Principles of Consolidation, Organization and Nature of Operations

12 Months Ended

Dec. 31, 2013

Principles of Consolidation, Organization and Nature of Operations

1. Principles of Consolidation, Organization and Nature of Operations

Real Goods Solar, Inc. (“RGS” or “Company”) is a leading residential and commercial solar energy engineering, procurement, and construction firm. The Company was incorporated in Colorado on January 29, 2008 under the name Real Goods Solar, Inc. The Company’s initial public offering of common stock occurred on May 7, 2008. On January 15, 2014, the Company began doing business as RGS Energy and changed its ticker symbol to RGSE on February 24, 2014.

The consolidated financial statements include the accounts of Real Goods Solar and its wholly-owned subsidiaries. RGS has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, which include the Company’s accounts and those of its subsidiaries. Intercompany transactions and balances have been eliminated. The Company has included the results of operations of acquired companies from the effective date of acquisition.

Liquidity Update

At December 31, 2013, the Company’s cash balance was $12.4 million. The Company’s related party debt of $2.7 million owed to Gaiam, Inc. (“Gaiam”) was repaid on November 5, 2013 while its related party debt of $4.15 million owed to Riverside Renewable Energy Investments, LLC (“Riverside”) was extended; $1.0 million is due April 26, 2014, $3.0 million is due September 3, 2014 and $150,000 is due October 29, 2014. During September, 2013, RGS entered into the Fifth Loan Modification Agreement with Silicon Valley Bank (“SVB”), which extended the revolving line of credit maturity date to September 29, 2014 and provided RGS with a $2.0 million term loan.

NASDAQ Non-Compliance

During 2012, the Company received four different non-compliance notices from The Nasdaq Stock Market (“NASDAQ”). The Company regained compliance as of February 21, 2013.