Lime Energy (LMEC) 10-Q 12 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 12, 2015
Document and Entity Information
Entity Registrant Name	LIME ENERGY CO.
Entity Central Index Key	1,065,860
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		9,564,148
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents	$ 6,756	$ 5,473
Restricted cash	1,300	500
Accounts receivable, less allowance for doubtful accounts of $1,516 and $1,794, respectively	22,010	11,820
Inventories	2,242	176
Costs and estimated earnings in excess of billings on uncompleted contracts	9,053	7,407
Prepaid expenses and other	1,581	619
Current assets of discontinued operations	301	613
Total Current Assets	43,243	26,608
Net Property and Equipment	1,856	1,470
Long-Term Receivables	1,273	710
Intangible Assets, net	5,154
Deferred Financing Costs, net	156	22
Goodwill	8,173	6,009
Total Assets	59,855	34,819
Current Liabilities
Accounts payable	22,588	13,341
Accrued expenses	3,846	1,245
Billings in excess of costs and estimated earnings on uncompleted contracts	1,402	705
Customer deposits	642	512
Other current liabilities	11	11
Current portion of long-term liabilities	16
Current liabilities of discontinued operations	135	806
Total Current Liabilities	28,640	16,620
Long-Term Debt - Related Party	7,380
Derivative Liability - Related Party	6,489
Total Liabilities	$ 42,509	$ 16,620
Commitments and Contingencies
Contingently redeemable Series C Preferred stock, $0.01 par value: 10,000 shares authorized, issued and outstanding (includes accured dividends)	$ 10,367	$ 9,633
Stockholders' Equity
Common stock, $.0001 par value; 50,000,000 shares authorized 9,564,148 and 9,460,090 issued and outstanding as of September 30, 2015 and December 31, 2014, respectively	1	1
Additional paid-in capital	209,558	208,916
Accumulated deficit	(202,580)	(200,351)
Total Stockholders' Equity	6,979	8,566
Total Liabilities and Stockholders' Equity	$ 59,855	$ 34,819

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,516	$ 1,794
Redeemable preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Redeemable preferred stock, shares authorized	10,000	10,000
Redeemable preferred stock, shares issued	10,000	10,000
Redeemable preferred stock, shares outstanding	10,000	10,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	9,564,148	9,460,090
Common stock, shares outstanding	9,564,148	9,460,090

Condensed Consolidated Statemen

Condensed Consolidated Statement of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statement of Operations
Revenue	$ 32,160	$ 15,585	$ 82,409	$ 41,456
Cost of sales	21,125	10,735	55,003	28,462
Gross Profit	11,035	4,850	27,406	12,994
Selling, general and administrative	9,352	4,887	24,571	14,463
Acquisition costs	529		1,467
Amortization of intangibles	285		594
Operating income (loss)	869	(37)	774	(1,469)
Other Income (Expense)
Interest income	43	27	114	66
Interest expense - Related Party $301 and $784 thousand for the three and nine months ended September 30, 2015, respectively.	(322)	(35)	(825)	(35)
Extinguishment of debt - Related Party			(1,420)
Gain (loss) from change in derivative liability - Related Party	1,272		(814)
Total other income (expense)	993	(8)	(2,945)	31
Income (Loss) from continuing operations before income taxes	1,862	(45)	(2,171)	(1,438)
Income tax (expense) benefit	(3)		1,165
Income (loss) from continuing operations	1,859	(45)	(1,006)	(1,438)
Discontinued Operations:
(Loss) Income from operation of discontinued business	(46)	136	(267)	187
Net Income (loss)	1,813	91	(1,273)	(1,251)
Preferred stock dividends	(336)	(521)	(956)	(2,474)
Net income (loss) available to common stockholders	$ 1,477	$ (430)	$ (2,229)	$ (3,725)
Basic earnings (loss) per common share from
Continuing operations (in dollars per share)	$ 0.15	$ (0.15)	$ (0.20)	$ (1.05)
Discontinued operations (in dollars per share)	0	0.04	(0.03)	0.05
Basic earnings ( loss ) per common share (in dollars per share)	$ 0.15	$ (0.11)	$ (0.23)	$ (1)
Weighted-average common shares outstanding - Basic	9,564	3,760	9,539	3,738
Diluted earnings (loss) per common share from
Continuing operations (in dollars per share)	$ 0.05	$ (0.15)	$ (0.20)	$ (1.05)
Discontinued operations (in dollars per share)	0	0.04	(0.03)	0.05
Diluted earnings ( loss ) per common share (in dollars per share)	$ 0.05	$ (0.11)	$ (0.23)	$ (1)
Weighted-average common shares outstanding(in shares) - Diluted	17,697	3,760	9,539	3,738

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Condensed Consolidated Statement of Operations
Interest expense - Related Party	$ 301	$ 784

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2014	$ 1	$ 208,916	$ (200,351)	$ 8,566
Balance (in shares) at Dec. 31, 2014	9,460
Increase (Decrease) in Stockholders' Equity
Dividends on Series C Preferred Stock			(956)	(956)
Shares issued for benefit plans (in shares)	12
Share based compensation		642		642
Share based compensation (in shares)	92
Net loss			(1,273)	(1,273)
Balance at Sep. 30, 2015	$ 1	$ 209,558	$ (202,580)	$ 6,979
Balance (in shares) at Sep. 30, 2015	9,564

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows From Operating Activities
Net loss	$ (1,273)	$ (1,251)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Provision for bad debt	426	688
Share-based compensation	642	237
Depreciation and amortization	1,230	546
Amortization of deferred financing costs	39
Change in derivative liability - Related Party	814
Loss on extinguishment of debt - Related Party	1,420
Deferred income tax benefit	(1,246)
Interest on Sub Notes added to principal - Related Party	28
Amortization of original issue discount - Related Party	98
Establishment of restricted funds to release Letter of Credit	(1,300)
Release of restricted funds	500
Changes in assets and liabilities:
Accounts receivable	(4,706)	(2,021)
Inventories	239
Costs and estimated earnings in excess of billings on uncompleted contracts	(1,646)	(2,080)
Prepaid expenses and other	(767)	(265)
Assets of discontinued operations	312	1,710
Accounts payable	5,266	1,826
Accrued expenses	1,843	(1,648)
Billings in excess of costs and estimated earnings on uncompleted contracts	639	(1,306)
Customer deposits and other current liabilities	64	(2,518)
Liabilities of discontinued operations	(671)	(2,111)
Net cash provided by (used in) operating activities	1,951	(8,193)
Cash Flows From Investing Activities
Acquisition of EnerPath	(11,000)
Purchases of property and equipment	(777)	(443)
Capitalization of Product Software	(153)
Net cash used in investing activities	(11,930)	(443)
Cash Flows From Financing Activities
Proceeds from issuance of convertible notes - Related Party	11,750	1,000
Proceeds from issuance of preferred stock		2,000
Costs related to preferred stock issuances		(11)
Payments on vehicle financing	(8)
Deferred financing costs	(480)
Net cash provided by financing activities	11,262	2,989
Net Increase (Decrease) in Cash and Cash Equivalents	1,283	(5,647)
Cash and Cash Equivalents, at beginning of period	5,473	6,940
Cash and Cash Equivalents, at end of period	6,756	1,293
Supplemental Disclosure of Cash Flow Information
Preferred dividends satisfied through issuance of preferred stock:		943
Cash paid during the period for interest:
Continuing operations	651	$ 3
Warrants issued for deferred financing fees:	$ 31

