**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





**x** **QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





For
      the
      quarterly period ended June 30, 2008





or





** ̈** **TRANSITION REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934**





For
      the
      transition period from to .





*Commission
      file number 000-51968*





**MMC
                ENERGY, INC.**(Exact
                name of registrant as specified in its charter)




Delaware
            
            98-0493819(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)





26
                Broadway New York NY 10004(Address
                of principal executive offices)(Zip
                Code)





(212)
      977-0900


(Registrant’s
      telephone number, including area code)







(Former
      name, former address and former fiscal year,


if
      changed since last report)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes
       x No
o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.





Large
      Accelerated Filer o     Accelerated
      Filer o





Non-Accelerated
      Filer o(Do
      not check if a smaller reporting
      company)   Smaller
      reporting company x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act) Yes࿠ No
x





As
      of
      August 11, 2008 the registrant had 14,144,347 shares of Common Stock
      outstanding








TABLE
                OF CONTENTSPART
                I
            FINANCIAL
                INFORMATIONITEM
                1
            Financial
                StatementsCondensed
                Consolidated Balance Sheets as of June 30, 2008 (unaudited) and December
                31, 2007
            2Condensed
                Consolidated Statements of Operations (unaudited) for the three month
                and
                six month periods ended June 30, 2008 and 2007
            3Condensed
                Consolidated Statement of Stockholders' Equity (unaudited) for the
                period from January 1, 2008 through June 30, 2008
            4Condensed
                Consolidated Statements of Cash Flows (unaudited) for the six month
                periods ended June 30, 2008 and 2007
            5Notes
                to Condensed Consolidated Financial Statements (unaudited)
            6ITEM
                2
            Management's
                Discussion and Analysis of Financial Condition and Results of Operations
            17ITEM
                3
            Quantitative
                and Qualitative Disclosures about Market Risk
            24ITEM
                4T
            Controls
                and Procedures
            24PART
                II
            OTHER
                INFORMATIONITEM
                1
            Legal
                Proceedings
            24ITEM
                1A
            Risk
                Factors
            25ITEM
                2
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            25ITEM
                3
            Defaults
                Upon Senior Securities
            25ITEM
                4
            Submission
                of Matters to a Vote of Security Holders
            26ITEM
                5
            Other
                Information
            26ITEM
                6
            Exhibits
            27SIGNATURES
            28







**FORWARD-LOOKING
      STATEMENTS**





Some
      of
      the statements under ‘‘business,’’ ‘‘Risk Factors,’’ ‘‘Management’s Discussion
      and Analysis of Financial Condition and Results of Operations,’’ and elsewhere
      in this Quarterly Report on Form 10-Q constitute forward-looking statements.
      These statements relate to future events or our strategy, future operations,
      future financial position, future revenues, projected costs, prospects, and
      the
      plans and objectives of management and involve known and unknown risks,
      uncertainties and other factors that may cause our or our industry’s actual
      results, levels of activity, performance or achievements to be materially
      different from any future results, levels of activity, performance or
      achievements expressed, implied or inferred by these forward-looking statements.
      Such factors include, among other things, those listed under ‘‘Risk Factors’’
and elsewhere in this Quarterly Report. In some cases, you can identify
      forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’
‘‘could,’’ ‘‘would,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’
‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential’’ or ‘‘continue’’ or the
      negative of such terms and other comparable terminology.





Although
      we believe that the expectations reflected in the forward-looking statements
      are
      reasonable, we do not know whether we can achieve positive future results,
      levels of activity, performance, or goals. Actual events or results may differ
      materially. We undertake no obligation to update any of the forward-looking
      statements after the date of this Quarterly Report to conform to those
      statements to reflect the occurrence of unanticipated events, except as required
      by applicable law.


-
          1
          -




**PART
      I. FINANCIAL INFORMATION**


**ITEM
      1. FINANCIAL STATEMENTS**




MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED BALANCE SHEETS


**June
                  30,**
              
              **December
                  31,****Assets**
              
              **2008**
              
              **2007**Current
                  assets:
              
              (unaudited)Cash
                  and equivalents
              
              $
              20,876,742
              
              $
              42,582,697Accounts
                  receivable (Note 3)
              
              
              229,938
              
              
              62,855Unbilled
                  receivables (Note 3)
              
              
              318,247
              
              
              -Spare
                  parts inventories
              
              
              90,917
              
              
              94,089Prepaids
                  and deposits (Note 3)
              
              
              268,541
              
              
              215,254Securities
                  avaliable for sale (Note 4)
              
              
              -
              
              
              4,075,000Total
                  current assets
              
              
              21,784,385
              
              
              47,029,895Property,
                  plant and equipment, net (Note 5)
              
              
              6,422,555
              
              
              6,721,153Other
                  assets:Deferred
                  costs (Note 6)
              
              
              3,652,056
              
              
              2,488,756Long-term
                  deposits (Note 7)
              
              
              20,117,729
              
              
              98,630Other
                  assets and deferred charges (Note 8)
              
              
              325,638
              
              
              390,762Total
                  other assets
              
              
              24,095,423
              
              
              2,978,148Total
                  assets
              
              $
              52,302,363
              
              $
              56,729,196**Liabilities
                  & Stockholders' equity**Current
                  Liabilities:Current
                  maturities of long-term debt (Note 9)
              
              $
              444,456
              
              $
              444,456Accounts
                  payable
              
              
              818,546
              
              
              453,654Deferred
                  revenue
              
              
              -
              
              
              65,713Other
                  accrued expenses
              
              
              631,337
              
              
              769,164Accrued
                  compensation
              
              
              601,867
              
              
              1,740,077Total
                  current liabilities
              
              
              2,496,206
              
              
              3,473,064Long-term
                  debt (Note 9)
              
              
              1,740,708
              
              
              1,962,936Commitments
                  & contingencies (Note 10)Stockholders'
                  Equity (Note 12)Preferred
                  Stock; 10,000,000 shares authorized; none issued and outstanding;
                  $.001
                  par value
              
              
              -
              
              
              -Common
                  stock; 300,000,000 shares authorized with 14,144,347 issued and
                  outstanding as of June 30, 2008 and 13,917,347 outstanding as of
                  December
                  31, 2007; $.001 par value
              
              
              14,144
              
              
              13,917Additional
                  paid-in capital
              
              
              61,792,308
              
              
              61,658,887Accumulated
                  deficit
              
              
              (13,741,003
              )
              
              (10,379,608
              )Total
                  stockholders' equity
              
              
              48,065,449
              
              
              51,293,196Total
                  liabilities and stockholders' equity
              
              $
              52,302,363
              
              $
              56,729,196




The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.




-
          2
          -




MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


**Three
                  Months**
                **Ended**
                **June
                  30,**
              
              **Three
                  Months**
                **Ended**
                **June
                  30,**
              
              **Six
                  Months**
                **Ended**
                **June
                  30,**
              
              **Six
                  Months**
                **Ended**
                **June
                  30,****2008**
              
              **2007**
              
              **2008**
              
              **2007****Operating
                  revenues:**Resource
                  adequacy capacity
              
              $
              627,900
              
              $
              791,250
              
              $
              1,209,650
              
              $
              1,483,500Ancillary
                  services
              
              
              327,481
              
              
              612,846
              
              
              332,619
              
              
              1,004,387Energy
                  production
              
              
              52,462
              
              
              100,867
              
              
              195,959
              
              
              118,193Total
                  operating revenues
              
              
              1,007,843
              
              
              1,504,963
              
              
              1,738,228
              
              
              2,606,081**Costs
                  of sales:**Costs
                  of resource adequacy capacity
              
              
              45,523
              
              
              63,300
              
              
              87,700
              
              
              118,680Costs
                  of ancillary services
              
              
              43,924
              
              
              92,813
              
              
              48,240
              
              
              180,091Costs
                  of energy production
              
              
              42,891
              
              
              81,184
              
              
              117,936
              
              
              102,097Total
                  costs of sales
              
              
              132,338
              
              
              237,297
              
              
              253,876
              
              
              400,867**Gross
                  Profit**
              
              
              875,505
              
              
              1,267,666
              
              
              1,484,352
              
              
              2,205,213**Operating
                  expenses:**Depreciation
              
              
              300,339
              
              
              279,222
              
              
              594,661
              
              
              516,185Operations
                  and maintenance
              
              
              683,210
              
              
              797,467
              
              
              1,413,333
              
              
              1,211,625Re-commissioning
                  expenses
              
              
              -
              
              
              39,517
              
              
              -
              
              
              419,135General
                  and administrative expenses
              
              
              1,760,101
              
              
              1,073,000
              
              
              3,277,688
              
              
              2,522,049Total
                  operating expenses
              
              
              2,743,650
              
              
              2,189,206
              
              
              5,285,682
              
              
              4,668,994**Loss
                  from operations**
              
              
              (1,868,145
              )
              
              (921,540
              )
              
              (3,801,330
              )
              
              (2,463,780
              )**Interest
                  and other expenses**Interest
                  expense
              
              
              (55,777
              )
              
              (54,380
              )
              
              (120,798
              )
              
              (110,254
              )Interest
                  income
              
              
              187,635
              
              
              52,325
              
              
              560,733
              
              
              71,239Interest
                  income (expense), net
              
              
              131,858
              
              
              (2,055
              )
              
              439,935
              
              
              (39,015
              )Other
                  income (expense), net
              
              
              -
              
              
              296,117
              
              
              -
              
              
              135,995Total
                  interest and other income (expense)
              
              
              131,858
              
              
              294,062
              
              
              439,935
              
              
              96,980**Net
                  loss before provision for income taxes**
              
              
              (1,736,287
              )
              
              (627,478
              )
              
              (3,361,395
              )
              
              (2,366,800
              )Provision
                  for income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Net
                  loss**
              
              $
              (1,736,287
              )
              $
              (627,478
              )
              $
              (3,361,395
              )
              $
              (2,366,800
              )$
              -**Basic
                  loss per common share**Net
                  loss per share
              
              $
              (0.12
              )
              $
              (0.13
              )
              $
              (0.24
              )
              $
              (0.49
              )Weighted
                  average shares outstanding
              
              
              14,144,347
              
              
              4,811,438
              
              
              14,057,912
              
              
              4,807,073**Diluted
                  loss per common share**Net
                  loss per share
              
              $
              (0.12
              )
              $
              (0.13
              )
              $
              (0.24
              )
              $
              (0.49
              )Weighted
                  average shares outstanding
              
              
              14,144,347
              
              
              4,811,438
              
              
              14,057,912
              
              
              4,807,073Weighted
                  average shares outstanding - basic
              
              
              14,144,347
              
              
              4,811,438
              
              
              14,057,912
              
              
              4,807,073Dilutive
                  effect of assumed exercise of employee stock options, warrants
                  and
                  immediate vesting of unvested stock awards
              
              
              -
              
              
              -
              
              
              -
              
              
              -Weighted
                  average shares outstanding - diluted
              
              
              14,144,347
              
              
              4,811,438
              
              
              14,057,912
              
              
              4,807,073Anti-dilutive
                  shares excluded from diluted EPS computations
              
              
              724,559
              
              
              153,762
              
              
              747,381
              
              
              173,902


The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.


-
          3
          -





MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


FOR
      THE
      PERIOD FROM JANUARY 1, 2008 THROUGH JUNE 30, 2008


(Unaudited)




**Common**
              
              **Common**
              
              **Additional**
              
              
              
              **Total****Shares**
              
              **Stock**
              
              **Paid-in**
              
              **Accumulated**
              
              **Stockholders'****$.001
                  Par Value**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Equity****Balance
                  at December 31, 2007**
              
              
              13,917,347
              
              $
              13,917
              
              $
              61,658,887
              
              $
              (10,379,608
              )
              $
              51,293,196Stock
                  awards and options, net of cancellations
              
              
              227,000
              
              
              227
              
              
              133,422
              
              
              
              
              
              133,649Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (3,361,395
              )
              
              (3,361,395
              )**Balance
                  at June 30, 2008**
              
              
              14,144,347
              
              $
              14,144
              
              $
              61,792,308
              
              $
              (13,741,003
              )
              $
              48,065,449




The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.


