financial condition. Our retrofitting process frequently involves responsibility for the removal and disposal of components containing hazardous materials and at times requires that our contractors or subcontractors work in hazardous conditions, either of which could give rise to a claim against us. Risks Related to Ownership of our Common Stock The future trading market for our common stock may not be active on a consistent basis and the market price of our common stock could be subject to significant fluctuations. Due to the concentration of holdings of our stock, a limited number of investors may be able to control matters requiring common stockholder approval or could cause our stock price to decline through future sales because they beneficially own a large percentage of our common stock.

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1065860--3/11/2009--LIME_ENERGY_CO.