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2015
Basis of Presentation
Basis of Presentation	Note 1 — Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) of Lime Energy Co. (“Lime Energy” and, together with its subsidiaries, the “Company”, “we”, “us” or “our”) have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”) and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In our opinion, however, the Financial Statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position, results of operations and cash flows as of and for the interim periods. The results of operations for the three- and nine-month periods ended September 30, 2015 and 2014 are not necessarily indicative of the results to be expected for the full year. As more fully described in Note 6—“Subordinated Convertible Term Notes” below, on March 24, 2015 (the “Note Issuance Date”), the Company issued to Bison Capital Partners IV, L.P. (“Bison”) a subordinated convertible note due March 24, 2020 in the principal amount of approximately $11.7 million (the “Note”). As set forth in the Note, beginning with the quarter ending March 31, 2016, the Company must meet certain rolling twelve-month Adjusted EBITDA targets, as defined in the Note, or otherwise be in breach of its covenants under the Note. Any breach of covenant would create an event of default, which could cause acceleration of the Note’s maturity. The Adjusted EBITDA target for the twelve months ending March 31, 2016 is $6.3 million. Achievement of this target will depend on many factors including the amount, timing, and profitability of future revenues and the integration efforts related to the recent acquisition of EnerPath International Holding Company (“EnerPath”), among other things. In the event the Company does not meet the covenant and the Note holders accelerate payment of the Note and interest, the Company will likely be required to refinance the Note with other debt or equity or sell assets. There can be no assurance that the Company will be able to do so on favorable terms or at all. The December 31, 2014 balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. For further information, refer to the audited financial statements and the related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Starting on March 24, 2015, the date of the acquisition of EnerPath, the results of EnerPath’s operations have been consolidated with our results. For a more complete discussion of the EnerPath acquisition, refer to Note 5—“Acquisition of EnerPath” below.

Share-Based Compensation

Share-Based Compensation	9 Months Ended
	Sep. 30, 2015
Share-Based Compensation
Share-Based Compensation	Note 2 - Share-Based Compensation The Compensation Committee of the Board of Directors of the Company (the “Board”) grants stock options and restricted stock under the Company’s 2008 Long Term Incentive Plan (as amended, the “2008 Plan”). Prior to an amendment to the 2008 Plan that became effective on October 15, 2015, the 2008 Plan provided that up to 407,143 shares of our common stock could be delivered under the plan to certain of our employees, consultants, and non-employee directors. As amended, the 2008 Plan provides for the issuance of up to 1,585,718 shares of our common stock. In addition, the 2008 Plan provides for an automatic annual increase in the number of shares of our common stock reserved under the plan in an amount equal to 35,715 shares. As of September 30, 2015, there were 1,366,029 shares of our common stock reserved for issuance under the 2008 Plan. During the first nine months of 2015, we granted options to purchase 1,217,680 shares under the 2008 Plan, and options to purchase 1,250,920 shares were outstanding under the 2008 Plan as of September 30, 2015. All options granted under the 2008 Plan were granted at a price equal to or greater than the market price of the Company’s stock on the date of grant. Substantially all outstanding stock options under the 2008 Plan vest ratably over three years and expire 10 years from the date of grant. In addition to grants made under the 2008 Plan, the Company gave employees the right to purchase shares at a discount to the market price under the Company’s employee stock purchase plans. Our employee stock purchase plans allow employees of the Company to purchase the Company’s common stock at a discount using payroll deductions and entitles employees in the United States to receive favorable tax treatment provided by the Internal Revenue Code of 1986, as amended. During the first quarter of 2015, our Board adopted, and subsequently our shareholders approved, the Lime Energy Co. 2014 Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 ESPP provided for successive two six-month offering periods commencing on July 1, 2014 and January 1, 2015, respectively. During the second quarter of 2015, our Board adopted, and subsequently our shareholders approved, the Lime Energy Co. 2015 Employee Stock Purchase Plan (the “2015 ESPP”), which became effective on June 18, 2015. The 2015 ESPP provides for the issuance of up to 100,000 shares of common stock in successive two six-month offering periods commencing on July 1, 2015 and January 1, 2016, respectively. As of September 30, 2015, approximately 267 persons were eligible to participate in the 2015 ESPP. In addition to the 2008 Plan, the 2014 ESPP, and the 2015 ESPP, the Board grants restricted stock to non-employee directors under the Company’s 2010 Non-Employee Directors Stock Plan (the “Directors’ Plan”). Restricted stock granted to date under the Directors’ Plan for Board service vest 50% upon grant and 50% on the first to occur of the first anniversary of the grant date, if the director is then still serving on the Board, or the director’s death, disability, or retirement. Restricted stock granted under the Directors’ Plan for committee service vest 50% upon grant and 50% on the first to occur of the first anniversary of the grant date, if the director is then still serving on the committee, or the director’s death, disability, or retirement. During the first nine months of 2015, we granted 92,413 shares of restricted stock under the Directors’ Plan. As of September 30, 2015, there were 284,364 shares of our common stock available for issuance under the Directors’ Plan. The Company accounts for employee share-based awards in accordance with Accounting Standards Codification (“ASC”) 718, which requires companies to measure the cost of employee service received in exchange for a share-based award based on the fair value of the award at the date of grant, with expense recognized over the requisite service period (generally equal to the vesting period of the grant). The following table summarizes the Company’s total share-based compensation expense (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Stock options $ $ ) $ $ ) Restricted stock Employee Stock Purchase Plan — $ $ $ $ The compensation expense to be recognized in future periods with respect to the Company’s employee options and restricted stock is as follows (in thousands): Weighted Average Unrecognized Remaining Compensation Life As of September 30, 2015 Expense (in Months) Stock options $ Restricted stock $

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2015
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note 3 — Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue From Contracts With Customers.” ASU 2014-09 supersedes nearly all existing revenue recognition under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration the Company expects to be entitled to for those goods or services using a defined five-step process. More judgment and estimates may be required to achieve this principle than under existing U.S. GAAP. ASU 2014-09 is effective for annual periods beginning after December 15, 2017, including interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients or (ii) a retrospective approach with the cumulative effect upon initial adoption recognized at the date of adoption which includes additional footnote disclosures. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on the Company’s consolidated financial statements and has not yet determined the method of adoption. In August 2014, the FASB amended the FASB ASC and amended Subtopic 205-40, “Presentation of Financial Statements — Going Concern.” This amendment prescribes that an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will become effective for the Company’s annual and interim reporting periods beginning January 1, 2017. The Company is evaluating the impact of this amendment on its consolidated financial statements; however, the Company does not expect that the adoption of this standard will have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The FASB issued the ASU to simplify the presentation of debt issuance costs, and to align with other existing FASB guidance. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share
Earnings Per Share	Note 4 — Earnings Per Share The Company computes income or loss per share under ASC 260 “Earnings Per Share,” which requires presentation of two amounts: basic and diluted loss per common share. Basic loss per common share is computed by dividing income or loss available to common stockholders by the number of weighted average common shares outstanding, and includes all common stock issued. Diluted earnings include all common stock equivalents. The Company has included outstanding options or warrants, convertible preferred shares, and convertible debt as common stock equivalents in the computation of diluted earnings per share for the three months ended September 30, 2015. The Company has not included these items for the other periods presented as the effect would be anti-dilutive. The following table sets forth the basic and diluted earnings (loss) per common share: Three Months Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 Earnings (Loss) Per Share - Basic Income (loss) from continuing operations $ $ ) $ ) $ ) Less: Preferred stock dividends ) ) ) ) Income available to common stockholders ) ) ) (Loss) Income from operation of discontinued operations ) ) Net income (loss) available to common stockholders $ $ ) $ ) $ ) Weighted average common shares outstanding - Basic Basic earnings (loss) per common share $ $ ) $ ) $ ) Earnings (Loss) Per Share - Diluted Net income (loss) available to common stockholders $ $ ) $ ) $ ) Less: Gain from change in derivative liability ) — — — Add: Preferred stock dividends — — — Add: Interest on convertible term notes — — — Net income (loss) applicable to dilutive common stock $ $ ) $ ) $ ) Weighted average common shares outstanding - Basic Effect of dilutive securities Dilutive stock awards — — — Dilutive preferred share conversions — — — Dilutive debt conversions — — — Weighted average common shares outstanding - Diluted Diluted earnings (loss) per common share $ $ ) $ ) $ )