-
          4
          -


MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


**Six
                  Months Ended**
                **June
                  30, 2008**
              
              **Six
                  Months Ended**
                **June
                  30, 2007****Operating
                  Activities of Continuing Operations**Net
                  loss
              
              $
              (3,361,395
              )
              $
              (2,366,801
              )Adjustments
                  to reconcile net loss to cash used in operating activitiesDepreciation
              
              
              594,661
              
              
              516,185Stock-based
                  compensation
              
              
              133,649
              
              
              145,387Changes
                  in current assets & liabilities(Increase)
                  in receivables
              
              
              (485,330
              )
              
              (120,864
              )Decrease
                  in spare parts inventories
              
              
              3,172
              
              
              -(Increase)
                  Decrease in prepaids and deposits
              
              
              (53,287
              )
              
              185,799(Decrease)
                  Increase in accounts payable
              
              
              (23,709
              )
              
              446,971(Decrease)
                  Increase in deferred revenues
              
              
              (65,713
              )
              
              30,360(Decrease)
                  in other accrued expenses
              
              
              (137,827
              )
              
              (424,905
              )(Decrease)
                  increase in accrued compensation
              
              
              (1,138,210
              )
              
              107,538Decrease
                  in other assets and deferred charges
              
              
              65,124
              
              
              -Other
                  non-current, net
              
              
              10,130
              
              
              -**Net
                  cash used in operations**
              
              
              (4,458,735
              )
              
              (1,480,330
              )**Investing
                  Activities of Continuing Operations**Purchases
                  of property, plant and equipment
              
              
              (296,063
              )
              
              (338,155
              )Equipment
                  deposits paid
              
              
              (20,029,229
              )
              
              -Proceeds
                  from sale of securities available for sale, net
              
              
              4,075,000
              
              
              -Deferred
                  acquisition costs
              
              
              (774,700
              )
              
              (378,179
              )**Net
                  cash used in investing activities**
              
              
              (17,024,992
              )
              
              (716,334
              )**Financing
                  Activities of Continuing Operations**Repayment
                  of long-term debt
              
              
              (222,228
              )
              
              (222,228
              )Deferred
                  offering costs
              
              
              -
              
              
              (347,728
              )Proceeds
                  from issuance of stock, net
              
              
              -
              
              
              4,500**Net
                  cash used in financing activities**
              
              
              (222,228
              )
              
              (565,456
              )**Net
                  decrease in cash and cash equivalents**
              
              
              (21,705,955
              )
              
              (2,762,120
              )Cash
                  and cash equivalents at beginning of period
              
              
              42,582,697
              
              
              4,923,063Cash
                  and cash equivalents at end of period
              
              $
              20,876,742
              
              $
              2,160,943**Supplemental
                  disclosures:**Cash
                  paid for income taxes
              
              $
              -
              
              $
              8,870Cash
                  paid for interest
              
              
              89,322
              
              
              109,770**Non-cash
                  investing and financing activities**Stock-based
                  compensation
              
              
              133,649
              
              
              145,387Deferred
                  costs of public stock offering
              
              
              -
              
              
              314,161




The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.


-
          5
          -


**MMC
      ENERGY, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**June
      30, 2008**


**(Unaudited)**




**NOTE
      1 – ORGANIZATION AND LINE OF BUSINESS**




**General**




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and with the
      instructions to Form 10-Q. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements.





In
      the
      opinion of management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been included. However, the
      results from operations for the three and six month periods ended June 30,
      2008,
      are not necessarily indicative of the results that may be expected for the
      year
      ended December 31, 2008. These unaudited condensed consolidated financial
      statements should be read in conjunction with the consolidated December 31,
      2007
      financial statements and footnotes thereto included in the Company's Form 10-K
      filed with the Securities and Exchange Commission (the “SEC”).





**Organization
      and Line of Business**




The
      Company is an energy management company that acquires and actively manages
      electricity generating and energy infrastructure related assets in the United
      States. The Company seeks to acquire, directly or through joint ventures, a
      portfolio of small to mid-size electricity generating assets, generally below
      250 megawatts. In January 2006, the Company acquired two power generation
      facilities located in Chula Vista and Escondido, California, and in November
      2006, the Company acquired a facility in Bakersfield, California (“Mid-Sun”).
      The Company is pursuing additional acquisitions of small to medium-sized power
      generating facilities primarily in California, the Mid-Atlantic and the
      Northeastern United States. The Company has also begun the process of upgrading
      the Chula Vista and Escondido facilities.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Use
      of Estimates**





In
      the
      normal course of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America, management is
      required to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosure of contingent assets and liabilities
      at
      the date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Significant estimates made by management
      include the collectibility of accounts receivable, the useful life of
      depreciable assets, the valuation of stock options expense, the amounts due
      under accounts payable and the valuation allowance of deferred tax assets.
      Actual results could differ from those estimates.





**Basis
      of Consolidation**





These
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries: MMC Energy North America LLC, MMC Escondido LLC,
      MMC
      Chula Vista LLC, MMC Mid-Sun LLC, MMC Chula Vista II LLC and MMC Escondido
      II
      LLC. All intercompany accounts and transactions have been eliminated.





**Revenue
      Recognition**





The
      Company recognizes revenue from products and services, in accordance with SEC
      Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”
(“SAB 101”). SAB 101 requires that four basic criteria must be met
      before ** revenue
      can be recognized: (1) persuasive evidence of an arrangement exists; (2)
      delivery has occurred or services have been rendered; (3) the selling price
      is
      fixed and determinable; and (4) collectibility is reasonably assured.
      Determination of criteria (3) and (4) are based on management’s judgments
      regarding the fixed nature of the selling prices of the products
      delivered/services rendered and the collectibility of those amounts. Provisions
      for discounts and rebates to customers, estimated returns and allowances, and
      other adjustments are provided for in the same period the related sales are
      recorded. The Company defers any revenue for which the product has not been
      delivered or services have not been rendered or is subject to refund until
      such
      time that the Company and the customer jointly determine that the product has
      been delivered or services have been rendered or no refund will be
      required.


-
          6
          -





The
      Company records revenues in connection with delivering electricity and ancillary
      services, generally being on call to provide power on ten minutes notice to
      the
      California Independent System Operator (“CAISO”), or such other first parties as
      it may contract with directly from time to time. In the event that the Company
      is compensated for services before they are rendered, the Company records
      deferred revenue in the liability section of its balance sheet.





The
      Company’s electricity generating facilities are generally referred to as
“peaker” plants. Peaker plants are used to balance unexpected short term surges
      in demand, making them critical to the reliability, or “insurance,” of the power
      grids they serve. The Company’s revenues to date have been earned by providing
      resource adequacy capacity, ancillary services and energy production in the
      State of California.





·
            Resource
                Adequacy Capacity – Regulatory capacity payments for generators of any
                type are based strictly on total installed capacity measured in megawatts
                (“MW”). In the California market where the Company currently operates
                exclusively, market-based capacity revenues are earned through resource
                adequacy contracts, whereby the counterparty can point to the Company’s
                facilities' installed capacity as a source to supply its peak demand
                plus
                a mandatory safety margin as dictated by the California Public Utilities
                Commission (“CPUC”). The contract does not create an obligation to supply
                electricity to the counterparty, but does obligate the Company to
                bid its
                energy into the CAISO markets on a daily basis such that the Company’s
                capacity is available to the CAISO, if needed, at the Company’s price. The
                resource adequacy capacity amount cannot exceed the qualified capacity
                amount for the resource. Qualified capacity is certified by CAISO.
                For
                2007, the MMC Escondido and MMC Chula Vista facilities were certified
                by
                CAISO and the CPUC for 35.5 MW each and Mid-Sun for 22 MW, and for
                2008,
                35.5 MW each for the Escondido and Chula Vista facilities and MMC
                Mid-Sun
                for 21.8 MW.





·
              Ancillary
                  Services – Although there are several types of ancillary services, the
                  Company primarily provides “spin” and “non-spin” services which call for
                  the facilities to be delivering the awarded capacity within 10
                  minutes of
                  dispatch whether already synchronized to the grid (spin) or not
                  (non-spin). Spin services typically offer higher rates. As of October
                  9,
                  2007 Bear Energy L.P. (“Bear”), the Company’s scheduling coordinator,
                  advised the Company that it would no longer bid the Company’s facilities
                  into the spin services market due to regulatory uncertainty concerning
                  the
                  Company’s spin qualification with CAISO. See Note 10 “Commitments and
                  Contingent Liabilities” regarding the Company’s response to the CAISO’s
                  position and the Federal Energy Regulatory Commission’s (“FERC”)
                  resolution of the matter as of the report date.





·
            Energy
                Production – The Company provides electricity to a local power grid
                through day ahead and real time auctions managed by the CAISO, the
                “merchant market” or through financially settled bilateral agreements with
                a utility or other direct counterparty. As the Company has no outstanding
                electricity purchase agreements or other contracted energy production,
                all
                of its energy production revenues are earned in the daily merchant
                market.





**Income
      Taxes**





In
      accordance with Statement of Financial Accounting Standards ("SFAS") No. 109,
      deferred income taxes are the result of the expected future tax consequences
      of
      temporary differences between the financial statement and tax bases of assets
      and liabilities. Generally, deferred income taxes are classified as current
      or
      non-current in accordance with the classification of the related asset or
      liability. Those items not related to an asset or liability are classified
      as
      current or non-current depending on the periods in which the temporary
      differences are expected to reverse. A valuation allowance is provided against
      deferred income tax assets in circumstances where management believes the
      recoverability of a portion of the assets is not reasonably assured. Losses
      incurred will be carried forward as applicable per SFAS 109 and the Internal
      Revenue Code and potentially may be used to offset taxable net income generated
      in the future. The Company has no history of generating taxable net income
      and
      may not recognize any tax benefit on losses incurred currently nor has it in
      prior periods.





**Cash
      Equivalents**





For
      purposes of the Statement of Cash Flows, the Company considers all time deposits
      and highly liquid debt instruments purchased that mature in three months or
      less
      to be cash equivalents.


-
          7
          -





**Receivables**





Accounts
      receivable are composed substantially of trade accounts receivable that arise
      primarily from the sale of goods or services on account and are stated
      at
      historical cost. Management evaluates accounts receivable to estimate the amount
      of accounts receivable that will not be collected in the future and records
      a
      provision for that amount. The provision for doubtful accounts is recorded
      as a
      charge to operating expense, while the credit is recorded in the allowance
      for
      doubtful accounts, which reduces accounts receivable. The estimated allowance
      for doubtful accounts is based primarily on management's evaluation of the
      aging
      of the accounts receivable balance, the financial condition of its customers,
      historical trends, and time outstanding of specific balances. Actual collections
      of accounts receivable could differ from management's estimates due to changes
      in future economic, industry or customer financial conditions. Unbilled
      receivables are for amounts due to the Company for revenues earned in a given
      period but not yet billed to the customer.





**Inventories**





Inventories
      are stated at cost based on the specific identification method. Inventories
      consist of spare parts to be used in general operations and maintenance.





**Securities
      Available for Sale**





S ecurities
      Available-for-sale are accounted for under SFAS No. 115 “Accounting for Certain
      Investments in Debt and Equity Securities.” Securities available for sale are
      carried at fair value with the unrealized gains or losses, net of tax, included
      as a component of accumulated other comprehensive income (loss) in stockholders'
      equity. Realized gains and losses and declines in value judged to be
      other-than-temporary on available-for-sale securities are included in other
      income, net. The fair values for marketable debt and equity securities are
      based
      on quoted market prices. Although the Company has carried
      securities-available-for-sale in prior periods these securities did not generate
      unrealized gains or losses; as such to date the company has never recognized
      other comprehensive income (loss) as a component of stockholders’ equity.





**Property,
      Plant and Equipment**





Property
      and equipment are stated at cost. Depreciation is computed principally by the
      straight-line method at rates based on estimated useful lives as
      follows:




Office
                equipment
            
            
            3
                yearsMachinery,
                automobiles and equipment
            
            
            3
                - 10 yearsSoftware
            
            
            3
                years





**Long-Lived
      Assets**





In
      accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of
      Long-Lived Assets,'' long-lived assets are reviewed for impairment annually
      and
      whenever events or changes in circumstances indicate that the carrying amount
      of
      an asset may not be recoverable. If an indicator of impairment exists for any
      grouping of assets, an estimate of undiscounted future cash flows is produced
      and compared to its carrying value. If an asset is determined to be impaired,
      the loss is measured by the excess of the carrying amount of the asset over
      its
      fair value as determined by an estimate of discounted future cash
      flows.





