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<div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Basis of Presentation</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
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Commitments and Contingencies</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Legal Matters</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business.  Other than as set forth below, no legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve us which, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business or financial condition.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On October 28, 2011, Mr. Robert Weinstein, our former Chief Financial Officer, filed a Demand for Arbitration with the New York office of the American Arbitration Association against GEM seeking unpaid wages and benefits that Mr. Weinstein claimed he was owed under the terms of his employment agreement with GEM.  In February 2012, Mr. Weinstein was awarded a judgment totaling $391,914 and on October 5, 2012, Mr. Weinstein obtained a judgment against GEM for the sum of $414,235 in the Supreme Court of the State of New York, New York Count.  During the first quarter of 2013, we settled this litigation and obtained a full mutual release with Mr. Weinstein in consideration of us paying Mr. Weinstein an aggregate amount of $150,000.  During the fourth quarter of 2012, Mr. Weinstein agreed in principle to a settlement of $150,000 which is recorded as a liability at December 31, 2012.During the first quarter of 2013, we formally settled the litigation with Mr. Weinstein and obtained a full mutual release from Mr. Weinstein in consideration of us paying Mr. Weinstein an aggregate amount of $150,000. A gain on the settlement of these liabilities of $243,953 is recorded in our statement of income for the year ended December 31, 2012.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On September 8, 2011, an action entitled Cooper Electric Supply Co. v. Southside Electric, Inc. was filed in the Superior Court of New Jersey.  GEM succeeded to the business of Southside Electric, Inc. 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Pursuant to the PMP Agreement, commencing on September 15, 2010, GEM agreed to pay Mr. Bocos a monthly consulting fee of $8,000.</div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Operating leases</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In 2011, the Company leased office space in Teaneck, New Jersey and in Sunshine and Midtown Miami, Florida.  At December 31, 2011, all office space leases were terminated.  In October 2011, the Company moved its corporate office to Baton Rouge, Louisiana.  The company is utilizing office space, at no charge, from its CFO.  Rent expense for 2011 totaled $90,437.  Of that amount, $54,875 is included in accrued expenses at December 31, 2012.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Titan Consulting Agreement</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Effective as of February 1, 2011, we entered into a (i) Consulting Services Agreement (the "Titan Consulting Agreement") with Titan Management and Consulting LLC ("Titan"), pursuant to which Titan agreed to advise us with respect to business development, marketing, investor relations, financial matters and other related business matters, and (ii) Sales Agency Agreement (the "Titan Sales Agreement") with Titan, pursuant to which Titan agreed to, on a non-exclusive basis, market and sell our entire line of energy-efficient products and services in the United States, Canada, Mexico and the Caribbean. On March 26, 2011, we entered into a Settlement Agreement with Titan pursuant to which the parties mutually agreed to terminate all of their obligations and duties under the Titan Consulting Agreement and the Titan Sales Agreement, and release each other from any and all claims, rights and liabilities there under, in consideration for the payment of $26,000 by us to Titan.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Issuance of the Option to Financial Partners Funding, LLC</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On March 3, 2011 (the "Effective Date"), GEM entered into a Commitment Letter (the "Commitment Letter") with Financial Partners Funding, LLC, a Florida limited liability company ("FPF"). Pursuant to the Commitment Letter, FPF agreed to commit up to $200,000,000 in equipment leases to finance third-party purchases of GEM's lighting and Airlock products, subject to certain funding conditions, including FPF's due diligence and approval of the third party lessees. FPF has an exclusive right to finance such third-party purchases of GEM's products, however, GEM has the right to hold discussions with third-party financing entities. In the event that GEM is offered financing on terms more beneficial than those offered by FPF, FPF has the right of first refusal to offer financing on similar terms. FPF has no obligation to finance any particular transaction or proposed lease. GEM also agreed to reimburse FPF $50,000 in costs and expenses incurred by FPF in connection with its due diligence review of GEM's products, which amount will be paid from the proceeds of the first lease financed by FPF. 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The Option Price of $0.165 per share is equal to 110% of the closing price of our common stock on the OTCBB on March 2, 2011 (notwithstanding the language of the Agreement, the parties agreed to use the closing price on such date).  The Option may be exercised in part or in full at any time during the 48-month period commencing on the Effective Date and the Option Price will be adjusted proportionately for any partial exercise of the Option. The Option may also be exercised on a cashless basis. Pursuant to the terms of the Commitment Letter, in the event that the Commitment Letter is terminated or GEM meets the funding threshold described in the Commitment Letter and FPF does not fund the qualified projects, FPF agreed to return all or a portion of the Option that FPF would not be entitled to exercise as a result of such termination or failure to fund. 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The Option vested immediately as of the Effective Date.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Pursuant to the Commitment Letter and the Option, we also agreed to (x) file a registration statement to register the shares underlying the Option (the "Option Shares") for resale under the Securities Act of 1933, as amended (the "Securities Act"), within six months of the Effective Date (the "Resale Registration Statement"), and (y) keep such Resale Registration Statement effective until the Option Shares may be sold without limitation under the Securities Act. FPF agreed to waive the provision in the Commitment Letter which required us to increase the number of our authorized shares of common stock to 1 billion.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">As of December 31, 2012, FPF had the right to exercise the Option to purchase 7,834,896 shares of the Company's common stock, assuming 100% of the Option was exercised. We reported $11,719,170 in Option-based compensation expenses for consultants for the years ended December 31, 2011.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Because the Option was fully vested and non-forfeitable at the time of grant, the fair value of the Option was measured and expensed on the date of grant pursuant to ASC Topic 505, subtopic 50, <font style="font-style: italic; display: inline;">Equity-Based Payments to Non-Employees</font> (formerly Emerging Issues Task Force No. 96-18, <font style="font-style: italic; display: inline;">Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services</font>).</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">All charges for the Option have been determined under the fair value method using the Black-Scholes option-pricing model with the assumptions set forth below. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Option. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the holder of the Option.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 40%; font-family: times new roman; font-size: 10pt;"><tr bgcolor="#cceeff"><td valign="top" style="width: 30%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Expected dividend yields</div></td><td valign="top" style="width: 10%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Zero</div></td></tr><tr bgcolor="white"><td align="left" valign="top" style="width: 30%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Expected volatility</div></td><td align="left" valign="top" style="width: 10%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">299%</div></td></tr><tr bgcolor="#cceeff"><td align="left" valign="top" style="width: 30%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Risk-free interest rate</div></td><td align="left" valign="top" style="width: 10%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">1.67%</div></td></tr><tr bgcolor="white"><td align="left" valign="top" style="width: 30%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Expected term</div></td><td align="left" valign="top" style="width: 10%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">4 years</div></td></tr></table></div></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 270pt;">SEM Consulting Agreement</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 270pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Effective as of March 3, 2011, GEM entered into a Consulting Services Agreement (the "Consulting Agreement") with SE Management Consultants, Inc., a Florida corporation ("SEM").  Pursuant to the Consulting Agreement, SEM will advise GEM with respect to GEM's business development, marketing, investor relations, financial matters and other related business matters.  The Consulting Agreement is for a term of four years, unless earlier terminated pursuant to its terms. As compensation for services to be provided, GEM agreed to pay SEM a monthly management fee (the "Management Fee") of (i) $15,000 per month from March 1, 2011 to August 31, 2011, (ii) $25,000 per month from September 1, 2011 to February 29, 2012, and (iii) an amount equal to 1/1000 of GEM's gross sales for the previous 12 months from March 1, 2012.  The Management Fee cannot be less than $15,000 per month and is capped at $75,000 per month at any time during the term of the Consulting Agreement.  