Acquisition of EnerPath

Acquisition of EnerPath	9 Months Ended
	Sep. 30, 2015
Acquisition of EnerPath
Acquisition of Enerpath	Note 5 — Acquisition of EnerPath On March 24, 2015, the Company acquired EnerPath, a California-based provider of software solutions and program administration for utility energy efficiency programs. The consideration paid in connection with the EnerPath acquisition was approximately $11 million in cash with $1.0 million held in escrow, subject to adjustment as set forth in the Agreement and Plan of Merger by and among the Company, EIHC Merger Sub, Inc., a wholly-owned subsidiary of the Company, EnerPath, and the EnerPath stockholders. The purchase price adjustment indemnification escrow of $250 thousand was released on June 25, 2015, together with the $75 thousand escrow that had been set aside to cover expenses of the stockholders’ representative. An amount equal to approximately $629 thousand remains in escrow to cover any post-closing indemnification. The approximate fair values of the assets acquired and liabilities assumed related to the acquisition are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as we finalize the valuations of the assets acquired and liabilities assumed. Such changes could result in material variances between the Company’s future financial fair values recorded and expenses associated with these items, including variances in the estimated purchase price. The following table summarizes the preliminary adjusted fair values of the assets acquired and liabilities assumed at the date of the closing of the acquisition (in thousands). Current assets $ Property and equipment Other assets Intangible assets - finite life Goodwill Total assets acquired Current Liabilities assumed ) Deferred income tax liability ) Net assets acquired $ The preliminary estimate of intangible assets acquired from EnerPath, the acquired intangible asset categories, fair value and average amortization periods are as follows (in thousands): Estimated Average Annual Amortization Amortization Fair Value Method/Period Expense Customer relationships $ Cash flow/7 years $ Enerworks System Software 4 years Trade name 3 years $ $ The following unaudited pro forma information represents the Company’s results of operations as if the acquisition had occurred on January 1, 2014 (in thousands, except per share data): Nine-months ended September 30, 2015 2014 Revenue $ $ Loss from continuing operations $ ) $ ) (Loss) Income from operation of discontinued business ) Net loss $ ) $ ) Preferred stock dividends ) ) Net loss available to common stockholders $ ) $ ) Basic and Diluted (loss) earnings Per Common Share From Continuing operations $ ) $ ) Discontinued operations ) Basic and Diluted Loss Per Common Share $ ) $ ) Weighted Average Common Shares Outstanding The pro forma results have been prepared for informational purposes only and include adjustments to amortize acquired intangible assets with finite life, eliminate acquisition-related expenses, and reflect additional interest expense on debt used to fund the acquisition. These pro forma results do not purport to be indicative of the results of operations that would have occurred had the purchase been made as of the beginning of the periods presented or of the results of operations that may occur in the future. Acquisition costs on the Unaudited Condensed Consolidated Statements of Operations are comprised of acquisition expenses, including legal, accounting, and banking expenses.

Subordinated Convertible Term N

Subordinated Convertible Term Notes	9 Months Ended
	Sep. 30, 2015
Subordinated Convertible Term Notes
Subordinated Convertible Term Notes	Note 6 — Subordinated Convertible Term Notes 2015 Convertible Debt Financing to Fund the EnerPath Acquisition — Related Party To finance the purchase price for the acquisition of EnerPath (described in Note 5—“Acquisition of EnerPath” above), the Company entered into a Note Purchase Agreement, dated March 24, 2015 (the “Note Purchase Agreement”) with Bison, pursuant to which the Company issued the Note. The proceeds from the sale of the Note were used to finance the EnerPath acquisition and to pay $0.9 million of fees and expenses incurred in connection therewith, including fees and expenses incurred in connection with the Note Purchase Agreement, which were capitalized and included as a discount to long-term debt. As of the date the Note was issued, Bison owned 10,000 shares of the Company’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”), which was, as of that date, convertible into approximately 30% of the Company’s common stock, making Bison the Company’s single largest stockholder. Two members of the Company’s Board, Andreas Hildebrand and Peter Macdonald, are partners of an affiliate of Bison. Mr. Hildebrand and Mr. Macdonald recused themselves from the Board’s consideration of the Note issuance. The Note is guaranteed by each subsidiary of the Company, including EnerPath and each of EnerPath’s subsidiaries, and is secured by a lien on all of the assets of the Company and each of its subsidiaries. The Company may not elect to prepay the Note. Based upon the initial conversion price of the Note ($3.16), all or any portion of the principal amount of the Note, plus, subject to the terms of the Note, any accrued but unpaid interest, but not more than the principal amount of the Note, may, at the election of the Note holder, be converted into 3,718,354 shares of common stock after March 24, 2018 or the occurrence of a change of control of the Company, whichever occurs first. The conversion price is subject to anti-dilution adjustments in connection with stock splits and similar occurrences and certain other events set forth in the Note, including future issuances of common stock or common stock equivalents at effective prices lower than the then-current conversion price. Due to the terms of the anti-dilution provision, the Company separated this conversion feature from the debt instrument and accounts for it as a derivative liability that must be carried at its estimated fair value with changes in fair value reflected in the Company’s Consolidated Statements of Operations. Upon issuance, the initial estimate of fair value was established as both a derivative liability and as a discount on the Note. That discount, absent the Note amendment described below, would have been amortized to interest expense over the term of the Note. The Company determined the estimated fair value of the derivative liability to be $5.6 million and $6.4 million as of the Note issuance date and September 30, 2015, respectively. The fair value of the derivative liability was determined using a binomial option pricing model with the following assumptions: a risk-free rate of 1.36%; expected volatility of 77%; a maturity date of March 24, 2020; probability factors regarding the Company’s ability to meet the EBITDA covenants in the Note; and a 0% probability that a future financing transaction would reduce the conversion price. The Note was amended on March 31, 2015 (the “Note Amendment”), primarily to change certain interest and financial covenant terms. Under the Note Amendment, the Company may, at its option, pay in cash semi-annually interest on the outstanding principal amount at a rate of 10.5% per annum; or allow interest to accrue and be added to the principal amount at a rate of 12.5%. Upon the occurrence of an event of default under the terms of the Note, the interest rate increases by 2.0% per annum until the Note is redeemed or the event of default is cured. The Company elected to pay in cash the semi-annual interest payment due in September 2015 of $617 thousand. The Company is subject to certain financial, affirmative and negative covenants, including a minimum EBITDA covenant beginning as of March 31, 2016, as set forth in the Note. Pursuant to the Note Amendment, if certain trailing EBITDA targets are not met as of June 30, 2015, September 30, 2015 or December 31, 2015, an additional $1.0 million of interest for each such quarter in which such EBITDA target is not met, becomes due at the earlier of maturity, redemption or acceleration. As of September 30, 2015, the Company was in compliance with all applicable covenants under the amended Note. The Note, as amended, also limits the original principal amount of the Note that Bison may convert to common stock under the conversion provisions of the Note. Pursuant to prevailing accounting guidance, the Note Amendment, for accounting purposes, was treated as an extinguishment of the original Note and the issuance of a new note, with the conversion derivative left intact and unchanged. Upon extinguishment, the net carrying amount of the extinguished Note (including its principal amount and related discounts and deferred financing costs) of $5.8 million was written off and the fair value of the amended Note was established, resulting in a net charge to earnings in the statement of operations of $1.4 million. The fair value of the amended Note was determined by reference to its probability weighted average expected cash flows discounted at an estimated market interest rate for a hypothetical similar non-convertible note issued by the Company. The March 31, 2015 carrying value of $7.3 million will incur interest charges at an effective interest rate required to result in the ultimate amount of cash flows needed to service the Note. As of March 31, 2015, that effective interest rate was estimated at 25.4% but may change depending on actual cash requirements to service the Note pursuant to the various interest payment alternatives described above. 2014 Notes On August 4, 2014, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with a group of investors including Mr. Richard Kiphart (collectively with the other investors, the “Note Holders”). Pursuant to the terms of the Subscription Agreement, the Note Holders lent the Company $1.0 million under Subordinated Secured Convertible Pay-In-Kind Notes (the “2014 Notes”). The 2014 Notes had a term of ten years and accrued interest at the rate of 12.5% per year, payable semi-annually in cash or additional 2014 Notes, at the Company’s election. The Note Holders were entitled to convert the 2014 Notes at any time, at their election, into shares of the Company’s common stock at a conversion price calculated as provided in the 2014 Notes. On December 23, 2014, in connection with the issuance of Series C Preferred Stock discussed in Note 9—“Sale of Series C Preferred Stock” below, the 2014 Notes were converted into 213,500 shares of common stock.