**Concentrations
      of Credit Risk**





Financial
      instruments and related items, which potentially subject the Company to
      concentrations of credit risk, consist primarily of cash and cash equivalents
      and accounts receivable. The Company places its cash and temporary cash
      investments with high credit quality institutions. At times, such investments
      may be in excess of the FDIC insurance limit for each institution.





Concentration
      of credit risk with respect to accounts receivable and revenues are high due
      to
      the small number of entities comprising the Company's customer base. For the
      three months ending June 30, 2008 and 2007, 62% and 53%, respectively, of the
      Company’s revenues were derived from one customer, Oxy, Inc (“Oxy”); a company
      which carries a senior debt rating of A3 as per Moody’s Rating Service. The
      Company received the balance of its revenues from CAISO.





-
          8
          -


For
        the
        six months ending June 30, 2008 and 2007, 70% & 57%, respectively of the
        Company’s revenues were derived from Oxy. The Company received the balance of
        its revenues from CAISO.


**Seasonal
      Nature of Business**





The
      Company’s business is seasonal, with a relatively high proportion of revenues
      and operating cash flows generated during the third quarter of the fiscal year,
      which include the peak summer months for energy demand, and a relatively low
      proportion of revenues and operating cash flows generated during the first
      quarter. As the Company derives most of its revenues from selling energy and
      ancillary services at spot market prices, as opposed to under longer term
      fixed-price contracts, its revenues and operating income are highly exposed
      to
      the seasonal fluctuation in commodity pricing, which generally corresponds
      to
      peak electricity demand. In addition, commencing in 2008, a portion of the
      Company’s resource adequacy capacity revenues are seasonal as well, with a
      significantly greater portion paid during the summer.





**Geographical
      and Regulatory Risk**





All
      of
      the Company’s facilities are located in Southern California, and generally
      provide electricity only in that state. The facilities maintain exempt wholesale
      generator (“EWG”) status and market based rate (“MBR”) authority as approved by
      the Federal Energy Regulatory Commission. Accordingly, the Company’s operations
      are regulated by the local Air Permit Control Boards, the CAISO and other
      related state and local agencies, as well as the Federal Energy Regulatory
      Commission. These organizations establish certain rules and limitations on
      operations and require that the Company maintain in good standing several
      required licenses and permits, such as permits for air emissions. These
      organizations may from time to time change the rules under which the Company
      operates and derives its revenues. The Company believes it has all such required
      licenses and permits to conduct its operations and believes that it is
      conducting those operations in compliance with said licenses and permits.





**Comprehensive
      Income**





SFAS
      No.
      130, “Reporting Comprehensive Income,” (“SFAS 130”) establishes standards for
      reporting and displaying of comprehensive income, its components and accumulated
      balances. Comprehensive income is defined to include all changes in equity
      except those resulting from investments by owners and distributions to owners.
      Among other disclosures, SFAS 130 requires that all items that are required
      to
      be recognized under current accounting standards as components of comprehensive
      income be reported in a financial statement that is displayed with the same
      prominence as other financial statements. In the past the Company held
      securities-available-for-sale that could have generated other comprehensive
      income (losses) but traded at par for the duration they were held. As such,
      the
      Company does not have any items of comprehensive income in the periods presented
      nor has it since its inception.





**Segment
      Information**




The
      Company adopted SFAS No. 131, “Disclosures about Segments of an Enterprise and
      Related Information” ("SFAS 131"). SFAS 131 establishes standards for reporting
      information regarding operating segments, to the extent that multiple discrete
      segments exist, in annual financial statements and requires selected information
      for those segments to be presented in interim financial reports issued to
      stockholders. SFAS 131 also establishes standards for related disclosures about
      products and services and geographic areas. Operating segments are identified
      as
      components of an enterprise about which separate discrete financial information
      is available for evaluation by the chief operating decision maker, or decision
      making group, in making decisions concerning how to allocate resources and
      assess performance. As per the evaluation of management the Company, at this
      stage, does not contain multiple discrete segments.





**Basic
      and Diluted Earnings (Loss) Per Share**




Basic
      and
      diluted income or loss per common share is based upon the weighted average
      number of common shares outstanding during the three and six month periods
      ended
      June 30, 2008 and 2007, under the provisions of SFAS No. 128, “Earnings Per
      Share” and as amended/superseded in SFAS No. 123(R), “Share-Based Payment”(“SFAS
      123(R)”). As the Company incurred losses for the three and six month periods
      ending June 30, 2008 and 2007 dilutive shares presented for those periods are
      identical with basic shares outstanding. Below
      is
      a reconciliation of basic to diluted shares outstanding for the applicable
      periods as well as anti-dilutive shares excluded from calculations for the
      relevant periods:  ****


-
          9
          -





**Three Months Ended**
              **June 30,**
            
            **Three Months Ended**
              **June 30,**
            
            **Six Months Ended**
              **June 30,**
            
            **Six Months Ended**
              **June 30,****2008**
            
            
            **2007**
            
            
            **2008**
            
            
            **2007****Basic, diluted and anti-dilutive
                shares**Weighted
                average shares outstanding - basic
            
            
            14,144,347
            
            
            4,811,438
            
            
            14,057,912
            
            
            4,807,073Dilutive
                effect of assumed exercise of employee stock options, warrants and
                immediate vesting of unvested stock awards
            
            
            -
            
            
            -
            
            
            -
            
            
            -Weighted
                average shares outstanding - diluted
            
            
            14,144,347
            
            
            4,811,438
            
            
            14,057,912
            
            
            4,807,073Anti-dilutive
                shares excluded from diluted EPS computations
            
            
            724,559
            
            
            153,762
            
            
            747,381
            
            
            173,902




**Stock-Based
      Compensation**





The
      Company uses the modified prospective method to adopt SFAS 123(R), which
      requires compensation expense to be recorded for all stock-based compensation
      granted on or after January 1, 2006, as well the unvested portion of previously
      granted options. The Company is recording the compensation expense on a
      straight-line basis, generally over the explicit service period of three years
      (except for retirement eligible employees and retirees). The Company made no
      stock-based compensation grants before January 1, 2006 and therefore has no
      unrecognized stock compensation related liabilities or expense unvested or
      vested prior to 2006.





The
      following table summarizes common stock options outstanding and the related
      exercise prices under the Company’s 2006 Equity Incentive Plan.





**Options Outstanding**
            
            **Options Exercisable****Grant Year**
            
            **Exercise Prices**
            
            **Number**
              **Outstanding**
            
            **Weighted Average**
              **Remaining**
              **Contractual Life**
              **(Years)**
            
            **Weighted Average**
              **Exercise Price**
            
            **Number**
              **Exercisable**
            
            **Weighted**
              **Average**
              **Remaining**
              **Contractual Life**
            
            **Weighted**
              **Average**
              **Exercise Price**2006
            
            $
            10.00
            
            
            72,000
            
            
            7.87
            
            $
            10.00
            
            
            64,666
            
            
            7.87
            
            $
            10.002007
            
            $
            6.50
            
            
            21,000
            
            
            8.83
            
            $
            6.50
            
            
            7,000
            
            
            8.83
            
            $
            6.50**Totals**
            
            
            
            
            
            93,000
            
            
            8.09
            
            $
            9.21
            
            
            71,666
            
            
            7.97
            
            $
            9.66





Transactions
      during 2008 involving stock options issued to employees are summarized as
      follows:





****
            
            **Number of Shares**
            
            **Weighted Average**
              **Price Per Share****Outstanding at
                December 31, 2007**
            
            
            93,000
            
            $
            9.21Granted
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Cancelled
                or expired
            
            
            -
            
            
            -**Outstanding
                at June 30, 2008**
            
            
            **93,000**
            
            **$**
            **9.21**




Based
      on
      the Company’s closing stock price of $2.25 on June 30, 2008, all stock options
      currently outstanding have no aggregate intrinsic value, and there were no
      in-the-money options exercisable. As of June 30, 2008, all exercisable options
      had a weighted-average remaining contractual life of 7.97 years and
      weighted-average exercise price of $9.66 per share.





For
      the
      three and six month periods ended June 30, 2008 and 2007 there were zero and
      21,000 options granted, respectively.





**Derivative
      Instruments**





The
      Company accounts for freestanding derivative financial instruments potentially
      settled in its own common stock under Emerging Issues Task Force ("EITF") Issue
      No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and
      Potentially Settled in, a Company's Own Stock.” Pursuant to EITF Issue No.
      00-19, the Company is required to recognize the initial fair value of the
      applicable contracts (consisting primarily of non-employee stock warrants and
      options to purchase common stock) as an asset or liability, and subsequently
      measure the change in the fair value (based on a Black-Scholes computation),
      with gains and losses included in a statement of operations. No
      such
      instruments were issued for the six month periods ended June 30, 2008 and 2007.


-
          10
          -




**Fair
      Value of Financial Instruments**





The
      carrying amounts of the Company's cash, trade payables, accrued expenses, and
      notes payable approximate their estimated fair value due to the short-term
      nature of those financial instruments. In June 2006, the Company issued warrants
      to purchase 45,000 shares of common stock at an exercise price of $0.10 per
      share. These warrants were issued in lieu of cash as payment for professional
      services rendered to the Company. The warrants were valued at the fair value
      of
      the professional services received as determined by usual and customary fees
      associated with such services in transactions between unrelated parties. These
      warrants were exercised in their entirety by the end of the second quarter
      of
      2007 and none remain outstanding.





**Recent
      Accounting Pronouncements**





*SFAS
      No. 163* .
      In May
      2008, the Financial Accounting Standards Board (the “FASB”) issued Statement on
      Financial Accounting Standards (“SFAS”) No. 163, “Accounting for Financial
      Guarantee Insurance Contracts - an interpretation of SFAS No. 60” (“SFAS 163”).
      Diversity exists in practice in accounting for financial guarantee insurance
      contracts by insurance enterprises under FASB Statement No. 60, Accounting
      and
      Reporting by Insurance Enterprises. That diversity results in inconsistencies
      in
      the recognition and measurement of claim liabilities because of differing views
      about when a loss has been incurred under SFAS No. 5 “Accounting for
      Contingencies.” SFAS No. 163 is effective for financial statements issued for
      fiscal years beginning after December 15, 2008, and all interim periods within
      those fiscal years, except for some disclosures about the insurance enterprise’s
      risk-management activities. The Company does not expect that the adoption of
      this standard will have any impact on its financial position, results of
      operations or cash flows.





*SFAS
      No. 162* .
      In May
      2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
      Accounting Principles” which identifies the sources of accounting principles and
      the framework for selecting the principles to be used in the preparation of
      financial statements of nongovernmental entities that are presented in
      conformity with generally accepted accounting principles (GAAP) in the United
      States (the GAAP hierarchy). The FASB believes that the GAAP hierarchy should
      be
      directed to entities because it is the entity (not its auditor) that is
      responsible for selecting accounting principles for financial statements that
      are presented in conformity with GAAP. Accordingly, the FASB concluded that
      the
      GAAP hierarchy should reside in the accounting literature established by the
      FASB and issued SFAS No. 162 to achieve that result. SFAS No. 162 is effective
      60 days following the SEC’s approval of the Public Company Accounting Oversight
      Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity
      With Generally Accepted Accounting Principles.” As of the report date approval
      has not yet taken place. As the Company is not an insurance enterprise and
      does
      not engage in any insurance enterprise related activities the Company does
      not
      expect that the adoption of this standard will have a material impact on its
      financial position, results of operations or cash flows.





*SFAS
      No. 161* .
      In
      March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities - An Amendment of FASB Statement No. 133”
(“SFAS 161”). SFAS 161 enhances required disclosures regarding derivatives and
      hedging activities, including enhanced disclosures regarding how: ( *a* )
      an
      entity uses derivative instruments; ( *b* )
      derivative instruments and related hedged items are accounted for under SFAS
      133 *;* and
      ( *c* )
      derivative instruments and related hedged items affect an entity's financial
      position, financial performance, and cash flows. Specifically, SFAS No. 161
      requires:  disclosure
      of the objectives for using derivative instruments in terms of underlying risk
      and accounting designation;  disclosure
      of the fair values of derivative instruments and their gains and losses in
      a
      tabular format;  disclosure
      of information about credit-risk-related contingent features; and  cross-reference
      from the derivative footnote to other footnotes in which derivative-related
      information is disclosed. SFAS 161 is effective for fiscal years and interim
      periods beginning after November 15, 2008. The Company does not expect that
      the
      adoption of this standard will have a material impact on its financial position,
      results of operations or cash flows.