GEM will also reimburse SEM for all of its reasonable business expenses incurred directly on behalf of GEM.  GEM and SEM can each terminate the Consulting Agreement immediately for "cause" (as defined in the Consulting Agreement); upon termination for "cause," by SEM, GEM must pay SEM (x) any portion of the Management Fee it is due through the date of termination, (y) any unreimbursed expenses and (z) a termination fee equal to six months of the then-existing Management Fee.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In addition, in connection with the Consulting Agreement, effective as of March 3, 2011, GEM entered into a Sales Agency Agreement (the "Sales Agreement") with Energy Sales Solutions, LLC, a Florida limited liability company ("ESS") and an affiliate of FPF.  Pursuant to the Sales Agreement, ESS agreed to serve, on a non-exclusive basis, as GEM's sales representative for the solicitation and acceptance of orders for GEM's entire line of energy-efficient, lighting products and other products and services offered by GEM (the "Products"), in the United States, Canada, and the Caribbean.  The Sales Agreement will continue to be in effect as long as the Consulting Agreement remains in effect.  GEM agreed to pay ESS a commission of 10% of the gross sales of the Products generated by or on behalf of ESS.  GEM and ESS can each terminate the Sales Agreement immediately for "cause" (as defined in the Sales Agreement).</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 270pt;">Watz Consulting Agreement</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On April 26, 2011, we entered into a one-year consulting agreement with Watz Enterprises LLC ("Watz")(the "Watz Agreement"). Watz is a greater than 5% stockholder of our Company. Under the Watz Agreement, Watz agreed to advise us on business development and marketing matters in exchange for (i) a one-time payment of $65,000 and (ii) a monthly management fee of $25,000 payable from June 16, 2011 to May 15, 2012.  Included in accrued expenses as of December 31, 2012 are 14 payments of $25,000, totaling $350,000.  Included in accrued expenses as of December 31, 2011 are 8 payments of $25,000, totaling $200,000. Included in accrued expenses as of December 31, 2012 are 14 payments of $25,000 each, totaling $350,000.  In April 2012 the Company gave notice of termination of the Watz Agreement effective as of May 15, 2012.  The managing member of Watz is the brother-in-law of Michael Samuel, our former Chairman, President, CEO and director.</div></div>
44585243
44397743
44240364
44397743
44585243
4459
4440
44585243
44397743
0.0001
0.0001
500000000
500000000
0.97
0.85
<div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><div style="text-align: justify; font-style: italic; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt; font-weight: bold;">Consolidation</div></div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><font style="letter-spacing: 0.5in; font-size: 1px;">  </font><div style="text-align: justify; text-indent: 0.5in; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt;">The accompanying consolidated financial statements represent the consolidated operations of Green Energy Management Services Holdings, Inc. and its wholly-owned subsidiary, Green Energy Management Services, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.</div></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
116878
33583
277457
116550
<div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><div style="text-align: justify; font-style: italic; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt; font-weight: bold;">Cost of Revenue</div></div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: justify; text-indent: 0.5in; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt;">Cost of revenue includes costs such as amortized costs of capitalized projects, impairment of projects that don't meet our expectations of energy savings and costs of maintenance such as bulb replacement including labor.</div></div>
0
43911
27500
9746
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 8. Debt and Warrants Issuance</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During the second half of 2012, Water Tech World Wide, LLC ("Water Tech") loaned $110,000 to the Company for working capital. In the fourth quarter 2012, Water Tech loaned an additional $200,000 to provide additional working capital and to partially pay down the obligation with our former CFO (as discussed below).</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On December 31, 2012 (the "Effective Date"), we issued to (a) Water Tech (i) an 8% secured promissory note (the "1<font style="display: inline; font-size: 70%; vertical-align: text-top;">st</font> Note"), (ii) a warrant (the "First Warrant") and (iii) a second warrant (the "Second Warrant"), to formally document loans in aggregate amount of $310,000 that we received from Water Tech, and (b) a certain unaffiliated investor (the "Investor") (i) an 8% promissory note (the "2<font style="display: inline; font-size: 70%; vertical-align: text-top;">nd</font> Note" and together with the 1<font style="display: inline; font-size: 70%; vertical-align: text-top;">st</font> Note, the "Notes") and (ii) a warrant (the "Third Warrant" and collectively with the First Warrant and the Second Warrant, the "Warrants"), to formally document a loan in the amount of $50,000 that we received from the Investor during the fourth quarter of 2012 (collectively, the "Offering").  Dr. Thomson, a member of our Board of Directors, is the sole managing member of Water Tech and has the sole voting and dispositive power over the shares of our common stock underlying the Warrants owned by Water Tech.  As such, the 1<font style="display: inline; font-size: 70%; vertical-align: text-top;">st </font>Note is classified as a related party note in our consolidated balance sheet as of December 31, 2012.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The Notes matured on the earlier of (i) February 28, 2013 and (ii) the date when we consummate a debt and/or equity financing (the "Financing") resulting in gross proceeds to us of at least $310,000, with respect to the 1<font style="display: inline; font-size: 70%; vertical-align: text-top;">st</font> Note, and $50,000 with respect to the 2<font style="display: inline; font-size: 70%; vertical-align: text-top;">nd</font> Note (such date, the "Initial Maturity Date"), and maybe prepaid in whole or in part by us at any time without premium or penalty. We did not repay Water Tech and the Investor the Notes in full on or before the respective Initial Maturity Date, so the respective Initial Maturity Date was extended until the date when we consummate a Financing resulting in gross proceeds to us of at least $310,000, with respect to the 1<font style="display: inline; font-size: 70%; vertical-align: text-top;">st</font> Note, and $50,000, with respect to the 2<font style="display: inline; font-size: 70%; vertical-align: text-top;">nd</font>Note, and repay the unpaid principal amount and interest due under the Notes. We further agreed to make mandatory payments to Water Tech and the Investor (each a "Payment" or collectively, the "Payments") as funds are paid to and received by us under the Riverbay Agreement. The Notes are secured by all of our rights, title and interests in any Riverbay Payments and any other accounts receivable due to us from Riverbay under the Riverbay Agreement. The Notes contain customary events of default upon the occurrence of which, subject to any cure period, the full principal amount of the Notes, together with any other amounts owing in respect thereof, shall become immediately due and payable without any action on the part of Water Tech or the Investor. We plan to use the net proceeds of the sale of these securities as general working capital.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The First Warrant entitles Water Tech to purchase 19,035,638 shares of our common stock at an exercise price of $0.001 per share. The Second Warrant entitles Water Tech to purchase 2,337,707 shares of our common stock at an exercise price of $0.01 per share. The Third Warrant entitles the Investor to purchase 2,337,707 shares of our common stock at an exercise price of $0.01 per share. The Warrants will be exercisable from issuance until 3 years after the Effective Date. The number of shares of our common stock issuable upon exercise of the Warrants is subject to adjustment in the event of any change in the common stock, including changes by reason of stock dividends, stock splits, reclassifications, mergers, consolidations or other changes in the capitalization of common stock. The Warrants will be exercisable on a cashless basis any time after the issuance date and contain weighted average anti-dilution price protection. In addition, the First Warrant contains an anti-dilution provision (the "Dilution Protection Term"), in that as long as the First Warrant remains outstanding, Water Tech will have the right to convert the First Warrant into such number of shares of our common stock as will equal, when converted, 30% of the aggregate number of common shares outstanding upon conversion. With the exception of their exercise price, the Second Warrant and the Third Warrant are identical to the First Warrant and contain the Dilution Protection Term but with respect to 5% of the aggregate number of shares of our common stock deemed outstanding on the conversion date, including upon the exercise of such warrant.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In addition to the terms above, the Warrants all contain reset provisions, meaning that if we subsequently issue any common stock or securities convertible into common stock prior to the complete exercise of the Warrants, for a consideration per share that is less than the exercise price in effect for the Warrants at the time of issuance, the exercise price of the Warrants shall be reduced to the lower exercise price of the subsequent issuance. This reset provision was evaluated under ASC 815.  As a result of this provision, the Warrants now qualify for derivative accounting pursuant to ASC 815 (see Note 9).</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Also, during the fourth quarter 2012, Water Tech loaned $27,500 to us for working capital. The advance does not bear interest and is due on demand. This balance is outstanding at December 31, 2012.