Conversion of Subordinated Debt

Conversion of Subordinated Debt and Sale of Series A Preferred Stock	9 Months Ended
	Sep. 30, 2015
Conversion of Subordinated Debt and Sale of Series A Preferred Stock
Conversion of Subordinated Debt and Sale of Series A Preferred Stock	Note 7 — Conversion of Subordinated Debt and Sale of Series A Preferred Stock On September 23, 2013, the Company entered into a Preferred Stock and Warrant Purchase Agreement (the “Series A Purchase Agreement”) with a group of investors including two of our directors, Mr. Christopher Capps and Mr. Richard Kiphart (collectively with the other investors, the “Investors”), pursuant to which the Investors purchased 926,223 shares of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”) at a price of $10.00 per share of Series A Preferred Stock. The purchase price was paid with (a) $2.5 million in cash and (b) the exchange of approximately $6.8 million (principal amount and accrued interest) of the Company’s Subordinated Secured Convertible Pay-In-Kind Notes (the “Notes”), representing all of the outstanding Notes at the time. The shares of Series A Preferred Stock were entitled to an accruing dividend of 12.5% per annum of their original issue price (subject to adjustment for stock splits, combinations and similar recapitalizations), payable semi-annually in arrears. The shares of Series A Preferred Stock were convertible at the election of the holder of such shares, into shares of the Company’s common stock, and the Company could redeem all or a portion of the Series A Preferred Stock at its option subject to certain legal restrictions. On December 23, 2014, in connection with the issuance of Series C Preferred Stock (discussed in Note 9—“Sale of Series C Preferred Stock” ), all outstanding shares of Series A Preferred Stock were converted to 3,084,261 shares of common stock, and the Series A Warrants that had been issued in connection with the entry into the Series A Purchase Agreement were cancelled.

Sale of Series B Preferred Stoc

Sale of Series B Preferred Stock	9 Months Ended
	Sep. 30, 2015
Series B Preferred Stock
Sale of Series B Preferred Stock	Note 8 —Sale of Series B Preferred Stock On December 30, 2013, the Company entered into a Preferred Stock and Warrant Purchase Agreement (the “Series B Purchase Agreement”) with Mr. Kiphart and a group of other investors (collectively, the “Series B Investors”), pursuant to which the Series B Investors purchased 400,000 shares of the Company’s Series B Preferred Stock (the “Series B Preferred Stock”) at a price of $10.00 per share of Series B Preferred Stock. On January 29, 2014, the Company entered into a Series B Purchase Agreement with Greener Capital Partners Fund II, L.P. (“Greener Capital”), pursuant to which Greener Capital purchased an aggregate of 200,000 shares of the Company’s Series B Preferred Stock at a price of $10.00 per share of Series B Preferred Stock. This transaction closed on February 4, 2014. The shares of the Series B Preferred Stock were entitled to an accruing dividend of 12.5% per annum of their original issue price (subject to adjustment for stock splits, combinations and similar recapitalizations), payable semi-annually in arrears. The shares of Series B Preferred Stock were convertible, at any time following the approval of such conversion by the Company’s stockholders, and the Company could at any time elect to redeem all or a portion of the Series B Preferred Stock unless prohibited by provisions of the Delaware General Corporation Law governing distributions to stockholders. On December 23, 2014, in connection with the issuance of Series C Preferred Stock (discussed in Note 9—“Sale of Series C Preferred Stock”), all shares of Series B Preferred Stock were converted to 2,383,437 shares of the Company’s common stock, and the Series B Warrants that had been issued in connection with the entry into the Series B Purchase Agreement were cancelled.

Sale of Series C Preferred Stoc

Sale of Series C Preferred Stock	9 Months Ended
	Sep. 30, 2015
Series C Preferred Stock
Sale of Series C Preferred Stock	Note 9 —Sale of Series C Preferred Stock On December 23, 2014, the Company entered into a Preferred Stock Purchase Agreement with Bison, pursuant to which Bison purchased 10,000 shares of the Company’s Series C Preferred Stock at a price of $1,000 per share of Series C Preferred Stock. The shares of Series C Preferred Stock are entitled to an accruing dividend of 12.5% per annum of their base amount (subject to adjustments for stock splits, combinations and similar recapitalizations), payable every six months. The base amount is adjusted on each dividend payment date for the unpaid dividends accrued. The Company accrued dividends of $336 thousand and $956 thousand during the three and nine months ended September 30, 2015, respectively. The shares of Series C Preferred Stock may be converted, at any time, at the option of the holder, into shares of the Company’s common stock at a conversion price which was initially equal to $2.40 per share (the “Series C Conversion Price”). The Series C Conversion Price shall be proportionately adjusted for stock splits, combinations and similar recapitalizations, and shall be adjusted for future issuances of common stock. Upon conversion , all accrued, undeclared and unpaid dividends on the shares of Series C Preferred Stock so converted shall be cancelled. At any time after the fourth anniversary of the closing date, the Company shall have the right to redeem all, but not less than all, of the shares of Series C Preferred Stock for an amount equal to the original issue price of the shares plus all accrued but unpaid dividends, with such redemption to occur 30 days after the Company’s giving notice thereof to the holder(s) of the shares of Series C Preferred Stock. During such 30-day period, the holders of the Series C Preferred Stock may convert the Series C Preferred Stock to common stock in lieu of receiving the redemption payment. At any time after the fourth anniversary of the closing date, a holder of Series C Preferred Stock shall have the right to require the Company to redeem all or a portion of its Series C Preferred Stock for an amount equal to the original issue price of the shares plus all accrued but unpaid dividends. In the event the Company fails to make the required redemption payment by the date fixed for such payment, the dividend rate will increase to 15% per annum and increase by an additional 1% per annum each quarter until paid. In connection with the issuance of the Series C Preferred Stock, the Company, Bison, Mr. Kiphart and The John Thomas Hurvis Revocable Trust entered into a Shareholder and Investor Rights Agreement dated as of December 23, 2014 (the “Shareholder Agreement”). Pursuant to the terms of the Shareholder Agreement, in the event the Company proposes to issue new securities (subject to certain exceptions), the Company must allow Bison to purchase a proportion of the new securities equal to the number of shares of common stock beneficially owned by Bison divided by the total number of shares of common stock then outstanding, on a fully-diluted basis. The Shareholder Agreement also provides Bison with operational consent rights and director appointment rights that apply so long as Bison holds at least five percent of the total voting power of the Company. The stockholders of the Company party to the Shareholder Agreement have agreed to vote in favor of Bison’s director appointees. The Shareholder Agreement entitles Bison to appoint one director to the Company’s Compensation Committee and any new board committee that is established, other than the Audit Committee or the Governance and Nominating Committee. It also entitles Bison to receive certain financial information. Bison may not, subject to certain exceptions in the Shareholder Agreement, acquire additional shares of common stock or seek to influence the management of the Company without the Company’s consent. Such restrictions will no longer apply upon certain changes of control of the Company. If, on the fifth anniversary of the closing date or any succeeding anniversary of such date, ten percent of the average daily trading volume of common stock is less than the number of shares of common stock beneficially owned by Bison divided by 240, then Bison may require the Company to initiate a sale process. Subject to the terms of the Shareholder Agreement, the stockholders of the Company party to the Shareholder Agreement have agreed to vote in favor of and otherwise support such a sale. If such a sale is not consummated within nine months, Bison shall have the right to require the Company to purchase, subject to the terms of the Shareholder Agreement, all or any portion of its Series C Preferred Stock or common stock into which such Series C Preferred Stock has converted, for a per share price generally equal to the average closing price of the Company’s common stock for the 60 trading days immediately preceding giving notice of exercise of such right. The Company incurred costs of approximately $617 thousand to issue the Series C Preferred Stock. These costs were recorded net of the proceeds of the Series C Preferred Stock. The Series C Preferred Stock is classified outside of permanent equity as the rights of redemption and the ability to initiate a sale are not solely within the control of the Company. The Company intends to use the cash proceeds from the sale of the Series C Preferred Stock for general corporate purposes. On March 24, 2015, the Company amended and restated the Shareholder Agreement (as amended and restated, the “Amended and Restated Shareholder Agreement”) and that certain Registration Rights Agreement dated December 23, 2014 by and among the Company, Bison and certain other stockholders of the Company (as amended and restated, the “Amended and Restated Registration Rights Agreement”). Pursuant to the terms of the Amended and Restated Shareholder Agreement, in the event the Company proposes to issue new securities (subject to certain exceptions), the Company must allow Bison to purchase a proportion of the new securities equal to the number of shares of common stock beneficially owned by Bison (including the shares of common stock into which the Note could convert) divided by the total number of shares of common stock outstanding on a fully-diluted basis. The operational consent rights and director appointment rights held by Bison under the Shareholder Agreement remain in the Amended and Restated Shareholder Agreement; provided, however, that, in the event Bison is no longer entitled to designate at least one director under the terms of the Series C Preferred Stock, Bison will be entitled under the Amended and Restated Shareholder Agreement to designate that number of directors that is consistent with its ownership of common stock (including shares of common stock that are convertible from the Series C Preferred Stock and the Note, assuming the Note was immediately convertible) if it holds at least five percent of the common stock (computed in the same fashion). Pursuant to the Amended and Restated Registration Rights Agreement, Bison is entitled to certain registration rights in connection with the common stock into which its shares of Series C Preferred Stock and the Note may convert, including the right to demand the registration of such shares at any time after December 23, 2015 and rights to include such shares in other registration statements filed by the Company. Additionally, Mr. Kiphart and the John Thomas Hurvis Revocable Trust are entitled to include certain of their shares of common stock in a registration statement filed by the Company. The Company has agreed to indemnify the other parties to the Amended and Restated Registration Rights Agreement in connection with any claims related to their sale of securities under a registration statement, subject to certain exceptions.