*SFAS
      No.160.* In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”).
      SFAS 160 requires that a non-controlling interest in a subsidiary be reported
      as
      equity and the amount of consolidated net income specifically attributable
      to
      the non-controlling interest be identified in the consolidated financial
      statements. It also requires consistency in the manner of reporting changes
      in
      the parent’s ownership interest and requires fair value measurement of any
      non-controlling equity investment retained in a deconsolidation. The Company
      will apply the provisions of this statement prospectively, as required,
      beginning on January 1, 2009 and does not expect the adoption of SFAS 160 to
      have a material effect on its consolidated financial statements.





*SFAS
      141(R)* .
      In
      December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
      Combinations” (“SFAS 141 (R)”).
      SFAS 141(R) retains the fundamental requirements in Statement 141 that the
      acquisition method of accounting (which Statement
      141 called the purchase method) be used for all business combinations and for
      an
      acquirer to be identified for each business combination. In general, the
      statement 1) broadens the guidance of SFAS 141, extending its applicability
      to
      all events where one entity obtains control over one or more other businesses,
      2) broadens the use of fair value measurements used to recognize the assets
      acquired and liabilities assumed, 3) changes the accounting for acquisition
      related fees and restructuring costs incurred in connection with an acquisition
      and 4) increases required disclosures. SFAS 141R applies prospectively to
      business combinations for which the acquisition date is on or after the
      beginning of the first annual reporting period beginning on or after December
      15, 2008. Earlier *adoption is prohibited.* The
      Company will apply the provisions of this statement prospectively to business
      combinations for which the acquisition date is on or after January 1, 2009.
      The
      Company believes there will be no impact of adoption of SFAS 141(R) on its
      prior
      period consolidated financial statements.


-
          11
          -





**Reclassifications**





Certain
      reclassifications have been made to conform prior period data to the current
      presentation. These reclassifications had no effect on reported
      losses.





**NOTE
      3 – RECEIVABLES AND PREPAID ITEMS**




At
      June
      30, 2008 and December 31, 2007 accounts receivable and prepaid items consisted
      of the following:





**June 30,**
            
            **December 31,****2008**
            
            **2007**Accounts
                receivable
            
            $
            229,938
            
            $
            62,855Allowance
                for doubtful accounts
            
            
            -
            
            
            -Total
            
            $
            229,938
            
            $
            62,855Unbilled
                receivables
            
            $
            318,247
            
            $
            -Total
            
            $
            318,247
            
            $
            -Prepaid
                insurance
            
            $
            129,209
            
            $
            114,785Prepaid
                expenses
            
            
            138,832
            
            
            100,469Short-term
                deposits
            
            
            500
            
            
            -Total
            
            $
            268,541
            
            $
            215,254





Commencing
      in 2008, the Company is paid monthly in arrears on its resource adequacy
      capacity contracts versus monthly in advance as was the case in 2007. 
Commencing in March 2008, the Company is paid under its energy management
      agreement with Bear Energy LP for revenues earned from CAISO for energy and
      ancillary services approximately 60 days in arrears versus 20 days in arrears
      in
      prior periods. Accordingly, unbilled receivables reflect two months of such
      revenues as of June 30, 2008 vs. one month as of December 31, 2007.





**NOTE
      4 – SECURITIES AVAILABLE FOR SALE**





Securities
      Available-for-sale are accounted for under SFAS No. 115 “Accounting for Certain
      Investments in Debt and Equity Securities.” Securities available for sale are
      carried at fair value with the unrealized gains or losses, net of tax, included
      as a component of accumulated other comprehensive income (losses) in
      stockholders' equity. Realized gains and losses and declines in value judged
      to
      be other-than-temporary on available-for-sale securities are included in other
      income, net. The fair values for marketable debt and equity securities are
      based
      on quoted market prices. Securities available for sale, in the past, consisted
      of municipal variable-rate demand notes (“VRDNs”). VRDNs are long-term bonds
      that have an embedded put option. This put option is at par (100%)
      and is 7 days from the point of exercise.  Thus, rolling
      liquidity is available on this position on trade date plus seven days
      basis. In addition due to the presence of the put the VRDNs are generally
      never subject to a change in market value and thus do not generate any
      mark-to-market adjustments except in extraordinary market situations. These
      VRDNs belong to a broader group known as Auction Rate Securities. The Company
      sold these securities at face value in the current quarter and did not incur
      any
      gains or losses on such disposition. At the report date the Company had no
      instruments classified as securities available for sale.


-
          12
          -





**NOTE
      5 – PROPERTY, PLANT AND EQUIPMENT**





At
      June
      30, 2008 and December 31, 2007 property, plant and equipment consisted of the
      following:





**June 30,**
            
            **December 31,****2008**
            
            **2007**Land
            
            $
            375,000
            
            $
            375,000Automobile
            
            
            21,927
            
            
            21,927Office
                equipment
            
            
            144,642
            
            
            115,825Machinery,
                equipment & other
            
            
            8,193,231
            
            
            7,925,9858,734,800
            
            
            8,438,737Accumulated
                depreciation
            
            
            (2,312,245
            )
            
            (1,717,584
            )**Total**
            
            $
            6,422,555
            
            $
            6,721,153




Depreciation
      for the three months ended June, 2008 and 2007 was $300,339
      and $279,222, respectively.





Depreciation
      for the six months ended June, 2008 and 2007 was $594,661
      and $516,185, respectively.





**NOTE
      6 – DEFERRED COSTS**





Deferred
      costs in connection with acquisitions and capital raises are accounted for
      based
      upon their stage in the acquisition/financing process. Costs of acquisitions
      and
      or financings can be broadly classified in four categories: exploratory,
      pre-acquisition, in-process and in-service. Typically, exploratory costs are
      expensed as incurred. When a financing or acquisition is determined to be
      probable as per management’s assessment, all costs in connection with such
      transaction are eligible to be capitalized at the assessment date as well as
      throughout the actual implementation. When the acquisition is completed, related
      deferred costs are capitalized as a component of the asset cost basis and
      depreciated over the useful life of the asset. Deferred costs related to the
      Company’s public stock offering consummated in July 2007 were offset directly
      against the gross proceeds of said offering. Outstanding deferred costs
      consisted primarily of $3,244,837 of the costs for the Company’s two re-powering
      projects at Chula Vista and Escondido, and $407,219 of costs incurred in
      connection with the Company’s $25.5 million debt financing facility (the
“Facility”) with GE Energy Financial Services (“GE Finance”), consummated on
      June 30, 2008.


**June
                  30,**
              
              **December
                  31,****Deferred
                  Costs**
              
              **2008**
              
              **2007**Deferred
                  development costs - Chula Vista
              
              $
              2,867,673
              
              $
              2,202,176Deferred
                  development costs - Escondido
              
              
              377,164
              
              
              286,580Deferred
                  financing costs - GE Financial
              
              
              407,219
              
              
              -Total
              
              $
              3,652,056
              
              $
              2,488,756


**NOTE
      7 – LONG-TERM DEPOSITS**





Long-term
      deposits consist primarily of contractually scheduled prepayments related to
      two
      agreements entered into with GE Packaged Power, Inc. for the purchase of two
      LM-6000 turbines for the Chula Vista Upgrade Projects and one LM-6000 turbine
      for the Escondido Upgrade Project. Long-term deposits also include a security
      deposit for the land lease of the Company’s Chula Vista facility. Through the
      six months ended June 30, 2008 the Company has made approximately $20.0 million
      in scheduled deposit payments.





**NOTE
      8 – OTHER ASSETS & DEFERRED CHARGES**





Other
      assts and deferred charges consist of $325,638 of deferred maintenance charges
      in connection with Planned Major Maintenance Activities (“PMMA”) for large
      assets, net of amortization. The cost of these PMMA are accounted for in
      accordance with the deferral method as described in FASB Staff Position’s “Audit
      Guide for Airlines” (“FSP-AIR”). As such PMMA costs are capitalized and then
      recognized over the earlier of (i) the remaining life of the asset or (ii)
      until
      the next PMMA for that equipment. For the three months ending June 30, 2008
      and
      2007, the company amortized $32,562 and $0 of deferred maintenance charges,
      respectively.


-
          13
          -





For
      the
      six months ending June 30, 2008 and 2007, the Company amortized $65,124 and
      $0
      of deferred maintenance charges, respectively.





**NOTE 9
      – LONG-TERM DEBT**





On
      January 31, 2006, MMC North America entered into a Loan and Security Agreement
      (the “Loan Agreement”) with TD Banknorth (the “Bank”), for a $3.5 million senior
      debt facility, including a $3.0 million term loan (the “Term Loan”) and a
      $500,000 revolving loan (the “Revolver,” together with the Term Loan, the
“Loans”). The Term Loan provides for interest payments only for the first eight
      months, and 81 monthly principal payments in the amount of $37,038 each
      thereafter, with a final maturity date of May 3, 2013. The Term Loan bears
      interest at a fixed rate equal to 7.58%. Approximately $2.1 million of the
      Term
      Loan proceeds were funded into an escrow account under control of the Bank
      and
      restricted in use to valid repair and re-commissioning costs in accordance
      with
      a re-commissioning plan agreed to between MMC North America and the Bank. The
      remaining proceeds, net of related transaction costs, were used for general
      working capital purposes. All escrowed funds for repair and re-commissioning
      were expended for the intended use.





Advances
      against the Revolver are payable on demand and bear interest at the Prime Rate
      plus 1.00%. Amounts outstanding under the Revolver must be repaid in full and
      a
      zero balance maintained for at least 30 consecutive days at any time during
      the
      year. MMC North America has not made any borrowings under the
      Revolver.





The
      Loan
      Agreement places certain restrictions on MMC North America’s ability to make
      distributions to the Company and on transactions with affiliates. The Loan
      Agreement further subjects MMC North America to certain financial and other
      covenants, including maintaining a minimum Net Worth and minimum Debt Service
      Coverage ratio. The financial covenants are measured annually. During the last
      measurement of these covenants, for the twelve months ended December 31, 2007,
      the Company was in compliance with all covenants .
      The
      loans are collateralized by substantially all assets of MMC North
      America.




On
      June
      30, 2008 the Company’s wholly owned subsidiaries, MMC Chula Vista II and MMC
      Escondido II, entered into a loan facility with GE Energy Financing Services,
      or
      GE Finance, in connection with the Company’s purchase of three GE LM-6000 PC
      Sprint(r) natural gas-fired turbines from GE Energy, as described above.




The
      loan
      facility with GE Finance allows the Company’s subsidiaries to borrow the $25.5
      million, provided that the Company first contributes equity capital to each
      subsidiary sufficient to cover the balance of the turbines' purchase price,
      among other customary conditions. Loans made under the facility bear interest
      at
      the prime rate plus 2.75% and are fully guaranteed by the Company. GE Finance
      has obtained a right of first refusal to provide the full project debt financing
      to each of the projects upon receipt of final permitting. The loans are due
      in
      full 150 days after the final turbine is ready to ship, and carry prepayment
      penalties if prepaid in the first 12 months or in the event the projects proceed
      with debt other than from GE Finance. The loans also include an unused annual
      line fee of 0.5% on the difference between the outstanding loan balance and
      the
      total commitment of $25.5 million. The facility also places certain restrictions
      on the subsidiaries’ ability to make distributions to the Company and with
      respect to maintaining the turbines as collateral among other covenants typical
      of such equipment loans. The
      loans
      are collateralized by substantially all assets of the subsidiaries.





As
      of the
      date of this report, there have been no borrowings under the GE Finance
      facility.





**NOTE 10
      – COMMITMENTS AND CONTINGENT LIABILITIES**





In
      February 2007, the Company announced that it had learned that one hundred
      thousand shares of its common stock issued as part of a 1.2 million share
      private placement transaction it consummated in May 2006 were purchased by
      an
      entity controlled by Louis Zehil, who at the time of the purchase was a partner
      of the Company’s external legal counsel for the private placement transaction,
      McGuireWoods LLP. The Company also announced that it believes that Mr. Zehil
      improperly caused the Company’s former transfer agent not to place a required
      restrictive legend on the certificate for these one million shares and that
      Mr.
      Zehil then caused the entity he controlled to resell these shares. The Company
      reported Mr. Zehil’s conduct to the SEC and, subsequently, the SEC recently sued
      Mr. Zehil in connection with this matter further alleging that Mr. Zehil engaged
      in a similar fraudulent scheme with respect to six additional public companies
      represented at the relevant time by McGuireWoods LLP.