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In August 2012, we entered into a financing agreement with AFCO to finance a portion of our professional board of directors insurance.  The amount financed was $48,013, bore interest at 5.94% and was to be paid over 5 monthly payments of principal and interest of $9,746.  At December 31, 2012, there was one payment of $9,746 left to be made.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">As of March 31, 2011, GEM entered into the $500,000 Line of Credit Agreement pursuant to the LOC Agreement with a related party lender, pursuant to which the lender initially advanced to GEM $100,000, evidenced by a promissory note of the same amount dated as of equal date. During the second quarter ended June 30, 2011, we borrowed the balance of $400,000 available under the LOC Agreement. The note bears interest at a rate of 12% per year, with interest on the note paid monthly in arrears. The repayment of the note was due on March 31, 2012.  The parties are in discussions to extend the maturity date of the loan. See Note 15 for more detail.  This balance was outstanding at December 31, 2012 and 2011.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During the year ended December 31, 2011, certain of our affiliates, a consultant of our Company and a related party (collectively, the "Lenders"), provided us with short-term bridge loans in aggregate amount of $280,000 (the "Loans").  The Loans were not evidenced by promissory notes and do not bear interest.  During the fourth quarter of 2011, we were able to pay back $40,600 of the Loans.  At December 31, 2012 and 2011, there was a balance owed of $239,400.  The Company borrowed an additional $40,000 from one of these affiliates during the year ended December 31, 2012, all of which was repaid as of December 31, 2012.</div></div>
40600
310000
50000
310000
50000
360000
2013-02-28
9746
27500
40000
310000
0
310000
0.08
0.08
0.0594
0.12
0.08
137379
20000
4000000
1000000
3000000
18750
575635
646051
609000
692000
33431
46367
<div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Deferred Costs</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We capitalize costs associated with contracts that will generate future revenues from energy savings. These contracts will span between five and ten years.  These deferred costs are amortized as a component of cost of revenue over the life of the contract, using the straight-line method.  We evaluate deferred costs regularly on our projects that we have expended resources on. If, after a period of service, the deferred cost does not meet our or client's expectations, then we record an impairment expense on our statement of income.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
18000
206069
3600000
6000
3686190
4078
15546
35758
68346
474203
0
474203
427450
46753
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 9.  Derivative Liability</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">As described in Note 8 Debt and Warrants Issuance, we issued a total of 23,711,052 warrants on December 31, 2012.  Pursuant to ASC 815, the reset provision contained in the warrants qualifies the warrants for derivative accounting.  In addition, the derivative liability must be marked-to-market each reporting period and the change in its fair value will be recorded in our statement of income.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On the date of the issuance, the fair value of the derivative liability was $474,203, which was calculated using the Black-Scholes model based upon the following assumptions: expected volatility of 419.44%, discount rate of 0.36%, expected term of three years and no dividends.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">$427,450 of the fair value was attributable to warrants issued to Water Tech as additional consideration for the $310,000 note discussed above.  As the fair value of the warrants was higher than the face value of the note, a debt discount of $310,000 was recorded on the note with the additional $117,450 of fair value recorded as a loss on derivative liability during the year ended December 31, 2012.  The entire debt discount was amortized during the first quarter of 2013.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The remaining $46,753 of the fair value of the warrants was attributable to warrants issued to the Investor as additional consideration for the $50,000 note discussed above.  The fair value was recorded as a debt discount on the note and was fully amortized during the year ended December 31, 2012.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following table presents the recording of these transactions as of and for the year ended December 31, 2012:</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Water Tech</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Investor</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Total</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Note issued</div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">360,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 2px; width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Debt Discount</div></td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">(310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; padding-bottom: 2px; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">(310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 64%; display: inline; font-family: times new roman; font-size: 10pt;">  </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Water Tech</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Investor</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Total</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Note issued</div></td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; font-family: times new roman; font-size: 10pt;">310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 4px; width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Fair value of the warrants at issuance</div></td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; padding-bottom: 2px; width: 9%; font-family: times new roman; font-size: 10pt;">427,450</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; padding-bottom: 2px; width: 9%; font-family: times new roman; font-size: 10pt;">46,753</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">474,203</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="padding-bottom: 4px; width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Loss on derivative liability</div></td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">(117,450</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; padding-bottom: 4px; width: 9%; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div></div>
0
0
474203
474203
117450
0
117450
0
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 16.  Stock-Based Compensation</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On March 2, 2011, we issued 137,379 restricted shares of our common stock pursuant to our obligation under an employment agreement with our former Senior Vice President, Strategic and Business Development. The shares were valued at $206,069 based upon the market value per share of our common stock on the date of grant.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On April 6, 2011, we issued 20,000 restricted shares of our common stock to a member of our Board of Directors in accordance with our directors' compensation policy. The shares were valued at $18,000 based upon the value per share of our common stock on the date of grant.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On April 6, 2011, Ronald P. Ulfers, Jr., was appointed as our Chairman, President and Chief Executive Officer, replacing Mr. Samuel, and was elected as a director of the Company. In connection with his appointment, certain of our affiliates agreed to transfer to Mr. Ulfers 4,000,000 restricted shares of our common stock owned by such affiliates without the issuance of additional shares of our common stock to such affiliates or Mr. Ulfers and without dilution to the Company's stockholders. 1,000,000 of these shares were transferred by Ice Nine, LLC (see Note 14) and the remaining 3,000,000 were transferred from other investors of the Company. These 4,000,000 transferred shares were accounted for as a return of treasury stock and reissuance by the company as stock-based compensation to Mr. Ulfers. These shares were valued at $3,600,000 based upon the value per share of the Company's common stock on the date of transfer.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During 2011, we determined our $50,000 subscription receivable from 2010 was uncollectible and therefore wrote this amount off to compensation expense.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On February 22, 2012, we issued 18,750 restricted shares of our common stock to members of our Board of Directors in accordance with our directors' compensation policy. The shares were valued at $6,000 based upon the value per share of our common stock on the date of grant.</div></div>
27500
0
-0.05
-0.43
<div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Earnings Per Share</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of shares of our common stock outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if our share-based awards and convertible securities, if any, were exercised or converted into common stock.  The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. For the year ended December 31, 2011, there were no common stock equivalents.  For the year ended December 31, 2012, all common stock equivalents were anti-dilutive.</div></div>
955179
884974
4.1944
0
0.0036
P3Y
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 11. Fair Value of Financial Instruments</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We measure fair value in accordance with a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 Measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described below:</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities;</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following table sets forth our financial assets and liabilities measured at fair value by level within the fair value hierarchy as of December 31, 2012.  Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 1</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 2</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 3</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Total</div></td><td nowrap="nowrap" valign="bottom" style="text-align: center; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td></tr><tr><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 52%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Derivative liabilities</div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">474,203</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">474,203</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div>