Letter of Credit Agreement

Letter of Credit Agreement	9 Months Ended
	Sep. 30, 2015
Letter of Credit Agreement
Letter of Credit Agreement	Note 10 — Letter of Credit Agreement On August 1, 2014, the Company entered into a Letter of Credit Agreement with Mr. Kiphart (the “LOC Agreement”), which replaced a previous letter of credit agreement that the Company had entered into with Mr. Kiphart on December 7, 2012. Pursuant to the LOC Agreement, Mr. Kiphart agreed to cause, at the Company’s request, the issuance of one or more letters of credit (collectively, the “Kiphart Letter of Credit”) for the benefit of a surety, up to an aggregate amount of $1.3 million. The Kiphart Letter of Credit was used to guarantee certain obligations of the Company in connection with its performance under a contract between the Company and a utility customer. Mr. Kiphart’s obligation to cause the issuance of, or leave in place, the Kiphart Letter of Credit was to terminate on December 31, 2019. The Company agreed to indemnify Mr. Kiphart for any liability in connection with any payment or disbursement made under the Kiphart Letter of Credit. The Company also agreed to pay for or reimburse any fees and out-of-pocket expenses incurred by Mr. Kiphart in connection with the Kiphart Letter of Credit. All amounts due to Mr. Kiphart under the LOC Agreement are payable by the Company within ten business days of the Company’s receipt of a written demand thereof from Mr. Kiphart. In addition, the Company agreed to pay Mr. Kiphart simple interest on the aggregate amount of the Kiphart Letter of Credit at a rate of six percent per annum. The Company accrued interest of $0 and $34 thousand during the three and nine months ended September 30, 2015, respectively. As consideration for Mr. Kiphart’s obligations under the LOC Agreement, the Company issued to Mr. Kiphart warrants to purchase 50,000 shares of the Company’s common stock. The value of the warrants, which was determined to be $100 thousand, was capitalized as deferred financing costs. In connection with the issuance of Series C Preferred Stock discussed in Note 9—“Sale of Series C Preferred Stock,” the warrants were forfeited and deferred financing costs of $100 thousand were recorded to interest expense. In May 2015, the Company replaced the Kiphart Letter of Credit with restricted funds of the Company.

Preferred Stock Dividends

Preferred Stock Dividends	9 Months Ended
	Sep. 30, 2015
Preferred Stock Dividends
Preferred Stock Dividends	Note 11— Preferred Stock Dividends The components of dividend expense are as follows: Three Months Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 Series A dividend $ — $ $ — $ Series B dividend — — Series C dividend — — Deemed dividend on Series A — — — Deemed dividend on Series B — — — Total divdend expense $ $ $ $ During the first nine months of 2015, the Company accrued dividends of $956 thousand on our Series C Preferred Stock. During the nine months of 2014, the Company accrued dividends of $914 thousand on our Series A Preferred Stock and $550 thousand on our Series B Preferred Stock. In recording the sale of the Series B Preferred Stock, we allocated the value of the proceeds to the sale of the shares and the warrants based on their relative fair values. In doing so, we determined that the Series B Preferred Stock contained a beneficial conversion feature valued at $480 thousand. The value of the beneficial conversion feature, along with the value of the warrants, which was determined to be $352 thousand, were both considered to be non-cash deemed dividends and were recorded to dividend expense. From the sale of the Series B Preferred Stock, an anti-dilution provision of the Series A Preferred Stock required us to adjust the conversion price of the Series A Preferred Stock resulting in a $178 thousand non-cash deemed dividend. The deemed dividend was calculated as the increase in the value of the shares into which the Series A Preferred Stock would be convertible resulting from the adjustment to the conversion price, based on the market price of our common stock on the date of the adjustment.

Legal Matters

Legal Matters	9 Months Ended
	Sep. 30, 2015
Legal Matters
Legal Matters	Note 12 — Legal Matters The Company is from time to time involved in legal proceedings, which are subject to many uncertainties and the outcomes of which are not within its control and may not be known for prolonged periods of time. The Company is currently party to the following material legal proceedings: Jeffrey Satterfield, individually and on behalf of all others similarly situated, v. Lime Energy Co., John O’Rourke and Jeffrey Mistarz, United States District Court for the Northern District of Illinois, Case No. 1:12-cv-05704. This is a securities class action suit. An Order of Preliminary Approval of a settlement was filed on January 28, 2014. The parties agreed to settlement terms and an Order of Final Approval and Final Judgment was entered by the court on June 4, 2014. As part of the settlement, the Company agreed to pay $2.5 million into a settlement fund, the entire amount of which was paid by insurance. Kuberski v. Lime Energy Co., et al., United States District Court for the Northern District of Illinois, Case No. 12 cv 7993 . As previously disclosed, this putative shareholder derivative action alleged that several of the Company’s former officers and present and former directors breached their fiduciary duties to the Company from May 14, 2008 through the date of the action. On April 1, 2015, the parties entered a Stipulation and Agreement of Settlement, and a hearing on the proposed settlement was scheduled for July 7, 2015. On May 5, 2015, the Court entered a preliminary order approving the Stipulation and Agreement of Settlement. On July 7, 2015, the Court entered a final Order approving the settlement and dismissed the case with prejudice. The settlement amount was fully covered by the Company’s insurance policy. SEC Investigation . In 2012, the SEC commenced an investigation with respect to certain of the Company’s revenue recognition practices and financial reporting. The Company has cooperated with the SEC staff in the course of the investigation. The Company has responded to the SEC’s document requests, and certain of the Company’s employees have given testimony to the SEC. This investigation remains open, and the Company intends to continue to cooperate with the SEC staff. Should the investigation result in a formal enforcement proceeding, it could have a material adverse effect on the Company’s business, results of operations, and financial condition. Dressler v. Lime Energy, United States District Court for the District of New Jersey, Case 3:14-cv-07060-FLW-DEA. This purported “whistleblower” case was filed on November 10, 2014, alleging illegal retaliation by the Company for the plaintiff’s alleged disclosure of activity she believed violated the Securities Exchange Act of 1934, as amended. The plaintiff alleges that she made repeated disclosures to various individuals employed by the Company that certain accounting practices were improper and could lead to a restatement of financial statements. The plaintiff filed her complaint pursuant to the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1514A), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. §78u-6, et seq.). This case has been accepted for coverage under the Lime Executive Protection Portfolio Policy. Although the Company believes the lawsuit has no merit, the court has denied the Company’s motion to dismiss the case. The lawsuit remains in early stages and the Company intends to continue to defend itself vigorously.