-
          14
          -





Persons
      who purchased shares directly from Mr. Zehil when he resold his shares may
      have
      a rescission right versus Mr. Zehil, and could make the claim that this
      rescission right somehow extends to the Company as well. One or more of the
      Company’s investors from the Company’s May 2006 private placement of 1.2 million
      shares could also claim a rescission right. It is also possible that one or
      more
      of the Company’s stockholders could claim that they somehow suffered a loss as a
      result of Mr. Zehil’s conduct and attempt to hold the Company responsible for
      their losses. The Company is unable to predict the extent of its ultimate
      liability with respect to any and all future securities matters. If any such
      claims are successfully made against the Company and it is not adequately
      indemnified for those claims from available sources of indemnification, then
      such claims could have a material adverse effect on the Company’s financial
      condition and operating results. The Company also may incur significant costs
      resulting from its investigation of this matter, any litigation it may initiate
      as a result and the Company’s cooperation with governmental authorities. The
      Company may not be adequately indemnified for such costs from available sources
      of indemnification.





MMC
      North
      America has arranged for the continuation of an irrevocable letter of credit
      in
      the amount of $100,000 (the “Letter of Credit”) to a counterparty with whom it
      originally entered into an energy services agreement in November 2006 (the
      “ESA”). The counterparty may draw upon the Letter of Credit to recover
      liquidated damages suffered by the counterparty in connection with any energy
      sales it may make on behalf of MMC North America and MMC Mid-Sun in the event
      MMC North America or MMC Mid-Sun fails to meet its obligations, or for any
      other
      unsatisfied obligations under the ESA. The Letter of Credit expires on February
      28, 2009. Availability under the Revolver is reduced from $500,000 to $400,000
      while the Letter of Credit remains outstanding.





On
      January 29, 2008, the Company entered into an agreement to purchase two LM-6000
      turbines from GE Packaged Power, Inc. in connection with its Chula Visa Upgrade
      Project. The total cost of these turbines is approximately $31.0 million. The
      Company will make scheduled deposit payments for the purchase price of the
      turbines through March 2009, the expected delivery date of the turbines. Through
      the date of this report, the Company has made approximately $14.5 million in
      scheduled payments.




On
      May
      15, 2008, the Company entered into an agreement to purchase one LM-6000 turbine
      from GE Packaged Power, Inc. in connection with its Escondido Upgrade Project.
      The total cost of the turbine is approximately $15.3 million. The Company will
      make scheduled deposit payments for the purchase price of the turbines through
      December 2008, the expected delivery date of the turbines. Through the date
      of
      this report, the Company has made approximately $4.8 million in scheduled
      payments.





As
      the
      Company’s facilities are located in California, they are exposed to the risk of
      potential damage from a catastrophic event such as an earthquake.  In
      addition, the Chula Vista facility lies within a designated flood plane and
      is
      therefore potentially at risk if subject to a 100 year flood event.  While
      the Company generally insures its facilities at replacement cost, the Company’s
      insurance policy imposes a $1 million limit on claims resulting from an
      earthquake or flood.  Supplemental coverage for these risks is cost
      prohibitive and therefore the Company has foregone purchasing such coverage
      and,
      effectively self insures for these risks.  Accordingly, should any of the
      Company’s facilities be damaged by such an event, the insurance proceeds to the
      Company may not be sufficient to cover the costs required to restore such
      facilities to operating condition.  Furthermore, should such a catastrophic
      event result in the permanent loss of any of its three facilities, the Company
      believes the insurance proceeds would not be sufficient to recover the loss
      of
      future cash flows, or expected market value, of the facility.





On
      June
      6, 2008, the FERC issued an order rejecting the Company’s arguments that its
      facilities comply with the CAISO's tariff to provide spinning reserve services,
      and that it be allowed to resume bidding into this market. The FERC did,
      however, direct the CAISO to reimburse the Company for disputed charges related
      to spinning reserve revenues earned prior to and including September 18, 2006,
      and directed that a settlement judge be appointed to conduct settlement
      negotiations in an effort to resolve disputes as to any further reimbursements
      for contested charges subsequent to September 18, 2006. Although not discussed
      in the FERC's order, the CAISO has asserted that it is entitled to recover
      additional spinning reserve revenues paid to the Company since September 18,
      2006; however, the Company disputes this position. On July 7, 2008, the Company
      filed a request for rehearing of the FERC's ruling and it continues to evaluate
      other legal remedies. Also on July 7, the CAISO filed a request for rehearing
      with respect to the recovery of the pre-September 18, 2006 disputed charges
      awarded to us. The requests for rehearing remain pending before the
      FERC.





The
      Company is unable to gauge the extent of its ultimate relief or any liability
      with respect to this and any and all future regulatory matters. The costs and
      other effects of any future litigation, regulatory proceedings, legal and
      administrative cases, settlements, judgments, claims and changes in this matter
      will not have a material adverse effect on the Company’s financial condition and
      liquidity but may have a material impact on future operating
      results.




The
      Company’s primary office space is currently leased through December 31, 2010.
      Additionally, in February 2008, the Company opened an office in San Diego which
      is currently leased through March 2009.


-
          15
          -





The
      Company has consulting agreements with outside contractors to provide various
      services. The Agreements are generally for a term of 12 months from inception
      and renewable automatically from year to year unless either the Company or
      the
      Consultant terminates such engagement by written notice.





The
      Company is subject to legal proceedings and claims which arise in the ordinary
      course of its business. Although occasional adverse decisions or settlements
      may
      occur, the Company believes that the final disposition of such matters should
      not have a material adverse effect on its financial position, results of
      operations or liquidity. Neither the Company nor any subsidiary has any
      involvement in any material legal proceeding as of the report date.





**NOTE 11
      – EQUITY COMPENSATION**





Under
      the
      Company’s 2006 Equity Incentive Plan (the “Plan”), 500,000 shares of common
      stock were reserved for issuance as incentive awards to executive officers,
      key
      employees and directors and outside consultants. As of June 30, 2008, 93,000
      shares have been granted to employees, net of cancellations, in the form of
      stock option grants, with a weighted average exercise price of $9.21 per share,
      consistent with the market value of the Company’s common stock at the time of
      issuances. An additional 245,836 shares of restricted stock have been granted
      to
      employees and directors. As of June 30, 2008, 161,164 shares are available
      for
      issue under the Plan.





During
      the three months ended June 30, 2008 and 2007 the company issued zero shares
      of
      restricted stock to its employees.





During
      the six months ended June 30, 2008 and 2007 the company issued 227,000 and
      2,561
      shares of restricted stock to its employees, respectively.





**NOTE
      12 – STOCKHOLDERS' EQUITY**





During
      the quarter ended June 30, 2008, the Company issued 0 shares of restricted
      stock
      to its employees as compensation. As of the date of this report, the Company
      had
      300,000,000 shares authorized under its Certificate of Incorporation and had
      issued and outstanding 14,144,347 shares of Common Stock. As of such date,
      the
      Company also had 10,000,000 shares of preferred stock authorized under its
      Certificate of Incorporation, none of which was issued or
      outstanding.





On
      April
      19, 2007, the Company effected a one-for-ten reverse stock split of its
      outstanding shares of common stock, $0.001 par value. Total authorized shares
      and par value remain unchanged. All references in the financial statements
      and
      notes to financial statements, numbers of shares and share amounts have been
      retroactively restated to reflect the reverse split, unless explicitly stated
      otherwise.





On
      July
      5, 2007, the Company completed a public offering of 9,090,910 shares of its
      common stock at $5.50 per share pursuant to a Form SB-2 Registration Statement
      under the Securities Act of 1933.





During
      the six months ended June 30, 2008 and 2007 the Company has issued 227,000
      and
      2,561 shares of restricted stock as compensation for its employees and
      directors.





**NOTE
      13 – RELATED PARTY TRANSACTIONS**





The
      Company had no related party transactions for the three and six month periods
      ended June 30, 2008 and 2007.





**NOTE
      14 – SUBSEQUENT EVENTS**





On
      July
      7, 2008 the Company announced that it received an Authority to Construct permit
      from the San Diego Air Pollution Control District, the final regulatory approval
      required to commence its Escondido Energy Upgrade Project. The Company announced
      in February the receipt of a Conditional Use Permit from the City of Escondido,
      which was the other major permit required to commence the Upgrade Project.
      The
      Escondido Upgrade Project is now fully permitted.




-
          16
          -


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS**




*The
      following discussion should be read in conjunction with the consolidated
      financial statements and notes thereto included in our public filings, including
      this report* **.**





*Information
      contained in this filing contains “forward-looking statements” which can be
      identified by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” “anticipates” or comparable terminology, or
      by discussions of strategy. We cannot assure you that the future results covered
      by these forward-looking statements will be achieved. Some of the matters
      described in the “Risk Factors” section of our Annual Report on Form 10-K and in
      our other public filings constitute cautionary statements which identify factors
      regarding these forward-looking statements, including certain risks and
      uncertainties that could cause actual results to vary materially from future
      results indicated in these forward-looking statements. Other factors could
      also
      cause actual results to vary materially from future results indicated in such
      forward-looking statements.*




**Overview**





We
      are an
      energy management company that acquires and actively manages electricity
      generating and energy infrastructure related assets in the United States. Our
      mission is to acquire, directly or through joint ventures, a portfolio of small
      to mid-size electricity generating assets, generally below 250 megawatts, or
      “MW.” To date, we have acquired three electricity generating assets in
      California, totaling 110 MW of capacity and are in the process of upgrading
      two
      of these assets. We are also pursuing additional acquisitions of small to
      medium-sized power generating facilities primarily in California, the
      Mid-Atlantic states and the Northeastern portion of the United States. Our
      natural gas fueled electricity generating facilities are commonly referred
      to as
“peaker” plants. Our plants are used to balance unexpected short term surges in
      demand, making them critical to the reliability, or “insurance,” of the power
      grids they serve. Our assets generate revenue from providing capacity and
      ancillary reliability services to transmission grids that distribute electricity
      to industrial and retail electricity providers. During peak electricity usage
      times, such as the summer, we also sell our electricity in the daily merchant
      market.





Our
      primary business strategy is to create long-term value by focusing on five
      core
      principles:





*
      Targeting transmission and electricity constrained regions





*
      Acquiring, developing and operating electricity generating and infrastructure
      related assets





*
      Restructuring acquired assets to maximize revenues





*
      Managing risk to optimize profitability





*
      Opportunistically partnering to develop renewable energy generating
      assets





We
      are
      currently exploring additional value creation opportunities.   In
      March 2008, we announced the engagement of Merriman Curhan Ford as an exclusive
      financial advisor to assist the Company with evaluating potential joint venture
      partnerships, strategic alliances, asset sales, or other strategic transactions
      that may serve to increase shareholder value beyond pursuing the above strategy
      independently.  In March 2008, we announced a $2.5 million share buy back
      program effective through September 30, 2008, due to our belief that our stock
      is currently undervalued. As of June 2008 we have successfully entered into
      agreements with GE Packaged Power, Inc to purchase three LM-6000 turbines for
      the Chula Vista and Escondido Upgrade projects. In addition we simultaneously
      secured a debt facility for $25.5 million with GE Energy Financial Services,
      Inc. specifically for the purchase of those turbines. In July, we secured the
      Authority to Construct permit for the Escondido project. This permit and the
      Conditional Use permit we secured in February 2008 for Escondido represent
      the
      successful completion of the permitting phase of the Escondido Upgrade
      Project.





On
      June
      6, 2008, the FERC issued an order rejecting our arguments that our facilities
      comply with the CAISO's tariff to provide spinning reserve services, and that
      we
      be allowed to resume bidding into this market. The FERC did, however, direct
      the
      CAISO to reimburse us for disputed charges related to spinning reserve revenues
      earned prior to and including September 18, 2006, and directed that a settlement
      judge be appointed to conduct settlement negotiations in an effort to resolve
      disputes as to any further reimbursements for contested charges subsequent
      to
      September 18, 2006. Although not discussed in the FERC's order, the CAISO has
      asserted that it is entitled to recover additional spinning reserve revenues
      paid to us since September 18, 2006; however, we dispute this position. On
      July
      7, 2008, we filed a request for rehearing of the FERC's ruling and we continue
      to evaluate other legal remedies. Also on July 7, the CAISO filed a request
      for
      rehearing with respect to the recovery of the pre-September 18, 2006 disputed
      charges awarded to us. The requests for rehearing remain pending before the
      FERC.