0
538560
0
580800
0
-9418
243953
0
243953
<div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Impairment of long-lived assets</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We account for impairment of plant and equipment and amortizable intangible assets in accordance with the standard of "Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of", which requires us to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset's (or asset group's) fair value.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
549120
0
549120
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 13.  Income taxes</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We use the liability method, where deferred tax assets and liabilities are determined based on expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.  At December 31, 2012, we had approximately $10,531,971 of losses available for carry forward to future years.  The unused net operating losses begin to expire December 31, 2024.  At December 31, 2012, our deferred tax asset resulting from the cumulative net operating losses amounted to $3,686,190 which is covered by a full valuation allowance due to uncertainty of our ability to generate future taxable income necessary to realize the related deferred tax asset.</div></div>
-2121522
-19254789
0
0
<div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Income taxes</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We follow Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 109, ASC 740- "Accounting for Income Taxes" ("ASC 704").  This standard requires the use of an asset and liability approach for financial accounting for and reporting of income taxes.  If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.</div></div>
-26839
1209349
1278811
1836450
10000
0
-4300
-100992
-135565
481685
48941
7478
-7092
-2520
48729
0
-61422
27759
0
42240
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 4. Impairment of Technology Licensing Agreements</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On September 29, 2010, GEM entered into a technology licensing agreement (the "PMP Agreement") with PMP and Juan Carlos Bocos, the inventor of the patent pending water valve technology licensed under the PMP Agreement (the "Technology").Effective as of February 23, 2012, we modified the PMP Agreement, including having the Technology assigned to the Company.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The Technology is designed to reduce the amount of air flowing through water pipes allowing a customer's water meter to measure more precisely the exact amount of water used. The PMP Agreement allows the Company to market and distribute exclusively and to sell and service the water valve products manufactured through the use of the Technology to customers within various territories within the United States and a number of foreign countries.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We will periodically evaluate the value of the assigned technology and will adjust the value based upon periodic impairment analysis. As of December 31, 2012and 2011, the value was $0 and $580,800.  We evaluated the assigned technology for impairment as of December 31, 2012 and determined that the future expected undiscounted cash flows were insufficient for recoverability.  As such, the asset was deemed to be fully impaired as of December 31, 2012.  The impairment loss of $549,120 was recorded in our statement of income for the year ended December 31, 2012.</div></div>
102937
53511
113308
62772
48335
9589
90437
5117436
3666693
813433
1478212
500000
500000
110000
200000
48013
100000
400000
280000
400000
0.12
391914
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 17.  Payments from NYSERDA</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During 2011, we received $800,000 from the New York State Energy Research and Development Authority (the "Nyserda") under the Riverbay Agreement. Pursuant to the Riverbay Agreement, we agreed to provide energy management lighting installation and related services to Riverbay. Prior to us entering into the Assignment Agreement, we anticipated that during the term of the Riverbay Agreement we were scheduled to receive an additional amount of approximately $22,000 per month, to be adjusted based upon the actual savings on the project. For a more detailed discussion of the Assignment Agreement and the Riverbay Agreement, see Note 3. Major Agreements.</div></div>
414235
23700
15179
150000
<div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Concentration of Customers</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">For the year ended December 31, 2012, one customer accounted for approximately 97% of our total contract revenue. For the year ended December 31, 2011, we had two customers that, in total, represented 85% of our contract revenue.  Based upon the change of our business strategy, we will seek to conduct business with customers in high energy cost metropolitan areas.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
25000
65000
0
-25052
338517
1531016
-2121522
-19254789
0
0
0
-19254789
0
0
0
-2121522
-344666
-2346725
<div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Recently Issued Accounting Pronouncements</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We do not believe any recently issued accounting pronouncements issued by the FASB and the SEC will have a material impact on our present or future consolidated financial statements.</div></div>
739400
739400
59746
0
10531971
-2134717
-19192017
6000
10300
0
7092
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 5.  Other Current Assets</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following is the composition of Other Current Assets at December 31, 2012 and December 31, 2011:</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2012</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2011</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="width: 76%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Short term portion of licensing agreement - valve</div></td><td align="left" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">42,240</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 2px; width: 76%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Advances from related parties</div></td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">6,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">10,300</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="padding-bottom: 4px; width: 76%; font-family: times new roman; font-size: 10pt;">  </td><td align="right" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">6,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">52,540</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div>
3043312
2018453
0
20000
73119
85811
0
800000
310000
50000
367500
280000
280400
0
500000
50000
0
0
-5052
P5Y
11301
15379
20391
20391
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We record our property and equipment at cost and provide for depreciation using the straight-line method for financial reporting purposes and accelerated methods for income tax reporting purposes.  Office equipment is depreciated over a five year period. The detail of property and equipment at December 31, 2012 and December 31, 2011is as follows:</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"><div></div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2012</div></div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2011</div></div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="width: 76%;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Computer equipment</div></div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>20,391</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>20,391</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 2px; width: 76%;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Less: accumulated depreciation</div></div></td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>(9,090</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>(5,012</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="padding-bottom: 4px; width: 76%; font-family: times new roman; font-size: 10pt;"><div></div></td><td align="right" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>11,301</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td align="right" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>15,379</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr></table></div></div></div>
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 6. Property and Equipment</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We record our property and equipment at cost and provide for depreciation using the straight-line method for financial reporting purposes and accelerated methods for income tax reporting purposes.  Office equipment is depreciated over a five year period. The detail of property and equipment at December 31, 2012 and December 31, 2011is as follows:</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"><div></div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2012</div></div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2011</div></div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="width: 76%;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Computer equipment</div></div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>20,391</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>20,391</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 2px; width: 76%;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Less: accumulated depreciation</div></div></td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>(9,090</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>(5,012</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="padding-bottom: 4px; width: 76%; font-family: times new roman; font-size: 10pt;"><div></div></td><td align="right" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>11,301</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td align="right" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>15,379</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr></table></div></div></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Depreciation expense was $4,078 and $15,546 for the years ended December 31, 2012 and 2011, respectively.  During the year ended December 31, 2011, a vehicle was transferred and the obligation assumed by one of the employees of the Company reflecting a loss shown on the statement of income and on the statement of cash flows for the year ended December 31, 2011 of $9,418.</div></div>
