Nature of Business

12 Months Ended

Dec. 31, 2012

Nature of Business

Note 1 Nature of Business

Gateway Energy Corporation (the “Company,” “Gateway,” “we,” or “our”), a Delaware corporation, was incorporated in 1960 and entered its current business in 1992.  Gateway's common stock is traded in the over-the-counter market on the bulletin board section under the symbol GNRG.  Gateway is engaged in the midstream natural gas business.  We own and operate natural gas distribution, gathering and transportation pipeline systems located onshore in the continental United States and offshore in federal and state waters of the Gulf of Mexico.

Gateway conducts all of its business through its wholly owned subsidiary companies, Gateway Pipeline Company, Gateway Offshore Pipeline Company, Gateway Energy Marketing Company, Gateway Processing Company, Gateway Pipeline USA Corporation, Gateway Delmar LLC, Gateway Commerce LLC and CEU TX NPI, L.L.C.  Gateway-Madisonville Pipeline, L.L.C. is 67% owned by Gateway Pipeline Company and 33% owned by Gateway Processing Company.  Access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, our Code of Ethics and current reports on Form 8-K are available at Gateway's website, www.gatewayenergy.com. 

The Company had available cash of $33,631 at December 31, 2012.  In addition, as of December 31, 2012, the Company had current debt obligations of $2,557,674 and current asset retirement obligations of $595,534.  Based on the Company's current cash position and its projected cash flows from operations, the Company will not have the ability to repay its existing debt obligations, committed capital expenditures and asset retirement obligations unless it is able to obtain additional financing or raise cash through other means, such as asset sales.  If the Company is unsuccessful in those efforts, the Company may be unable to continue its operations.

On February 13, 2013, the Company closed a series of transactions to further enhance its liquidity (See Note 12, Subsequent Events).  Furthermore, the Company is engaged with its lender to extend its current credit facility.  There is no guarantee that these discussions will produce an amendment satisfactory to all parties.

The Company is actively exploring potential sources of capital to allow it to fund a combination of debt service and asset retirement obligations and to accelerate the implementation of its growth strategy.  Any new capital may take several forms.  There is no guarantee that it will be able to raise outside capital.