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 30, 2015
Discontinued Operations.
Discontinued Operations	Note 13 — Discontinued Operations On February 28, 2013, the Company sold the majority of its public sector business to PowerSecure. In addition, during the third quarter of 2013, the Board authorized management to sell or dispose of GESPC, its contract with the Army Corp of Engineers under the Federal Renewal and Renovation program, and the regional service business located in Bethlehem, Pennsylvania. These businesses, which the Company exited in 2013, and the Asset Development business, which the Company shut down at the end of 2012, have all been reported as discontinued operations in the accompanying financial statements. The revenue and operating profit (loss) related to discontinued operations were as follows (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 Revenue $ — $ $ $ Operating profit (loss) $ ) $ $ ) $ The assets and liabilities related to discontinued operations were as follows (in thousands): September 30, December 31, 2015 2014 Accounts receivable $ $ Costs and estimated earnings in excess of billings on uncompleted contracts Total current assets Total Assets $ $ Accounts payable $ — $ Accrued expenses Billings in excess of costs and estimated earnings on uncompleted contracts Customer deposits Total current liabilities Total Liabilities $ $

Business Segment Information

Business Segment Information	9 Months Ended
	Sep. 30, 2015
Business Segment Information
Business Segment Information	Note 14 — Business Segment Information All of the Company’s operations, including EnerPath’s operations, are included in one reportable segment, the Energy Efficiency segment.

Line of Credit - Heritage Bank

Line of Credit - Heritage Bank of Commerce	9 Months Ended
	Sep. 30, 2015
Line of Credit - Heritage Bank of Commerce
Line of Credit - Heritage Bank of Commerce	Note 15 — Line of Credit — Heritage Bank of Commerce On July 24, 2015, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Heritage Bank of Commerce (the “Bank”), whereby the Bank agreed to make available to the Company a secured credit facility (the “Credit Facility”) consisting of a $6.0 million revolving line of credit which the Company may draw upon from time to time, subject to the calculation and limitation of a borrowing base, for working capital and other general corporate purposes. The line of credit, which matures on July 24, 2017, bears variable interest at the prime rate plus 1.00% and is collateralized by certain assets of the Company and its subsidiaries including their respective accounts receivable, certain deposit and investment accounts, and intellectual property. As additional incentive to the Bank to enter into the Credit Facility and make available to the Company funds thereunder, the Company has issued to the Bank a warrant to purchase shares of the Company’s common stock up to $60 thousand in the aggregate . The Loan Agreement requires the Company to comply with a number of conditions precedent that must be satisfied prior to any borrowing. In addition, the Company will be required to remain compliant with certain customary representations and warranties and a number of affirmative and negative covenants. The occurrence of an event of default under the Loan Agreement may cause amounts outstanding during the event of default to accrue interest at a rate of 3.00% above the interest rate that would otherwise be applicable.

Share-Based Compensation (Table

Share-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Share-Based Compensation
Summary of share-based compensation expense	The following table summarizes the Company’s total share-based compensation expense (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Stock options $ $ ) $ $ ) Restricted stock Employee Stock Purchase Plan — $ $ $ $
Schedule of compensation expense to be recognized in future periods	The compensation expense to be recognized in future periods with respect to the Company’s employee options and restricted stock is as follows (in thousands): Weighted Average Unrecognized Remaining Compensation Life As of September 30, 2015 Expense (in Months) Stock options $ Restricted stock $

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share
Schedule of basic and diluted earnings (loss) per common share	Three Months Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 Earnings (Loss) Per Share - Basic Income (loss) from continuing operations $ $ ) $ ) $ ) Less: Preferred stock dividends ) ) ) ) Income available to common stockholders ) ) ) (Loss) Income from operation of discontinued operations ) ) Net income (loss) available to common stockholders $ $ ) $ ) $ ) Weighted average common shares outstanding - Basic Basic earnings (loss) per common share $ $ ) $ ) $ ) Earnings (Loss) Per Share - Diluted Net income (loss) available to common stockholders $ $ ) $ ) $ ) Less: Gain from change in derivative liability ) — — — Add: Preferred stock dividends — — — Add: Interest on convertible term notes — — — Net income (loss) applicable to dilutive common stock $ $ ) $ ) $ ) Weighted average common shares outstanding - Basic Effect of dilutive securities Dilutive stock awards — — — Dilutive preferred share conversions — — — Dilutive debt conversions — — — Weighted average common shares outstanding - Diluted Diluted earnings (loss) per common share $ $ ) $ ) $ )

Acquisition of EnerPath (Tables

Acquisition of EnerPath (Tables)	9 Months Ended
	Sep. 30, 2015
Acquisition of EnerPath
Schedule of preliminary adjusted fair values of the assets acquired and liabilities assumed at the date of the closing of the acquisition	The following table summarizes the preliminary adjusted fair values of the assets acquired and liabilities assumed at the date of the closing of the acquisition (in thousands). Current assets $ Property and equipment Other assets Intangible assets - finite life Goodwill Total assets acquired Current Liabilities assumed ) Deferred income tax liability ) Net assets acquired $
Schedule of the preliminary estimated fair value of intangible assets acquired	The preliminary estimate of intangible assets acquired from EnerPath, the acquired intangible asset categories, fair value and average amortization periods are as follows (in thousands): Estimated Average Annual Amortization Amortization Fair Value Method/Period Expense Customer relationships $ Cash flow/7 years $ Enerworks System Software 4 years Trade name 3 years $ $
Schedule of unaudited pro forma information	The following unaudited pro forma information represents the Company’s results of operations as if the acquisition had occurred on January 1, 2014 (in thousands, except per share data): Nine-months ended September 30, 2015 2014 Revenue $ $ Loss from continuing operations $ ) $ ) (Loss) Income from operation of discontinued business ) Net loss $ ) $ ) Preferred stock dividends ) ) Net loss available to common stockholders $ ) $ ) Basic and Diluted (loss) earnings Per Common Share From Continuing operations $ ) $ ) Discontinued operations ) Basic and Diluted Loss Per Common Share $ ) $ ) Weighted Average Common Shares Outstanding

Preferred Stock Dividends (Tabl

Preferred Stock Dividends (Tables)	9 Months Ended
	Sep. 30, 2015
Preferred Stock Dividends
Components of dividend expense	Three Months Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 Series A dividend $ — $ $ — $ Series B dividend — — Series C dividend — — Deemed dividend on Series A — — — Deemed dividend on Series B — — — Total divdend expense $ $ $ $

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2015
Discontinued Operations.
Schedule of revenue and operating profit (loss) related to discontinued operations	The revenue and operating profit (loss) related to discontinued operations were as follows (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 Revenue $ — $ $ $ Operating profit (loss) $ ) $ $ ) $
Schedule of assets and liabilities related to discontinued operations	The assets and liabilities related to discontinued operations were as follows (in thousands): September 30, December 31, 2015 2014 Accounts receivable $ $ Costs and estimated earnings in excess of billings on uncompleted contracts Total current assets Total Assets $ $ Accounts payable $ — $ Accrued expenses Billings in excess of costs and estimated earnings on uncompleted contracts Customer deposits Total current liabilities Total Liabilities $ $

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Millions	Mar. 24, 2015	Aug. 04, 2014
Adjusted earnings before interest, taxes, depreciation and amortization target	$ 6.3
Subordinated convertible notes
Amount borrowed		$ 1
Subordinated convertible notes | Bison
Amount borrowed	$ 11.7