15257
0
310000
<div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Receivables</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We currently provide Energy Efficiency services to a few customers.  Unsecured credit is extended based on an evaluation of each customer's financial condition. Uncollectible accounts receivable are charged directly against earnings when they are determined to be uncollectible. Use of this method does not result in a material difference from the valuation method required by generally accepted accounting principles.</div></div>
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 15.  Related Party Transactions</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">As of March 31, 2011, GEM entered into the $500,000 Line of Credit Agreement pursuant to the LOC Agreement with a related party lender, pursuant to which the lender initially advanced to GEM $100,000, evidenced by a promissory note of the same amount dated as of equal date. During the second quarter ended June 30, 2011, GEM borrowed the balance of $400,000 available under the LOC Agreement. The note bears interest at a rate of 12% per year, with interest on the note paid monthly in arrears. The repayment of the note was due on March 31, 2012.  The parties are in discussions to extend the maturity date of the loan. This balance was outstanding at December 31, 2012 and 2011.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During the year ended December 31, 2011, certain of our affiliates, a consultant of our Company and a related party (collectively, the "Lenders"), provided us with short-term bridge loans in aggregate amount of $280,400 (the "Loans").  The Loans were not evidenced by promissory notes and do not bear interest.  During the fourth quarter of 2011, we were able to pay back $41,000 of the Loans.  At December 31, 2012 and 2011, there was a balance owed of $239,400.</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In addition, see (i) Note 8. Debt and Warrants Issuance for a discussion of the 8% secured promissory note and warrants that we issued to Water Tech, along with the advance to Water Tech, and (ii) Note 14.  Commitments and Contingencies for a discussion of the Sales Agreement.</div></div>
40000
40600
41000
38983
8384
-23497844
-21376322
<div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Recognition of Income on Energy Efficiency Contracts</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We recognize income on energy efficiency contracts ratably over the life of the contract, based upon our share of the savings associated with the contract.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
1900000
1.1
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following table sets forth our financial assets and liabilities measured at fair value by level within the fair value hierarchy as of December 31, 2012.  Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 1</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 2</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Level 3</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid; text-align: center;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Total</div></td><td nowrap="nowrap" valign="bottom" style="text-align: center; padding-bottom: 2px; font-family: times new roman; font-size: 10pt;"> </td></tr><tr><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 52%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Derivative liabilities</div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">474,203</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">474,203</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div>
<div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 40%; font-family: times new roman; font-size: 10pt;"><tr bgcolor="#cceeff"><td valign="top" style="width: 30%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Expected dividend yields</div></td><td valign="top" style="width: 10%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Zero</div></td></tr><tr bgcolor="white"><td align="left" valign="top" style="width: 30%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Expected volatility</div></td><td align="left" valign="top" style="width: 10%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">299%</div></td></tr><tr bgcolor="#cceeff"><td align="left" valign="top" style="width: 30%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Risk-free interest rate</div></td><td align="left" valign="top" style="width: 10%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">1.67%</div></td></tr><tr bgcolor="white"><td align="left" valign="top" style="width: 30%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Expected term</div></td><td align="left" valign="top" style="width: 10%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">4 years</div></td></tr></table></div></div>
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following table presents the recording of these transactions as of and for the year ended December 31, 2012:</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Water Tech</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Investor</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Total</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Note issued</div></td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">360,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 2px; width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Debt Discount</div></td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">(310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; padding-bottom: 2px; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">(310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 64%; display: inline; font-family: times new roman; font-size: 10pt;">  </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="right" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><br /></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Water Tech</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Investor</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Total</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Note issued</div></td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; font-family: times new roman; font-size: 10pt;">310,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; font-family: times new roman; font-size: 10pt;">50,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td colspan="2" valign="bottom" style="display: inline; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 4px; width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Fair value of the warrants at issuance</div></td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; padding-bottom: 2px; width: 9%; font-family: times new roman; font-size: 10pt;">427,450</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; padding-bottom: 2px; width: 9%; font-family: times new roman; font-size: 10pt;">46,753</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">474,203</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="padding-bottom: 4px; width: 64%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Loss on derivative liability</div></td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">(117,450</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;">)</td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; padding-bottom: 4px; width: 9%; font-family: times new roman; font-size: 10pt;"> </td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div>
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The details of accrued liabilities at December 31, 2012 and December 31, 2011 are as follows:</div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31,</div><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31,</div><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued startup expenses</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">3,292</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">6,496</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued salaries and benefits</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">955,179</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">884,974</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued interest</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">102,937</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">53,511</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued consulting fees</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">1,927,029</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">1,018,597</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="padding-bottom: 2px; width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued rent</div></td><td valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">54,875</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">54,875</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td valign="bottom" style="padding-bottom: 4px; width: 76%; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">3,043,312</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">2,018,453</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div>