-
          17
          -





We
      are
      managed by a team of professionals with significant energy sector experience
      and
      knowledge. Our executive officers and Board of Directors have extensive
      experience with industry leaders in the energy and finance sectors, as well
      as
      private equity, structured finance and project finance transactional experience.
      We intend to leverage this extensive experience and our relationships within
      the
      energy and finance sectors to execute on our core strategy and build significant
      long-term value for our stockholders.





We
      launched our acquisition strategy in January 2006 with the acquisition of two
      44
      MW natural gas fired electricity generating facilities in San Diego County,
      one
      in Chula Vista and the other in Escondido, California. This acquisition provided
      us entry to the California wholesale electricity market. We fully
      re-commissioned the facilities and began earning revenues in June 2006. We
      acquired the formerly idle facilities for what we believe to be a discounted
      value to market, and believe the facilities appreciated substantially in value
      following their repair and re-commissioning. In November 2006, we acquired
      MMC
      Mid-Sun, a 22 MW facility near Bakersfield, California, which we also
      successfully re-commissioned and began operating in January 2007.





On
      July
      5, 2007, we listed our common stock on the Nasdaq Global Market in connection
      with the closing of a $50 million underwritten public offering of our common
      stock.





During
      the first half of 2008 we achieved significant progress with respect to our
      upgrade projects for Chula Vista and Escondido. During this period we entered
      into two agreements to purchase two and one LM-6000 turbine(s) from GE Packaged
      Power, Inc. for the Chula Vista and Escondido projects, respectively. The total
      value of these contracts is approximately $45.5 million.




On
      June
      30, 2008 our wholly owned subsidiaries, MMC Chula Vista II and MMC Escondido
      II,
      entered into a loan facility with GE Energy Financing Services, or GE Finance,
      in connection with our purchase of the three GE LM-6000 PC Sprint(r) natural
      gas-fired turbines from GE Energy, as described above.




The
      loan
      facility with GE Finance allows our subsidiaries to borrow the $25.5 million,
      provided that we first contribute equity capital to each subsidiary sufficient
      to cover the balance of the turbines' purchase price, among other customary
      conditions. Loans made under the facility bear interest at the prime rate plus
      2.75% and are fully guaranteed by the Company. GE Finance has obtained a right
      of first refusal to provide the full project debt financing to each of the
      projects upon receipt of final permitting. The loans are due in full 150 days
      after the final turbine is ready to ship, and carry prepayment penalties if
      prepaid in the first 12 months or in the event the projects proceed with debt
      other than from GE Finance. The loans also include an unused line fee of 0.5%
      on
      the difference between the outstanding loan balance and the total commitment
      of
      $25.5 million. The facility also places certain restrictions on our
      subsidiaries’ ability to make distributions to us and with respect to
      maintaining the turbines as collateral among other covenants typical of such
      equipment loans. The
      loans
      are collateralized by substantially all assets of the subsidiaries.





On
      July
      7, 2008 we announced that we have received an Authority to Construct permit
      from
      the San Diego Air Pollution Control District, the final regulatory approval
      required to commence its Escondido Energy Upgrade Project. In addition, we
      announced in February the receipt of a Conditional Use Permit from the City
      of
      Escondido, which was the other major permit required to commence the Upgrade
      Project. The Escondido Upgrade Project is now fully permitted.





We
      currently have seven full time employees. However, we contract for third party
      labor for on-site operations and maintenance of our existing facilities, as
      well
      as energy management and trading support. We expect to manage any future
      facilities acquired in a similar fashion.





**Critical
      Accounting Policies**





Our
      consolidated financial statements are prepared in accordance with accounting
      principles generally accepted in the United States. The preparation of our
      financial statements in conformity with accounting principles generally accepted
      in the United States requires us to make estimates and assumptions that affect
      the reported amounts of assets, liabilities, revenues, costs and expenses,
      and
      related disclosure. We base our estimates and assumptions on historical
      experience and on various other assumptions that we believe to be reasonable
      under the circumstances. Future events, however, may differ markedly from our
      current expectations and assumptions. While there are a number of significant
      accounting policies affecting our consolidated financial statements, we believe
      the following critical accounting policies involve the most complex, difficult
      and subjective estimates and judgments.


-
          18
          -





**Revenue
      Recognition**





We
      recognize revenue when all of the following circumstances are satisfied: (1)
      persuasive evidence of an arrangement exists, (2) price is fixed or
      determinable, (3) collectibility is reasonably assured, and (4) delivery has
      occurred. Revenues are recognized upon delivery of energy or services. The
      revenues we collect for ancillary services and energy delivery fluctuate based
      on market prices established by CAISO on a daily, hourly and real-time basis.





We
      recognize energy production revenue when energy has been substantially
      transmitted to the customer. We recognize revenue when electricity is delivered
      to a customer pursuant to contractual commitments that specify volume, price
      and
      delivery requirements. Some sales of energy are based on economic dispatch,
      or
      "as-ordered," by an independent system operator, or "ISO," based on member
      participation agreements, but without an underlying contractual commitment.
      Revenues for sales of energy based on ISO dispatches are recorded on the basis
      of MW-hours delivered, at the applicable wholesale market prices. In addition
      to
      bilateral contracts that we may enter into from time to time, we generally
      offer
      our energy to the ISO daily at our variable cost to produce plus a desired
      minimum profit margin. Our facilities can be dispatched only if the market
      clearing price exceeds our bid price. We may also receive "out of merit"
      dispatches in times when the market price is less than our bid price, but our
      electricity is needed locally due to local transmission constraints, in which
      case we will be paid our bid price for energy provided.





As
      described under "Results of Operations" below, we also recognize revenues from
      the provision of ancillary services and under capacity contracts. Although
      there
      are several types of ancillary services, to date we have primarily provided
      "spin" and "non spin" services, which call for the facilities to be delivering
      the awarded capacity within 10 minutes of dispatch whether already connected
      to
      the grid (spin) or not (non-spin). As noted in Note 10, we no longer provide
      spinning reserve revenues and will not going forward with the existing
      facilities. We recognize these revenues at the time of dispatch by the ISO.
      Capacity (resource adequacy) contract revenues are recognized based on the
      facility's capacity as certified by the California Public Utility Commission,
      or
      CPUC, and by CAISO.





**Results
      of Operations**





**Revenues**





Our
      electricity generating facilities are generally referred to as “peaker” plants
      which are used to balance unexpected short term surges in electricity demand,
      making them critical to the reliability, or “insurance,” of the transmission
      grids they serve. Our revenues to date have been earned by providing resource
      adequacy capacity, ancillary services and energy production.





·
            Resource
                Adequacy Capacity – Regulatory capacity payments for generators of
                any type are based strictly on total installed capacity measured
                in
                megawatts. In the California market where we currently operate
                exclusively, market-based capacity revenues are earned through resource
                adequacy contracts, whereby the counterparty can point to our facilities'
                installed capacity as a source to supply its peak demand plus a mandatory
                safety margin as dictated by the California Public Utilities Commission
                or
                CPUC The contract does not create an obligation to supply electricity
                to
                the counterparty, but does obligate us to bid the facilities’ energy into
                the CAISO markets on a daily basis such that our capacity is available
                to
                the CAISO, if needed, at our bid price. The resource adequacy capacity
                amount cannot exceed the qualified capacity amount for the resource.
                Qualified capacity is certified by CAISO. For 2007, the MMC Escondido
                and
                MMC Chula Vista facilities were certified by CAISO and the CPUC for
                35.5
                MW each, and MMC Mid-Sun for 22 MW, and for 2008, 35.5 MW each for
                the
                Escondido and Chula Vista facilities and MMC Mid-Sun for 21.8
                MW.





·
            Ancillary
                Services – Although there are several types of ancillary services, we
                primarily provide “spin” and “non-spin” services which call for the
                facilities to be delivering the awarded capacity within 10 minutes
                of
                dispatch whether already synchronized to the grid (spin) or not
                (non-spin). Spin services typically offer higher rates. As of October
                9,
                2007, Bear Energy L.P., our scheduling coordinator, advised us that
                it
                would no longer bid our facilities into the spin services market
                due to
                regulatory uncertainty concerning our spin qualification with CAISO.
                Furthermore, pricing for non-spin reserves has been negligible since
                October 2007. While we expect non-spin pricing to recover somewhat
                during
                the peak Summer period, our ancillary service revenues will likely
                not be
                as large a percentage of our total revenues as they have been
                historically.





·
            Energy
                Production – We provide electricity to the local power grid through day
                ahead and real time auctions managed by the CAISO, the “merchant market”
                or through financially settled bilateral agreements with a utility
                or
                other direct counterparty. As we have no outstanding electricity
                purchase
                agreements or other contracted energy production, all of our energy
                production revenues are earned in the daily merchant market.


-
          19
          -





Revenues
      for the three and six month periods ended June 30, 2008 and 2007 were
      distributed as follows:





**Three Months**
              **Ended June 30,**
            
            **Three Months**
              **Ended June 30,**
            
            **Six Months**
              **Ended June 30,**
            
            **Six Months**
              **Ended June 30,****Periods ended June 30,**
            
            
            **2008**
            
            
            **2007**
            
            
            **2008**
            
            
            **2007****Operating
                revenues:**Resource
                adequacy capacity
            
            $
            627,900
            
            $
            791,250
            
            $
            1,209,650
            
            $
            1,483,500Ancillary
                services
            
            
            327,481
            
            
            612,846
            
            
            332,619
            
            
            1,004,387Energy
                production
            
            
            52,462
            
            
            100,867
            
            
            195,959
            
            
            118,193**Total
                operating revenues**
            
            $
            1,007,843
            
            $
            1,504,963
            
            $
            1,738,228
            
            $
            2,606,081





Revenues
      for the three month period ended June 30, 2008 decreased 33% to $1,007,843
      from
      the same period in 2007 driven primarily by the drop in ancillary services
      revenues due to the suspension of our spinning reserve services qualification
      by
      the CAISO. Non-spinning
      reserve service has historically priced lower than spinning reserve service
      and
      this trend has been accentuated during the last three quarters, and can be
      expected to continue during off peak periods. Historically, non-spinning reserve
      pricing has spiked in the summer months consistent with spinning reserves,
      however, there can be no assurances that trend will continue this summer. In
      June 2008, the FERC upheld the CAISO’s position that MMC was not qualified to
      provide spinning reserve services. See Note 10 of our Condensed Consolidated
      Financial Statements included in this report for more detail.





Revenues
      for the six month period ended June 30, 2008 decreased 33% to $1,738,228 from
      the same period in 2007 driven primarily by the drop in ancillary services
      due
      to the suspension of our spinning reserve services qualification by the CAISO.
      Accordingly, we expect that continued suspension of bidding will have a material
      adverse effect on our results from operations. In June 2008, the FERC upheld
      CAISO’s position that we are not qualified for spinning reserve services. We
      continue to dispute FERC’s ruling on our spinning qualification and on July 7,
      2008 filed a request for re-hearing. These proceedings are currently in process.
      The decrease in ancillary services was partially offset by higher energy
      revenues due to more frequent dispatches.





Capacity
      revenues decreased due to our Escondido facility being paid in a shaped contract
      which reflects the seasonal demand for energy such that the vast majority of
      Escondido’s capacity revenues are earned during the summer.





**Cost
      of Sales**





Cost
      of
      sales for the three months ended June 30, 2008 and 2007 were $132,338 and
      $237,297 respectively, yielding gross profits of $875,505 and $1,267,666 and
      gross margin of 87% and 84%, respectively.





Costs
      of
      sales for the six months ended June 30, 2008 and 2007 were $253,876 and $400,867
      respectively yielding gross profits of $1,484,352 and $2,205,213, respectively
      and gross margins of 85% for both periods.





Our
      gross
      margin has been relatively high due to high margin resource adequacy capacity
      constituting the largest portion of our revenues. In addition, gross margins
      for
      energy production revenue remain high as we generally produce energy only during
      peak demand times which result in the highest prices for energy. We expect
      our
      gross margin to decrease significantly as a percentage of our revenues as we
      upgrade existing facilities and acquire additional facilities, which are
      expected to increase our gross energy production.