Share-Based Compensation (Detai

Share-Based Compensation (Details)	Jun. 18, 2015itemshares	Mar. 14, 2014item	Sep. 30, 2015itemshares	Oct. 15, 2015shares
2014 ESPP
Share-Based Compensation
Number of ESPP offering periods | item		2
Term of ESPP offering period	6 months	6 months
Number of eligible employees to participate in the plan | item			267
2015 ESPP
Share-Based Compensation
Shares authorized	100,000
Number of ESPP offering periods | item	2
2008 Plan
Share-Based Compensation
Shares authorized			407,143	1,585,718
Additional number of shares reserved for issuance per year			35,715
Common stock reserved for future issuance			1,366,029
2008 Plan | Stock Options
Share-Based Compensation
Granted (in shares)			1,217,680
Options outstanding			1,250,920
Vesting period			3 years
Expiration term			10 years
Directors' Plan | Restricted stock
Share-Based Compensation
Granted (in shares)			92,413
Directors' Plan | Restricted stock | Outside directors | Vesting percentage upon grant
Share-Based Compensation
Annual vesting of shares (as a percent)			50
Directors' Plan | Restricted stock | Outside directors | Vesting percentage on first anniversary or the director's death, disability, or retirement
Share-Based Compensation
Annual vesting of shares (as a percent)			50
Committee service under Directors' Plan | Restricted stock
Share-Based Compensation
Common Stock available for issuance			284,364
Committee service under Directors' Plan | Restricted stock | Vesting percentage upon grant
Share-Based Compensation
Annual vesting of shares (as a percent)			50
Committee service under Directors' Plan | Restricted stock | Vesting percentage on first anniversary or the director's death, disability, or retirement
Share-Based Compensation
Annual vesting of shares (as a percent)			50

Share-Based Compensation (Det30

Share-Based Compensation (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based compensation
Share based compensation expense	$ 197	$ 46	$ 642	$ 237
Stock Options
Share-based compensation
Share based compensation expense	118		280
Share based compensation expense		(20)		(7)
Restricted stock
Share-based compensation
Share based compensation expense	61	$ 66	313	232
2015 ESPP
Share-based compensation
Share based compensation expense	$ 18		$ 49	$ 12

Share-Based Compensation (Det31

Share-Based Compensation (Details 3) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Stock Options
Compensation expense to be recognized in future periods
Unrecognized Compensation Expense	$ 1,167
Weighted Average Remaining Life	11 months 18 days
Restricted stock
Compensation expense to be recognized in future periods
Unrecognized Compensation Expense	$ 85
Weighted Average Remaining Life	4 months 18 days

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic earnings (loss) per common share from
Income (loss) from continuing operations	$ 1,859	$ (45)	$ (1,006)	$ (1,438)
Less : Preferred stock dividends	(336)	(521)	(956)	(2,474)
Income available to common stockholders	1,523	(566)	(1,962)	(3,912)
(Loss) Income from operation of discontinued business	(46)	136	(267)	187
Net income (loss) available to common stockholders	$ 1,477	$ (430)	$ (2,229)	$ (3,725)
Weighted average common shares outstanding - Basic	9,564	3,760	9,539	3,738
Basic earnings (loss) per common share	$ 0.15	$ (0.11)	$ (0.23)	$ (1)
Diluted earnings (loss) per common share from
Net income (loss) available to common stockholders	$ 1,477	$ (430)	$ (2,229)	$ (3,725)
Less: Gain from change in derivative liability	(1,272)		814
Preferred stock dividends	336	521	956	2,474
Add: Interest on convertible term notes	322	35	825	35
Net income (loss) applicable to dilutive common stock	$ 863	$ (430)	$ (2,229)	$ (3,725)
Weighted average common shares outstanding - Basic	9,564	3,760	9,539	3,738
Effect of dilutive securities
Dilutive stock awards	248
Dilutive preferred share conversions	4,167
Dilutive debt conversions	3,718
Weighted-average common shares outstanding(in shares) - Diluted	17,697	3,760	9,539	3,738
Diluted earnings (loss) per common share	$ 0.05	$ (0.11)	$ (0.23)	$ (1)

Acquisition of EnerPath (Detail

Acquisition of EnerPath (Details) - USD ($) $ in Thousands	Jun. 25, 2015	Mar. 24, 2015	Sep. 30, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Consideration paid in connection with acquisition			$ 11,000
Fair values of the assets acquired and liabilities assumed
Goodwill			$ 8,173	$ 6,009
EnerPath
Business Acquisition [Line Items]
Consideration paid in connection with acquisition		$ 11,000
Consideration held in escrow	$ 629	1,000
Amount released from escrow deposit related to indemnification	250
Amount released from escrow deposit cover expenses of the stockholders' representative	$ 75
Fair values of the assets acquired and liabilities assumed
Current assets		8,932
Property and Equipment		153
Other assets		41
Intangible assets - finite life		5,595
Goodwill		2,164
Total Assets Acquired		16,885
Current Liabilities assumed		(4,639)
Deferred income tax liability		(1,246)
Net Assets Acquired		$ 11,000

Acquisition of EnerPath (Deta34

Acquisition of EnerPath (Details 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
Acquired intangible assets
Estimated Annual Amortization Expense	$ 285	$ 594
Business Acquisition, Pro Forma Information
Revenue		92,821	$ 71,855
Loss from continuing operations		(240)	(3,614)
(Loss) Income from operation of discontinued business		(267)	187
Net loss		(507)	(3,427)
Preferred stock dividends		(956)	(2,474)
Net loss available to common stockholders		$ (1,463)	$ (5,901)
Basic and Diluted (loss)earnings Per Common Share From Continuing operations		$ (0.12)	$ (1.63)
Business Acquisition, Pro Forma Earnings Per Share, Basic And Diluted From Discontinuing Operations		(0.03)	0.05
Basic and Diluted Loss Per Common Share		$ (0.15)	$ (1.58)
Weighted Average Common Shares Outstanding		9,539	3,738
EnerPath
Acquired intangible assets
Fair Value	5,595	$ 5,595
Estimated Annual Amortization Expense		1,306
EnerPath | Customer relationships
Acquired intangible assets
Fair Value	1,505	$ 1,505
Average Amortization Method/Period		7 years
Estimated Annual Amortization Expense		$ 215
EnerPath | Enerworks System Software
Acquired intangible assets
Fair Value	3,265	$ 3,265
Average Amortization Method/Period		4 years
Estimated Annual Amortization Expense		$ 816
EnerPath | Trade name
Acquired intangible assets
Fair Value	$ 825	$ 825
Average Amortization Method/Period		3 years
Estimated Annual Amortization Expense		$ 275

Subordinated Convertible Term35

Subordinated Convertible Term Notes (Details) $ / shares in Units, $ in Thousands	Mar. 31, 2015USD ($)	Mar. 24, 2015USD ($)directorshares	Dec. 23, 2014shares	Aug. 04, 2014USD ($)	Sep. 30, 2015USD ($)$ / shares	Sep. 30, 2015USD ($)item$ / shares	Sep. 30, 2014USD ($)
Subordinated Convertible Term Notes
Payment of interest						$ 651	$ 3
Loss on extinguishment of debt - Related Party						1,420
Bison | Richard Kiphart.
Subordinated Convertible Term Notes
Number of directors | director		2
Series C Preferred Stock
Subordinated Convertible Term Notes
Net carrying amount of the extinguished Note					$ 5,800	5,800
Loss on extinguishment of debt - Related Party						$ 1,400
Long-term Debt	$ 7,300
Effective interest rate (as a percentage)	25.40%
Number of converted common shares | shares			213,500
Series C Preferred Stock | Bison
Subordinated Convertible Term Notes
Preferred Stock, Shares Issued | shares		10,000	10,000
Conversion from preferred stock to common stock (as a percent)		30.00%
Number of shares convertible from debt | item						3,718,354
EnerPath
Subordinated Convertible Term Notes
Debt issuance costs		$ 900
Subordinated convertible notes
Subordinated Convertible Term Notes
Proceeds from debt issuance				$ 1,000
Term of the debt instrument				10 years
Interest rate (as a percent)				12.50%
Subordinated convertible notes | Bison
Subordinated Convertible Term Notes
Proceeds from debt issuance		11,700
Conversion price (in dollars per share) | $ / shares					$ 3.16	$ 3.16
Interest rate, minimum (as a percent)	10.50%
Interest rate, maximum (as a percent)	12.50%
Payment of interest					$ 617
Accrued interest						$ 1,000
Fair value of the derivative liability		$ 5,600			$ 6,400	$ 6,400
Fair value, risk free rate						1.36%
Fair value, expected volatility						77.00%
Probability of conversion price change						0.00%
Subordinated convertible notes | Bison | Default
Subordinated Convertible Term Notes
Interest rate increase (as a percent)	2.00%