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following is the composition of Other Current Assets at December 31, 2012 and December 31, 2011:</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2012</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31, </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">2011</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr bgcolor="#cceeff"><td align="left" valign="bottom" style="width: 76%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Short term portion of licensing agreement - valve</div></td><td align="left" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">-</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">42,240</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td align="left" valign="bottom" style="padding-bottom: 2px; width: 76%;"><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Advances from related parties</div></td><td align="right" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">6,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">10,300</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="padding-bottom: 4px; width: 76%; font-family: times new roman; font-size: 10pt;">  </td><td align="right" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">6,000</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td align="left" valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">52,540</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div></div>
1742098
19250020
25000000
6000
3824069
0.02
1.50
0
0
0.15
0
7834896
31545948
10000000
0
0
P3Y2M1D
P2Y9M14D
7834896
23711052
P4Y
0.165
7834896
<div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Share-Based Compensation</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We account for equity based compensation transactions with our employees under the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic No. 718, "Compensation, Stock Compensation" ("Topic No. 718").  Topic No. 718 requires the recognition of the fair value of equity-based compensation in net income.  The fair value of our option based equity instruments are estimated using a Black-Scholes option valuation model.  This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award.  In addition, the calculation of equity-based compensation costs requires that we estimate the number of awards that will be forfeited during the vesting period.  The fair value of equity-based awards granted to our employees is amortized over the vesting period of the award and we elected to use the straight-line method for awards granted after the adoption of Topic No. 718.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We account for equity based transactions with non-employees under the provisions of ASC Topic No. 505-50, "Equity-Based Payments to Non-Employees" ("Topic No. 505-50").  Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div>
0
0.0167
2.99
239400
239400
239400
239400
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 2. Summary of Significant Accounting Policies</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The following lists our current accounting policies involving significant management judgment and provides a brief description of these policies:</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><div style="text-align: justify; font-style: italic; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt; font-weight: bold;">Consolidation</div></div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><font style="letter-spacing: 0.5in; font-size: 1px;">  </font><div style="text-align: justify; text-indent: 0.5in; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt;">The accompanying consolidated financial statements represent the consolidated operations of Green Energy Management Services Holdings, Inc. and its wholly-owned subsidiary, Green Energy Management Services, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.</div></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Basis of Presentation</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Recognition of Income on Energy Efficiency Contracts</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We recognize income on energy efficiency contracts ratably over the life of the contract, based upon our share of the savings associated with the contract.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Cash</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Cash and cash equivalents include cash on hand and money market demand deposits with banks.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><div style="text-align: justify; font-style: italic; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt; font-weight: bold;">Cost of Revenue</div></div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"> </div></div><div style="text-align: justify; line-height: 11.4pt; display: block; font-family: Times New Roman; font-size: 10pt; margin-right: 0pt;"><div><div style="text-align: justify; text-indent: 0.5in; font-family: 'Times New Roman', serif; color: #000000; font-size: 10pt;">Cost of revenue includes costs such as amortized costs of capitalized projects, impairment of projects that don't meet our expectations of energy savings and costs of maintenance such as bulb replacement including labor.</div></div><div> </div></div></div><div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Receivables</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We currently provide Energy Efficiency services to a few customers.  Unsecured credit is extended based on an evaluation of each customer's financial condition. Uncollectible accounts receivable are charged directly against earnings when they are determined to be uncollectible. Use of this method does not result in a material difference from the valuation method required by generally accepted accounting principles.</div></div><div style="text-align: center; line-height: 14.3pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Estimates</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Management uses estimates and assumptions in preparing financial statements.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from those estimates.  Costs to complete or estimated profits on uncompleted lump-sum contracts are management's best estimate based on facts and circumstances at that time.</div></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Deferred Costs</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We capitalize costs associated with contracts that will generate future revenues from energy savings. These contracts will span between five and ten years.  These deferred costs are amortized as a component of cost of revenue over the life of the contract, using the straight-line method.  We evaluate deferred costs regularly on our projects that we have expended resources on. If, after a period of service, the deferred cost does not meet our or client's expectations, then we record an impairment expense on our statement of income.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"><br /></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Impairment of long-lived assets</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We account for impairment of plant and equipment and amortizable intangible assets in accordance with the standard of "Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of", which requires us to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset's (or asset group's) fair value.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Concentration of Customers</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">For the year ended December 31, 2012, one customer accounted for approximately 97% of our total contract revenue. For the year ended December 31, 2011, we had two customers that, in total, represented 85% of our contract revenue.  Based upon the change of our business strategy, we will seek to conduct business with customers in high energy cost metropolitan areas.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Share-Based Compensation</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We account for equity based compensation transactions with our employees under the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic No. 718, "Compensation, Stock Compensation" ("Topic No. 718").  Topic No. 718 requires the recognition of the fair value of equity-based compensation in net income.  The fair value of our option based equity instruments are estimated using a Black-Scholes option valuation model.  This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award.  In addition, the calculation of equity-based compensation costs requires that we estimate the number of awards that will be forfeited during the vesting period.  The fair value of equity-based awards granted to our employees is amortized over the vesting period of the award and we elected to use the straight-line method for awards granted after the adoption of Topic No. 718.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We account for equity based transactions with non-employees under the provisions of ASC Topic No. 505-50, "Equity-Based Payments to Non-Employees" ("Topic No. 505-50").  Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div></div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Income taxes</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We follow Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 109, ASC 740- "Accounting for Income Taxes" ("ASC 704").  This standard requires the use of an asset and liability approach for financial accounting for and reporting of income taxes.  If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.</div></div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Earnings Per Share</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of shares of our common stock outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if our share-based awards and convertible securities, if any, were exercised or converted into common stock.  The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. For the year ended December 31, 2011, there were no common stock equivalents.  For the year ended December 31, 2012, all common stock equivalents were anti-dilutive.</div></div><div style="text-align: center; line-height: 14.3pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Recently Issued Accounting Pronouncements</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We do not believe any recently issued accounting pronouncements issued by the FASB and the SEC will have a material impact on our present or future consolidated financial statements.</div></div></div>
992000
10000000
30000000
10
20000
187500
0
0
14
206055
0
0
206069
137379
2
17998
0
0
18000
19
5981
0
0
6000
-4304003
-2188481
4424
3640178
-50000
-2121533
1473069
4440
19183401
0
-21376322
4459
19189382
0
-23497844