-
          20
          -





Costs
      of
      sales and gross margins were distributed as follows:





**Three Months**
              **Ended June 30,**
            
            **Three Months**
              **Ended June 30,**
            
            **Six Months**
              **Ended June 30,**
            
            **Six Months**
              **Ended June 30,****Periods ended June 30,**
            
            **2008**
            
            **2007**
            
            **2008**
            
            **2007****Costs
                of sales:**Costs
                of resource adequacy capacity
            
            
            45,523
            
            
            63,300
            
            
            87,700
            
            
            118,680Costs
                of ancillary services
            
            
            43,924
            
            
            92,813
            
            
            48,240
            
            
            180,091Costs
                of energy production
            
            
            42,891
            
            
            81,184
            
            
            117,936
            
            
            102,097**Total
                costs of sales**
            
            $
            132,338
            
            $
            237,297
            
            $
            253,876
            
            $
            400,867





**Three Months**
              **Ended June 30,**
            
            **Three Months**
              **Ended June 30,**
            
            **Six Months**
              **Ended June 30,**
            
            **Six Months**
              **Ended June 30,****Periods ended June 30,**
            
            **2008**
            
            **2007**
            
            **2008**
            
            **2007****Gross margin:**Gross
                margin of resource adequacy capacity
            
            
            92.7
            %
            
            92.0
            %
            
            92.7
            %
            
            92.0
            %Gross
                margin of ancillary services
            
            
            86.6
            %
            
            84.9
            %
            
            85.5
            %
            
            82.1
            %Gross
                margin of energy production
            
            
            18.2
            %
            
            19.5
            %
            
            39.8
            %
            
            13.6
            %**Total
                costs of sales**
            
            
            86.9
            %
            
            84.2
            %
            
            85.4
            %
            
            84.6
            %




Costs
      of
      sales include these major expenses:





·
            Resource
                Adequacy Capacity – Includes primarily commissions paid to
                electricity marketers. We expect this revenue stream to remain at
                a very
                high margin.





·
            Ancillary
                Services — Includes primarily grid management charges, or costs incurred
                by the ISO directly related to the installation and maintenance of
                the
                electrical power grid necessary to permit the provision of energy
                and
                ancillary services. These costs are passed through to generators
                as
                mandated by regulatory and governing bodies. Costs also include variable
                incentive fees paid to our energy manager for exceeding revenue targets.
                This is typically a high margin
                service.





·
            Energy
                Production – Includes variable costs for fuel, primarily natural gas,
                used in the production of energy as well as pipeline fees for fuel
                transportation, grid management charges, variable incentive fees,
                and
                other direct charges associated with the provision of energy
                production..
                We expect our gross margin to decrease significantly as a percentage
                of
                our revenues as we upgrade existing facilities and acquire additional
                facilities, which are expected to increase our gross energy
                production.





**Operations
      and Maintenance**





Operations
      and maintenance expenses consist of the direct overhead expenses for operating
      and maintaining our electricity generating facilities. For the three months
      ended June 30, 2008 and 2007, operations and maintenance expenses were $683,210
      and $797,467 respectively. These expenses consisted primarily of contracted
      labor, interconnection costs, repairs and maintenance, environmental consulting,
      environmental compliance and other semi-variable costs. The decrease in expenses
      was driven primarily by the timing of scheduled annual maintenance, occurring
      in
      part during the first quarter of 2008, but executed primarily in the second
      quarter of 2007.




For
      the
      six months ended June 30, 2008 and 2007, operations and maintenance expenses
      were $1,413,333 and $1,211,625 respectively. The increase in expenses was
      primarily because the first half of 2007 did not reflect a full six months
      of
      operations for Mid-Sun, which was re-commissioned during the first quarter
      of
      2007.





**Re-commissioning
      Expenses**





Re-commissioning
      expenses consist of the non-recurring initial planned repairs and
      re-commissioning costs required to restore electricity generating facilities
      and
      all related equipment to operating condition, including fuel and other costs
      relating to initial test runs of the facilities. Such expenditures are expensed
      for financial accounting purposes as they represent basic repairs and
      maintenance and do not otherwise extend the life of the assets. However, as
      such
      expenses are non-recurring on an asset by asset basis and pre-funded with the
      acquisition of the asset, management considers them part of its investment
      cost
      for evaluating returns on individual assets. We have completed the
      re-commissioning for our current assets, but expect to incur such costs with
      respect to future acquisitions, as they may be in mothball status and may have
      received little or no maintenance for significant periods of time.





For
      the
      three months ended June 30, 2008 and 2007, re-commissioning costs were $0 and
      $39,517, respectively, and for the six months ended June 30, 2008 and 2007,
      re-commissioning costs were $0 and $419,135 respectively. In 2008, the company
      had no re-commissioning projects in process.


-
          21
          -





**General
      and Administrative Expenses**





For
      the
      three months ended June 30, 2008 and 2007, general and administrative expenses
      were $1,760,101 and $1,073,000, respectively. General and administrative
      expenses for the three months ended June 30, 2008 and 2007 were primarily driven
      by compensation, professional fees and investor relations expenses, most of
      which were incurred in connection with our annual meeting of stockholders held
      May 28, 2008 and the related proxy fight.





For
      the
      six months ended June 30, 2008 and 2007, general and administrative expenses
      were $3,277,688 and $2,522,049, respectively. General and administrative
      expenses for the six months ended June 30, 2008 and 2007 were primarily driven
      by compensation, professional fees and investor relations expenses, most of
      which were incurred in connection with our annual meeting of stockholders held
      May 28, 2008 and the related proxy fight.





While
      our
      recurring general and administrative expenses may increase on an absolute basis,
      we expect they will decrease as a percentage of total revenue as we continue
      to
      implement our growth strategy.





**Interest
      and Other Expenses**





Interest
      income for the three months ended June 30, 2008 reflects investment of our
      July
      2007 public offering proceeds in high-yield investment grade money market funds
      and debt securities, partially offset by senior debt interest expense on our
      credit facility. We expect to continue to earn net interest income until the
      proceeds from the offering are utilized to acquire additional assets. We also
      expect this interest income to be more than offset in future periods by interest
      expense generated from our recently consummated loan agreement with GE Finance
      as we begin to draw down on that facility.





Other
      income of $296,117 for the three months ended June 30, 2007 reflects the
      successful recovery of substantially all legal and professional fees primarily
      related to unsuccessful financing activities prior to the July 2007 public
      offering.





**Liquidity
      and Capital Resources**





On
      July
      5, 2007, we consummated a registered public offering of 9,090,910 shares of
      our
      common stock at $5.50 per share. This transaction resulted in net proceeds
      to us
      of approximately $46.1 million. As of June 30, 2008, we had $20.9 million in
      cash and equivalents. The majority of cash we used during the first half of
      2007
      was attributable to approximately $19.3 million of deposits on turbines for
      our
      planned Chula Vista and Escondido upgrade projects and approximately $1.2
      million in payments for severance and related costs in connection with the
      departure of our former chief executive officer.





We
      believe that our existing cash resources will be sufficient to satisfy our
      cash
      requirements for at least the next twelve months. However, our existing cash
      resources may not be sufficient to fully fund our acquisition growth strategy.
      Such acquisitions may require us to obtain additional debt financing or other
      funding in a short period of time. The extent and timing of the capital
      requirements will be contingent on the specific acquisition targets we are
      able
      to source. If we fail
      to
      obtain sufficient capital resources on terms acceptable to us, it would have
      a
      material adverse effect on our plans to make additional acquisitions, cover
      unplanned repairs, required capital expenditures and/or our current business,
      results of operations, liquidity and financial condition. If we issue additional
      equity and/or debt securities to meet our future capital requirements, the
      terms
      of any future equity financings may be dilutive to our stockholders and the
      terms of any debt financings may contain restrictive covenants that may also
      negatively affect our stockholders. Our ability to effect future financings
      will
      depend on the status of our business prospects as well as conditions then
      prevailing in the capital markets.





On
      January 31, 2006, MMC North America, one of our wholly owned subsidiaries
      entered into a Loan and Security Agreement with TD Banknorth providing for
      a
      $3.5 million senior debt facility including a $3.0 million term loan and a
      $500,000 revolving loan. The term loan provides for interest-only payments
      during the first eight months, and 81 equal monthly principal payments in the
      amount of $37,038 thereafter, with a final maturity date of May 3, 2013. The
      term loan bears interest at a fixed rate equal to 7.58%.





Advances
      against the revolver are payable on demand and bear interest at the prime rate
      plus 1.00%. Beginning in 2006, amounts outstanding under the revolver must
      be
      repaid in full and a zero balance maintained for at least 30 consecutive days
      at
      any time during the year. We have not borrowed under the revolver.


-
          22
          -





MMC
      North
      America has arranged for the continuation of an irrevocable letter of credit
      in
      the amount of $100,000 (the “Letter of Credit”) to a counterparty with whom we
      originally entered into an energy services agreement in November 2006 (the
      “ESA”). The counterparty may draw upon the Letter of Credit to recover
      liquidated damages suffered by the counterparty in connection with any energy
      sales it may make on behalf of MMC North America and MMC Mid-Sun in the event
      MMC North America or MMC Mid-Sun fails to meet its obligations, or for any
      other
      unsatisfied obligations under the ESA. The Letter of Credit expires on February
      28, 2009. Availability under the Revolver is reduced from $500,000 to $400,000
      while the Letter of Credit remains outstanding.





The
      Loan
      Agreement places certain restrictions on MMC North America’s ability to make
      distributions to us and on transactions with affiliates. The Loan Agreement
      further subjects MMC North America to certain financial and other covenants,
      including maintaining a minimum Net Worth and minimum Debt Service Coverage
      ratio. These financial covenants are measured annually. During the last
      measurement of these covenants, for the twelve months ended December 31, 2007,
      we were in compliance with all covenants .
      The
      loans are collateralized by substantially all assets of MMC North
      America.





On
      January 29, 2008 we entered into an agreement with GE Packaged Power, Inc.
      (“GE
      Power”) for the purchase of two LM-6000 turbines to be used in the Chula Vista
      Upgrade Project for approximately $31 million. Through the date of this report
      the Company has made payments of approximately $16.2 million. These payments
      are
      classified as long-term deposits on our condensed consolidated balance sheet.





On
      May
      15, 2008 the Company entered into an agreement with GE Power for the purchase
      of
      one LM-6000 turbine to be used in the Escondido Upgrade Project for
      approximately $15 million. Through the date of this report, we have made
      payments of approximately $6.6 million. These payments are classified as
      long-term deposits on our condensed consolidated balance sheet.




On
      June
      30, 2008 our wholly owned subsidiaries, MMC Chula Vista II, LLC and MMC
      Escondido II, LLC, agreed to a $25.5 million loan facility with GE Energy
      Financial Services (“GE Finance”) in connection with the purchase of three GE
      LM-6000 PC Sprint(r) natural gas-fired turbines from GE Energy.




The
      loan
      agreement allows our subsidiaries to borrow the $25.5 million, provided that
      we
      first contribute equity capital to each subsidiary sufficient to cover the
      balance of the turbines' purchase price, among other customary conditions.
      The
      loans bear interest at the prime rate plus 275 basis points and are fully
      guaranteed by us. GE Finance has obtained the right of first refusal to provide
      the full project debt financing to each of the projects upon receipt of final
      permitting. The loans are due in full 150 days after the final turbine is ready
      to ship, and carry prepayment penalties if prepaid in the first 12 months or
      in
      the event the projects proceed with debt other than from GE Finance.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements that are reasonably likely to have
      a
      current or future effect on our financial condition, revenues, results of
      operations, liquidity or capital expenditures, nor do we participate in
      non-exchange traded contracts requiring fair value accounting treatment.





In
      connection with the planned Chula Vista and Escondido upgrades and possible
      future acquisition of "mid-merit" electricity generation facilities, which
      are
      neither true baseload nor true peaking facilities, but somewhere in between,
      we
      may engage in certain hedging transactions. Such facilities would be more
      expensive to purchase but would be expected to generate substantially more
      energy production revenues. For such assets, hedging the commodity price risk
      becomes more critical and we would expect to enter into intermediate term
      financially settled hedge contracts that would serve the purpose of shifting
      the
      price risk of fuel cost and electricity pricing onto the counterparty, in effect
      swapping commodity price risk for credit risk. Management's experience in this
      area will become more critical with the purchase of such assets.





