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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;The accompanying unaudited condensed consolidated financial statements (the &amp;#8220;Financial Statements&amp;#8221;) of Lime Energy Co. (&amp;#8220;Lime Energy&amp;#8221; and, together with its subsidiaries, the &amp;#8220;Company&amp;#8221;, &amp;#8220;we&amp;#8221;, &amp;#8220;us&amp;#8221; or &amp;#8220;our&amp;#8221;) have been prepared in accordance with Rule&amp;#160;10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the &amp;#8220;SEC&amp;#8221;) and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (&amp;#8220;GAAP&amp;#8221;).&amp;#160; In our opinion, however, the Financial Statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position, results of operations and cash flows as of and for the interim periods.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;The Financial Statements have been prepared on the going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.&amp;#160; The Company&amp;#8217;s ability to continue as a going concern is ultimately dependent on its ability to achieve profitability before it exhausts its currently available capital, shed non-core assets and/or obtain additional funding.&amp;#160; Management has decided to focus its resources on its rapidly growing utility business and to reduce overhead costs to the extent possible. Consistent with this strategy, on February&amp;#160;28, 2013, it sold its public sector business. Management has also indicated that it continues to closely monitor and forecast its cash requirements and is prepared to attempt to raise additional capital if they foresee a need to do so to fund day-to-day operations. The Company has historically funded its operations through the issuance of additional equity and secured debt. However, there is no assurance that the Company will continue to be successful in obtaining additional funding in the future or improve its operating results. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may results from the possible inability of the Company to continue as a going concern.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;The results of operations for the three-month and six-month periods ended June&amp;#160;30, 2013 and 2012 are not necessarily indicative of the results to be expected for the full year.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;The December&amp;#160;31, 2012 balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;For further information, refer to the audited financial statements and the related footnotes included in the Lime Energy Co. Annual Report on Form&amp;#160;10-K for the year ended December&amp;#160;31, 2012.&lt;/font&gt;&lt;/p&gt;
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