<div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Estimates</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Management uses estimates and assumptions in preparing financial statements.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from those estimates.  Costs to complete or estimated profits on uncompleted lump-sum contracts are management's best estimate based on facts and circumstances at that time.</div></div>
44557503
44369524
56513
0
0
11719170
0
-50000
356753
0
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 3. Major Agreements</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On November 2, 2010, we entered into a lighting retrofit and maintenance agreement (the "Riverbay Agreement") to provide energy management lighting installation and services to Riverbay Fund, Inc. ("Riverbay"), the management company of Co-op City, located in Bronx, a borough of New York City. The Riverbay Agreement entails replacing and retrofitting over 6,000 lighting fixtures and elements and installing 205 new fixtures in eight parking structures within Co-op City. Project inception was subject to final approval from the New York State Energy Research and Development Authority ("NYSERDA") under the American Recovery and Reinvestment Act, which was obtained in March 2011. The agreement became effective on the date of execution and its term shall end ten years from the date of substantial completion of installation by GEM of the fixtures, which substantial completion shall occur when GEM has installed 80% of the fixtures. We have received $800,000, based upon meeting certain installation milestones, from a grant received by Riverbay.  Prior to us entering into the Assignment Agreement (as discussed below), we were scheduled to receive during the term of the Riverbay Agreement an additional amount of approximately $22,000 per month, to be adjusted based upon the actual savings on the project.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On November 15, 2011, GEM entered into an Assignment, Assumption and Indemnity Agreement (the "Assignment Agreement") with a certain unaffiliated third party (the "Assignee"), pursuant to which GEM sold to the Assignee for the purchase price of $992,000 the energy conservation measures, together with the accounts receivables, equipment and related assets, under the Riverbay Agreement, related to the Co-op City project.  The purpose of the Assignment Agreement was for GEM to monetize total projected revenues of approximately $1,900,000 under the Riverbay Agreement in order to provide GEM with immediate cash liquidity.  GEM will continue to be responsible for all work, obligations, liabilities, claims and expenses required by the Riverbay Agreement.  Under the Assignment Agreement, as of December 31, 2012, GEM has received approximately $316,200 of the purchase price.  Subject to and upon the satisfaction of the terms and conditions of the Assignment Agreement, including Assignee's lender approval and funding conditions which have not been satisfied to date, GEM expects to receive the balance of the purchase price.  We can provide no assurances that these conditions will be satisfied.  We caution investors against making investment decisions based on any expectation that the balance of the purchase price will be paid to GEM.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Effective as of October 12, 2010, we entered into a license and marketing agreement with Green RG Management, LLC and its affiliates (collectively, "Green RG") pursuant to which we acquired a license to market exclusively and distribute patented and proprietary light-emitting diode technology from Green RG, in exchange for between 10 million and 30 million restricted shares of our common stock, based on the achievements of certain performance thresholds. Under the agreement, we were obligated to issue to Green RG 10 million restricted shares of our common stock, which shares will be fully vested once GEM has entered into bona fide written agreements to sell Green RG Products, generated as a result of opportunities presented to GEM by the licensors, having a value of at least $25 million.  This Agreement was terminated during 2012 and no shares have been issued to Green RG.  In connection with the execution of this agreement, we formed a new subsidiary, GEMRG, Inc. </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Please also see Note 8. Debt and Warrants Issuance</div></div>
0
0
50000
0
50000
0.90
1.50
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 10. Warrants</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">As described above in Notes 8 and 9, we issued 23,711,052 warrants as additional consideration for the notes that we issued on December 31, 2012.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">A summary of warrant activities for the years ended December 31, 2012 and 2011 is reflected below:</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;"> </div></div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Warrants</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Weighted Average</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Exercise Price</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Weighted Average<font style="display: inline;"> Remaining</font></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Life</div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: normal; margin-right: 0pt;">(Years)</div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"><div> </div></td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Outstanding at December 31, 2010</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="white"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Granted</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>7,834,896</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>1.40</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Exercised</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="white"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Forfeited</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Outstanding at December 31, 2011</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>7,834,896</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>1.40</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>3.17</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="white"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Granted</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>23,711,052</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>0.003</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Exercised</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="white"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Forfeited</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>−</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="text-align: left; text-indent: 0pt; width: 64%; margin-left: 0pt; margin-right: 0pt;"><div><div style="text-align: left; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Outstanding at December 31, 2012</div></div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>31,545,948</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div>$</div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>0.35</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;"><div>2.79</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"><div> </div></td></tr></table></div></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The warrants outstanding at December 31, 2012 have an intrinsic value of $408,431.  The weighted average grant date fair value for the warrants issued during the year ended December 31, 2012 was $0.02.  The weighted average grant date fair value for the warrants issued during the year ended December 31, 2011 was $1.50.</div></div>
<div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> <font style="display: inline; font-weight: bold;">Note 1. Description of Business and Organization and Going Concern</font></div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Description of Business and Organization</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Overview</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Green Energy Management Services Holdings, Inc. (f/k/a CDSS Wind Down Inc.) (which, together with its consolidated subsidiary, Green Energy Management Services, Inc. ("GEM"), is referred to as the "Company", "we", "us" or "our") was incorporated pursuant to the laws of the State of Delaware in December 1996 under the name "Citadel Security Software Inc."  We changed our name to "CDSS Wind Down Inc." on December 12, 2006 following a sale of substantially all of our assets to McAfee, Inc. on December 4, 2006 (the "McAfee Transaction"). Following the McAfee Transaction, we had no active business operations.  On August 20, 2010, our subsidiary, created for the sole purpose of merging with GEM (the "Merger Sub") merged with and into GEM (the "Merger"), and GEM, as the surviving corporation, became our wholly-owned subsidiary.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We are a full service energy management company based in Baton Rouge, Louisiana.  In late 2010 and early 2011 we underwent a significant shift in our business strategy away from the Southside's former contracting business to the new business strategy of Energy Efficiency products and system (as discussed below).  As a result, all of our resources have been devoted to procuring new contracts pursuant to the new strategy.  We currently use commissioned sales representatives to market our products and services. Our two functional businesses are energy saving lighting products utilizing LED's (Light Emitting Diodes) and the GEM Water Management System which utilizes water reduction techniques (collectively, "Energy Efficiency"). We have successfully deployed these savings measures at Co-op City in the Bronx, New York, one of the world's largest cooperative housing developments spread out among 15,000 residential units and 35 high rise buildings.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We provide our clients all forms of solutions to maximize the level of Energy Efficiency which can be achieved given the current technologies available to GEM mainly based in two functional areas: (i) energy efficient lighting upgrades and (ii) water system solutions.  We are primarily engaged in the energy management of energy efficient lighting units to end users who utilize substantial quantities of electricity.  We maintain our business operations on a nationwide basis, energy managing products and services to municipal and commercial customers.  