**Seasonality
      and Inflation**





Our
      business is seasonal, with a relatively high proportion of revenues and
      operating cash flows generated during the third quarter of the fiscal year,
      which includes the peak summer months for energy demand. As we derive most
      of
      our revenues from selling energy and ancillary services at then-current spot
      market prices, as opposed to under longer term fixed-price contracts, our
      revenues and operating income are highly exposed to the seasonal fluctuations
      in
      natural gas and electricity, which corresponds to peak summer demand. The effect
      of inflation on our revenue and operating results was not
      significant.


-
          23
          -





**Recent
      Accounting Pronouncements**





See
      Note
      2 of the Notes to Condensed Consolidated Financial Statements for recent
      accounting pronouncements.





**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





Not
      Applicable





**ITEM
      4T. CONTROLS AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures**




We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our reports filed or submitted pursuant
      to the Securities Exchange Act of 1934 is recorded, processed, summarized and
      reported within the time periods specified in the SEC’s rules and forms, and
      that information required to be disclosed in our Exchange Act reports is
      accumulated and communicated to our Chief Executive Officer and Chief Financial
      Officer, to allow timely decisions regarding required disclosure.





Under
      the
      supervision and with the participation of our Chief Executive Officer and Chief
      Financial Officer as of June 30, 2008, we conducted an evaluation of
      effectiveness of the design and operation of our disclosure controls and
      procedures, (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange
      Act). Based upon that evaluation, our Chief Executive Officer and Chief
      Financial Officer concluded that our disclosure controls and procedures are
      effective as of such date to ensure that information required to be disclosed
      by
      us in the reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported, within the time periods specified in the
      SEC’s rules and forms. Disclosure controls and procedures include, without
      limitation, controls and procedures designed to ensure that information required
      to be disclosed in our reports filed or submitted under the Exchange Act is
      accumulated and communicated to management, including our chief executive
      officer and chief financial officer, as appropriate to allow timely decisions
      regarding disclosure.




**Changes
      in Internal Control Over Financial Reporting**





There
      were no changes in our internal controls over financial reporting identified
      in
      connection with the evaluation required by paragraph (d) of Exchange Act Rules
      13a-15 or 15d-15 that occurred during our last fiscal quarter that have
      materially affected, or are reasonably likely to materially affect, our internal
      controls over financial reporting.





**PART
      II**


**OTHER
      INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





On
      March
      13, 2008, we filed a complaint with the Federal Energy Regulatory Commission
      (''FERC'') seeking an order directing the California Independent System Operator
      Corporation ("CAISO") to allow us to participate in the spinning reserve market.
      The CAISO filed an answer on April 14, 2008 disputing our position. On April
      29,
      2008 we reiterated our position in a response to the answer filed by CAISO.
      On
      June 6, 2008, the FERC issued an order rejecting our arguments that our
      facilities comply with the CAISO's tariff to provide spinning reserve services,
      and that we be allowed to resume bidding into this market. The FERC did,
      however, direct the CAISO to reimburse us for disputed charges related to
      spinning reserve revenues earned prior to and including September 18, 2006,
      and
      directed that a settlement judge be appointed to conduct settlement negotiations
      in an effort to resolve disputes as to any further reimbursements for contested
      charges subsequent to September 18, 2006. Although not discussed in the FERC's
      order, the CAISO has asserted that it is entitled to recover additional spinning
      reserve revenues paid to us since September 18, 2006; however, we dispute this
      position. On July 7, 2008, we filed a request for rehearing of the FERC's ruling
      and we continue to evaluate other legal remedies. Also on July 7, the CAISO
      filed a request for rehearing with respect to the recovery of the pre-September
      18, 2006 disputed charges awarded to us. The requests for rehearing remain
      pending before the FERC.


-
          24
          -





On
      April 21, 2008 we filed an arbitration claim against Karl W. Miller,
      our former CEO, with the American Arbitration Association in the Borough of
      Manhattan, New York, New York, alleging, among other things, that he
      fraudulently induced us to enter into a Separation Agreement in connection
      with
      his removal as CEO, that Mr. Miller breached his obligations under the
      Separation Agreement and that he has tortiously interfered with our business
      relations. In December 2007, our Board of Directors removed Mr. Miller as CEO
      and in February 2008 paid him in excess of $1.1 million as severance and entered
      into a Separation Agreement with Mr. Miller. Under the Separation Agreement,
      Mr.
      Miller agreed, among other things, not to interfere with our business operations
      or disparage us, our Board of Directors or our management, and to abide by
      the
      non-competition and non-solicitation provisions of his Employment Agreement.
      As
      alleged in the Statement of Claim, less than one month after accepting the
      severance payment, Mr. Miller began issuing and/or causing to be issued a series
      of disparaging press releases and announced his intention to launch a proxy
      contest. On April 16, 2008, Mr. Miller filed a preliminary proxy statement
      with
      the Securities and Exchange Commission which, as alleged in the Statement of
      Claim, is replete with disparaging statements concerning us and confirms that
      Mr. Miller is openly competing with us. In the arbitration, we sought, among
      other things, an award requiring Mr. Miller to return the $1.1 million severance
      payment, and punitive damages in an amount to be determined at the hearing
      and
      reasonable costs and attorney’s fees.





On
      May 6,
      2008, Mr. Miller filed with the Supreme Court of the State of New York a
      petition to stay the arbitration on the grounds that at least some of the claims
      asserted in the arbitration were not subject to arbitration under the
      arbitration clause of Mr. Miller’s Employment Agreement. 
Although we disagreed with the merits of Mr. Miller's application to
      stay the arbitration, we nevertheless elected to withdraw the claims
      from the arbitration that Mr. Miller asserted were non-arbitrable and
      file such claims in court. Accordingly, on May 8, 2008, we commenced a
      lawsuit against Mr. Miller in the United States District Court for the Southern
      District of New York asserting the causes of action for fraud, breach of
      contract and tortious interference with advantageous business relations. On
      May
      16, 2008, we filed an amended arbitration claim against Mr. Miller to
      withdraw the claims that are now included as part of the Southern District
      of
      New York complaint. Thus, the sole claim to be arbitrated is for
      breach of contract in connection with Mr. Miller's violation of the
      non-competition and confidentiality provisions of his Employment
      Agreement.





On
      July
      3, 2008, we filed a motion for a default judgment against Mr. Miller
      with respect to our claims in the Southern District of New York
      due to Mr. Miller’s failure to answer the Southern District of New York
      complaint in a timely manner. Mr. Miller filed a response on July 18, 2008
      and
      the Court has yet to rule on the default motion. In addition, on July
      23, 2008, Mr. Miller filed a motion to dismiss the action pending in the
      Southern District of New York. On August 6, 2008 we filed our opposition to
      the motion to dismiss.





From
      time
      to time we may become a party to routine litigation or other legal proceedings
      that are incidental and part of the ordinary course of our
      business.. Management and legal counsel periodically review the probable outcome of such
      proceedings, the costs and expenses reasonably expected to be incurred, the
      availability and extent of insurance coverage, and established
      reserves.





We
      are
      unable to gauge the extent of its ultimate relief or any liability with respect
      to these and any and all future regulatory matters. The costs and other effects
      of any future litigation, regulatory proceedings, legal and administrative
      cases, settlements, judgments, claims and changes in these matters will not
      have
      a material adverse effect on our financial condition and liquidity but may
      have
      a material impact on future operating results





**ITEM
      1A. RISK FACTORS**





Not
      Applicable




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





None.





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





None.


-
          25
          -





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





The
      following matters were submitted to security holders at our annual meeting
      of
      stockholders held on May 28, 2008:





**MMC Proposals on MMC Proxy**
            
            **Candidate**
            
            **For**
            
            **Against**
            
            **Withheld**
            
            **Broker-Non Votes**
            
            **Abstentions**To elect the following
            
            
            Michael Hamilton
            
            
            10,604,894
            
            
            -
            
            
            60,057
            
            
            -
            
            
            -nominees
                as Directors
            
            
            Denis
                G. Gagnon
            
            
            10,604,894
            
            
            -
            
            
            60,057
            
            
            -
            
            
            -Sen.
                Richard Bryan
            
            
            10,604,894
            
            
            -
            
            
            60,057
            
            
            -
            
            
            -Frederick
                W. Buckman
            
            
            10,604,894
            
            
            -
            
            
            60,057
            
            
            -
            
            
            -Phillip G. Harris
            
            
            10,604,894
            
            
            -
            
            
            60,057
            
            
            -
            
            
            -Dr. Peter Likins
            
            
            10,604,894
            
            
            -
            
            
            60,057
            
            
            -
            
            
            -George Rountree, II
            
            
            10,184,716
            
            
            -
            
            
            480,235
            
            
            -
            
            
            -Ratification
                of RBSM LLP as auditor
            
            
            
            
            
            10,638,403
            
            
            6,968
            
            
            -
            
            
            -
            
            
            1,272,408**Shareholder
                Proposals on MMC Proxy**-
            
            
            -Mandatory
                Retirement Age for Independent Directors
            
            
            
            
            
            938,022
            
            
            10,841,228
            
            
            -
            
            
            -
            
            
            21,072-
            
            
            -Engage
                business broker to market & sell MMC
            
            
            
            
            
            1,286,390
            
            
            9,191,033
            
            
            -
            
            
            -
            
            
            1,322,899-
            
            
            -Proposal
                to repurchase common stock
            
            
            
            
            
            1,508,556
            
            
            10,224,148
            
            
            -
            
            
            -
            
            
            69,618





**EHL Proposals (Dissident Proxy)**
            
            **Candidate**
            
            **For**
            
            **Against**
            
            **Withheld**
            
            **Broker-Non Votes**
            
            **Abstentions**To elect the following
            
            
            Kevin McConville
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -nominees
                as Directors
            
            
            Ketheesch
                Aran
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -Tony
                Valentine
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -Karl
                W. Miller
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -G.
                William Eason
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -Joseph
                Hearne
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -Raiford
                Trask
            
            
            1,250,845
            
            
            -
            
            
            1,983
            
            
            -
            
            
            -Proposal
                to amend MMC Bylaws to establish an age limitation for Directors
            
            
            
            
            
            1,224,740
            
            
            5,100
            
            
            -
            
            
            -
            
            
            22,988Proposal
                to repeal any provisions or amendements of the Bylaws adopted since
                March
                7, 2008 until the conclusion of the Annual Meeting
            
            
            
            
            
            1,224,080
            
            
            5,940
            
            
            -
            
            
            -
            
            
            22,808





(1)
            These
                proposals are described in detail in the definitive proxy statements
                filed
                by the Company dated April 11, 2008 and May 9, 2008 for the annual
                meeting
                of stockholders held on May 28, 2008 except as noted below.


(2)
            On
                May 8, 2008 EHL Holdings Limited, LLC (“EHL”) submitted a definitive
                dissident proxy for the annual meeting of the stockholders held on
                May 28,
                2008. EHL’s proposals were not on MMC’s ballot and therefore stockholders
                voting the Compamy’s card did nto vote on EHL’s proposals. All of EHL’s
                proposals failed to pass.





**ITEM
      5. OTHER INFORMATION**





None


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          -





**ITEM
      6. EXHIBITS**





(a)
      Exhibits.


10.24
            
            Equipment
                and Services Agreement, dated May 19, 2008, by and between MMC Energy,
                Inc. and GE Packaged Power, Inc.10.25
            
            Loan
                Agreement, dated June 30, 2008 between MMC Energy, Inc. and GE Financial
                Services, Inc.31.1
            
            Certification
                pursuant to Rules 13a – 14(a) and 15d – 14(a) under the Securities
                Exchange Act of 1934, as amended31.2
            
            Certification
                pursuant Rules 13a – 14(a) and 15d – 14(a) under the Securities Exchange
                Act of 1934, as amended32.1
            
            Certification
                pursuant to 18 U.S. C.Section
                135032.2
            
            Certification
                pursuant to 18 U.S. C.Section
                1350




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          27
          -


**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.





**MMC
                ENERGY, INC.**By:
            /s/
                Michael J. HamiltonMichael
                J. HamiltonChief
                Executive Officer


By:
            /s/
                Denis GagnonDenis
                GagnonChief
                Financial Officer and Principal Accounting OfficerDATE:August
                11, 2008




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