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Organization of the Company and Going Concern
6 Months Ended
Jun. 30, 2014
Organization of the Company and Going Concern [Abstract]  
Organization of the Company and Going Concern

Note 2. Organization of the Company and Going Concern

 

Organization of the Company

 

We were incorporated pursuant to the laws of the State of Delaware in December 1996.  GEM was incorporated pursuant to the laws of the State of Delaware in March 2010.  We are a full service energy management company based in New York, New York engaged in the business of Energy Efficiency products and system (as discussed below) through GEM, our operating subsidiary.   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 conservation technology (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.

 

We offer our clients all forms of solutions to maximize the level of Energy Efficiency which can be achieved given the current technologies available to us mainly based in two functional areas: (i) energy efficient lighting upgrades and (ii) water management system solutions.  For the energy saving lighting products market, we provide energy efficient lighting units and services to end users who utilize substantial quantities of electricity.  Our energy managing products and services are primarily sold to municipal and commercial customers.   For the water conservation technology market, we 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.  We generally install all of our clean technology at our cost and our revenues are derived from the shared savings with the owner of the project.  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.  

 

In the Energy Efficiency arena, we concentrate our marketing efforts within geographic regions exhibiting higher than average per kilowatt hour utility rates and water utilization rates and having energy customers who consume higher than average quantities of energy and water.  We develop an Energy Efficiency/energy management program which, potentially, provides end-users alternatives to decrease their energy consumption.  Additionally, in many instances, we assume the management and maintenance of our clients’ lighting needs which affords our clients greater labor efficiencies.  Our water conservation solutions typically do not require further maintenance during the life of the contract.

 

Going Concern

 

The accompanying unaudited consolidated financial statements included herein 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 unaudited consolidated financial statements, we have generated a net loss of $515,689 in the first six months of 2014 and we have a working capital deficit of $4,517,967 as of June 30, 2014.  These factors raise substantial doubt about our ability to continue as a going concern.

 

Our ability to continue our existence and business operations is dependent upon our continuing efforts to implement our new business strategy, management’s ability to achieve meaningful profitable operations and/or upon our ability to obtain additional financing to carry out our business plan.  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, if any, 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.

 

The accompanying unaudited 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.