We purchase products from outside suppliers and utilize outside contractors to complete customer projects.  Industry participants focus on assisting clients to effectively maximize Energy Efficiency.  We also provide our clients with water conservation solutions, primarily under long-term, fixed-price contracts, offering them water valve technology, which has the ability to reduce residential and commercial water usage.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Share Exchange with Southside Electric Corporation, Inc.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On May 15, 2010, GEM entered into a Share Exchange Agreement with Southside and the stockholders of Southside (the "Southside Stockholders"), pursuant to which the Southside Stockholders transferred all of the issued and outstanding capital stock of Southside to GEM in exchange for an aggregate of 4,376,341 shares of common stock of GEM, which constituted 9.9% of the issued and outstanding capital of GEM (the "Share Exchange").  Prior to the Share Exchange, GEM was a shell company without any assets or activities.  Following the Share Exchange, GEM succeeded to the business of Southside as its sole line of business.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Share Exchange with Green Energy Management Services, Inc.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On March 29, 2010, we entered into a merger agreement with GEM and Merger Sub (each capitalized term as defined in Note 3 below). On August 20, 2010, pursuant to the terms of a merger agreement, the Merger Sub merged with and into GEM. GEM, as the surviving corporation, became our wholly-owned subsidiary. As a result of the merger (as defined in Note 3), each issued and outstanding share of GEM's common stock was automatically converted into 0.352 shares of our common stock, resulting in the issuance of an aggregate of 35,169,176 restricted shares of our common stock to the former stockholders of GEM. Following the Merger, we succeeded to the business of GEM as our sole line of business and changed our name to "Green Energy Management Services Holdings, Inc."</div><div style="text-align: center; line-height: 14.3pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Reverse Stock Split</div><div style="text-align: left; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">On October 15, 2012, we effected a 1-for-10 reverse stock split of all of our issued and outstanding shares of common stock (the "Reverse Stock Split"), which was previously approved by our Board of Directors and shareholders. Upon the effectiveness of the Reverse Stock Split, (i) every ten shares of our outstanding common stock was decreased to one share of common stock, (ii) the number of shares of common stock into which each outstanding warrant or option to purchase common stock is exercisable was proportionally decreased on a 1-for-10 basis, and (iii) the exercise price of each outstanding warrant or option to purchase common stock was proportionately increased on a 1-for-10 basis. Our common stock began trading on the OTCQB on a reverse split basis on October 16, 2012. All of the share and per share numbers, share prices and exercise prices have been adjusted within these financial statements, on a retroactive basis, to reflect this 1-for-10 reverse stock split.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Going Concern</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, we have generated minimal revenues, and we have a working capital deficit of $4,890,939 at December 31, 2012. These factors raise substantial doubt about our ability to continue as a going concern.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Our ability to continue existence is dependent upon our continuing efforts to implement our new business strategy, management's ability to achieve profitable operations and upon our ability to obtain additional financing to carry out our business operations. We intend to fund our operations through equity and/or debt financing arrangements, any revenues generated in the future and any loan arrangements that may be provided to us by our affiliates. However, there can be no assurance that these arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other cash requirements. The outcome of these matters cannot be predicted at this time.</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.</div></div>
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 7. Deferred Project Costs</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 45pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">We have incurred costs associated with three in-process efficiency lighting and water conservation projects as of December 31, 2012. Cost items consist of materials and labor costs to purchase and install products purchased from outside vendors and either are installed or pending installation.  At December 31, 2012, the total costs incurred, net of 2012 amounts amortized and written off, total approximately $609,000, of which approximately $33,400 and approximately $575,600 are classified as current and long-term, respectively, on our consolidated balance sheets.  At December 31, 2011, the total costs incurred totaled approximately $692,000, of which approximately $46,000 and approximately $646,000 were classified as current and long-term, respectively, on our consolidated balance sheets.  Unsuccessful project costs are written off and recorded in cost of revenue earned.  During 2012, we amortized approximately $34,000 of these costs to cost of revenue earned and wrote off approximately $57,000 of these costs upon our determination that certain projects would be unsuccessful.  During 2011, we amortized approximately $34,000 of these costs to cost of revenue earned and wrote off approximately $32,000 of these costs upon our determination that certain projects would be unsuccessful.</div></div>
<div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Note 12. Accrued Liabilities</div><div style="text-align: justify; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The details of accrued liabilities at December 31, 2012 and December 31, 2011 are as follows:</div><div style="text-align: left; line-height: 11.4pt; text-indent: 36pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31,</div><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2012</font></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td valign="bottom" style="padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td><td colspan="2" valign="bottom" style="border-bottom: black 2px solid;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">December 31,</div><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">2011</font></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; font-family: times new roman; font-size: 10pt; font-weight: bold;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued startup expenses</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">3,292</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">6,496</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued salaries and benefits</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">955,179</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">884,974</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued interest</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">102,937</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">53,511</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td valign="bottom" style="width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued consulting fees</div></td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">1,927,029</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">1,018,597</td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="#cceeff"><td valign="bottom" style="padding-bottom: 2px; width: 76%;"><div style="text-align: justify; line-height: 11.4pt; text-indent: -9pt; display: block; font-family: times new roman; margin-left: 9pt; font-size: 10pt; margin-right: 0pt;">Accrued rent</div></td><td valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">54,875</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 2px solid; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">54,875</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr><tr bgcolor="white"><td valign="bottom" style="padding-bottom: 4px; width: 76%; font-family: times new roman; font-size: 10pt;">  </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">3,043,312</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td><td valign="bottom" style="border-bottom: black 4px double; text-align: left; width: 1%; font-family: times new roman; font-size: 10pt;">$</td><td valign="bottom" style="border-bottom: black 4px double; text-align: right; width: 9%; font-family: times new roman; font-size: 10pt;">2,018,453</td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; width: 1%; font-family: times new roman; font-size: 10pt;"> </td></tr></table></div><div style="text-align: center; line-height: 11.4pt; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"> </div><div style="text-align: justify; line-height: 11.4pt; text-indent: 36pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Since June 30, 2011, to the date of this Annual Report on Form 10-K, all of our officers, directors and employees have agreed to defer a substantial portion of their compensation due from us.  In addition, our Chairman, President and CEO had deferred his entire salary due from April 7, 2011 to the date of this Annual Report.  In addition, certain of our consulting expenses were being deferred through December 31, 2012 by a member of our Board of Directors (the "Board") and management.  As of December 31, 2012, total deferred salaries totaled approximately $955,000.  Total consulting expenses accrued are approximately $1,927,000.  We plan to pay the deferred salaries and advanced expenses with proceeds from borrowings, the possible sale of energy efficiency contracts owned by us or with our common stock.</div></div>
6000
10300
3
57000
32000
3292
6496
100000
22000
P3Y
0.3
0.05
0.05
2
4376341
0.099
0.352
35169176
4890939
P5Y
P10Y
1
2
6000
205
15000
35
8
13
P10Y
0.8
800000
316200
22000
6000
52540
5
0
50000
50000
0
1.40
0.35
1.40
0.003
0
0
0
0
408431
200000000
50000
P48M
10949490
1
549120
60000
P4Y
P1Y
15000
25000
15000
75000
0.001
P12M
0.1
0.05
P14M
P8M