Conversion of Subordinated De36

Conversion of Subordinated Debt and Sale of Series A Preferred Stock (Details) $ / shares in Units, $ in Millions	Dec. 23, 2014shares	Sep. 23, 2013USD ($)director$ / sharesshares	Sep. 23, 2013director$ / sharesshares
Series A Purchase Agreement
Conversion of Subordinated Debt and Sale of Preferred Stock
Number Of Directors | director		2	2
Series A Preferred Stock
Conversion of Subordinated Debt and Sale of Preferred Stock
Accruing dividend per annum on preferred shares (as a percent)			12.50%
Number of converted common shares	3,084,261
Series A Preferred Stock | Series A Purchase Agreement
Conversion of Subordinated Debt and Sale of Preferred Stock
Shares purchased by investors		926,223	926,223
Sale price per share (in dollars per share) | $ / shares		$ 10	$ 10
Purchase price received in cash | $		$ 2.5
Series A Preferred Stock | Series A Purchase Agreement | Subordinated convertible notes
Conversion of Subordinated Debt and Sale of Preferred Stock
Purchase price for preferred shares through exchange of principal amount and accrued interest of convertible debt | $		$ 6.8

Sale of Series B Preferred St37

Sale of Series B Preferred Stock (Details) - Series B Preferred Stock - $ / shares	Dec. 23, 2014	Sep. 30, 2015	Jan. 29, 2014	Dec. 30, 2013
Sale of Series Preferred Stock
Accruing dividend per annum on preferred shares (as a percent)		12.50%
Number of converted common shares	2,383,437
Series B Purchase Agreement Greener Capital
Sale of Series Preferred Stock
Shares purchased by investors			200,000
Sale price per share (in dollars per share)			$ 10
Series B Purchase Agreement Series B Investors
Sale of Series Preferred Stock
Shares purchased by investors				400,000
Sale price per share (in dollars per share)				$ 10

Sale of Series C Preferred St38

Sale of Series C Preferred Stock (Details) $ / shares in Units, $ in Thousands	Dec. 23, 2014USD ($)$ / sharesshares	Sep. 23, 2013	Sep. 30, 2015USD ($)	Sep. 30, 2015USD ($)item	Sep. 30, 2014USD ($)	Mar. 24, 2015shares
Payments of Stock Issuance Costs					$ 11
Series C Preferred Stock
Accrued dividends			$ 336	$ 956
Accruing dividend per annum on preferred shares (as a percent)	12.50%
Conversion Price (in dollars per share) | $ / shares	$ 2.40
Period after notice, after which the preferred stock may be redeemed	30 days
Dividend rate per annum if the preferred stock is not redeemed on requirement (as a percent)	15.00%
Increase in the dividend rate each quarter if the preferred stock is not redeemed on requirement (as a percent)	1.00%
Payments of Stock Issuance Costs	$ 617
Series B Preferred Stock
Accruing dividend per annum on preferred shares (as a percent)				12.50%
Series A Preferred Stock
Accruing dividend per annum on preferred shares (as a percent)		12.50%
Bison | Shareholder Agreement
Number of directors who shall be appointed	1
Percentage of average daily trading volume of common stock triggering sale	10.00%
Ratio of average daily trading volume of common stock triggering sale to investor owned shares | item				240
Bison | Minimum | Shareholder Agreement
Total voting power to be held to be eligible to execute rights (as a percent)	5.00%
Bison | Series C Preferred Stock
Shares purchased by investors | shares	10,000					10,000
Sale price per share (in dollars per share) | $ / shares	$ 1,000
Bison | Series C Preferred Stock | Shareholder Agreement
Period after sale in which the sold shares are to be purchased by the company on requirement.	9 months
Period immediately preceding giving notice of exercise, used to calculate the purchase price	60 days
Bison | Series C Preferred Stock | Minimum
Percentage of common stock held by investor				5.00%

Letter of Credit Agreement (Det

Letter of Credit Agreement (Details) $ in Thousands	Aug. 01, 2014USD ($)item	Sep. 30, 2015USD ($)	Sep. 30, 2015USD ($)	Dec. 31, 2014USD ($)	Aug. 12, 2014shares
Letter of Credit Agreement
Deferred financing cost recorded to letter of credit fees		$ 156	$ 156	$ 22
Letter of credit agreement. | Richard Kiphart.
Letter of Credit Agreement
Aggregate borrowing capacity	$ 1,300
Number of business days from receipt of Mr. Kiphart's written demand to pay indemnification, fees and expenses	10 days
Warrant issued to purchase shares of common stock (in shares) | shares					50,000
Fair value of warrant at date of issuance		100	100
Deferred financing cost recorded to letter of credit fees		100	$ 100
Interest rate			6.00%
Accrued interest expense		$ 0	$ 34
Letter of credit agreement. | Richard Kiphart. | Minimum
Letter of Credit Agreement
Number of letters of credit issued | item	1

Preferred Stock Dividends (Deta

Preferred Stock Dividends (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Preferred Stock Dividends
Total dividend expense	$ 336	$ 521	$ 956	$ 2,474
Series A Preferred Stock
Preferred Stock Dividends
Total dividend expense		320		914
Dividend accrued		914		914
Series A Preferred Stock | Deemed dividend
Preferred Stock Dividends
Total dividend expense				178
Series B Preferred Stock
Preferred Stock Dividends
Total dividend expense		201		550
Dividend accrued		$ 550		550
Beneficial conversion feature			480
Series B Preferred Stock | Deemed dividend
Preferred Stock Dividends
Total dividend expense				$ 832
Series B Preferred Stock | Warrants
Preferred Stock Dividends
Value of beneficial conversion feature and warrants	352		352
Series C Preferred Stock
Preferred Stock Dividends
Total dividend expense	336		956
Dividend accrued	$ 956		$ 956

Legal Matters (Details)

Legal Matters (Details) $ in Millions	Jan. 21, 2014USD ($)
Satterfield v. Lime Energy Co.
Legal Matters
Settlement amount	$ 2.5

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Assets and liabilities related to discontinued operations
Total current assets	$ 301		$ 301		$ 613
Total current liabilities	135		135		806
Discontinued operations
Revenue and loss related to discontinued operations
Revenue		$ 450	10	$ 633
Operating profit (loss)	(46)	$ 136	(267)	$ 187
Discontinued operations | Public Sector
Assets and liabilities related to discontinued operations
Accounts receivable	92		92		404
Costs and estimated earnings in excess of billings on uncompleted contracts	209		209		209
Total current assets	301		301		613
Total Assets	301		301		613
Accounts payable					672
Accrued expenses	114		114		108
Billings in excess of costs and estimated earnings on uncompleted contracts	3		3		8
Customer deposits	18		18		18
Total current liabilities	135		135		806
Total Liabilities	$ 135		$ 135		$ 806

Business Segment Information (D

Business Segment Information (Details)	9 Months Ended
	Sep. 30, 2015item
Business Segment Information
Number of Reportable Segments	1

Line of Credit - Heritage Ban44

Line of Credit - Heritage Bank of Commerce (Details) - Loan And Security Agreement $ in Thousands	Jul. 24, 2015USD ($)
Default
Line of Credit Facility
Interest rate increase (as a percent)	3.00%
Common stock | Maximum
Line of Credit Facility
Value of warrant to purchase shares of the common stock	$ 60
Revolving line of credit
Line of Credit Facility
Aggregate borrowing capacity	$ 6,000
Revolving line of credit | Prime rate
Line of Credit Facility
Variable interest rate	1.00%