**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-QSB**





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


**SECURITIES
      EXCHANGE ACT OF 1934**





For
      the
      quarterly period ended September 30, 2006





** ̈** **TRANSITION REPORT UNDER SECTION 13 OR SECTION 15(d) OF THE EXCHANGE
      ACT**








*Commission
      file number 000-51968*




**MMC
        ENERGY, INC.**
 (Exact
        Name of Small Business Issuer in Its Charter)


Delaware
            26
                Broadway New York NY 10004
            98-0493819(State
                or other jurisdiction ofincorporation or organization)
            (Address
                of principal executive offices)(zip code)
            (IRS
                EmployerIdentification No.)








Issuer's
      telephone number: (212) 977-0900





________________________________


(Former
      Name, Former Address and Former Fiscal Year,


if
      Changed Since Last Report)





Check
      whether the issuer (1) filed all reports to be filed by Section 13 or 15(d)
      of
      the Exchange Act during the past 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 shell company (as defined in Rule
      12b-2 of the Exchange Act) Yes o No x





**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





As
      of
      November 8, 2006 the registrant had 47,688,756 shares of Common Stock
      outstanding.





Transitional
      Small Business Disclosure Format (Check one): Yes࿠ No࿠








TABLE
        OF
        CONTENTS


PART
                I
            FINANCIAL
                INFORMATIONITEM
                1
            Financial
                StatementsCondensed
                Consolidated Balance Sheets as of September 30, 2006 (unaudited)
                and
                December 31, 2005
            4Condensed
                Consolidated Statements of Operations (unaudited) for the three and
                nine
                month periods ended September 30, 2006 and 2005
            5Condensed
                Consolidated Statement of Stockholders' Equity (unaudited) for the
                nine months ended September 30, 2006
            6Condensed
                Consolidated Statements of Cash Flows (unaudited) for the nine months
                ended September 30, 2006 and 2005
            7Notes
                to Condensed Consolidated Financial Statements (unaudited)
            8ITEM
                2
            Management's
                Discussion and Analysis or Plan of Operation
            17ITEM
                3
            Controls
                and Procedures
            24PART
                II
            OTHER
                INFORMATIONITEM
                1
            Legal
                Proceedings
            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
            25ITEM
                5
            Other
                Information
            25ITEM
                6
            Exhibits
            26SIGNATURES
            27





-2-




**FORWARD-LOOKING
      STATEMENTS**





This
      Quarterly Report on Form 10-QSB contains forward-looking statements regarding
      our Company and our plans, goals, strategies, intent, beliefs or current
      expectations. These statements are expressed in good faith and based upon a
      reasonable basis when made, but there can be no assurance that these
      expectations will be achieved or accomplished. These forward-looking statements
      can be identified by the use of terms and phrases such as “believe,” “plan,”
“intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or
      future-tense or conditional constructions (“will,” “may,” “could,” “should,”
etc.). Items contemplating or making assumptions about, actual or potential
      future sales, market size, collaborations, and trends or operating results
      also
      constitute such forward-looking statements.





Although
      forward-looking statements in this report reflect the
      good
      faith judgment of management, forward-looking statements are inherently subject
      to known and unknown risks, business, economic and other risks and uncertainties
      that may cause actual results to be materially different from those discussed
      in
      these forward-looking statements. Readers are urged not to place undue reliance
      on these forward-looking statements, which speak only as of the date of this
      report. We assume no obligation to update any forward-looking statements in
      order to reflect any event or circumstance that may arise after the date of
      this
      report, other than as may be required by applicable law or regulation. Readers
      are urged to carefully review and consider the various disclosures made by
      us in
      our reports filed with the Securities and Exchange Commission (the “SEC”) which
      attempt to advise interested parties of the risks and factors that may affect
      our business, financial condition, results of operation and cash flows. If
      one
      or more of these risks or uncertainties materialize, or if the underlying
      assumptions prove incorrect, our actual results may vary materially from those
      expected or projected.








**EXPLANATORY
      NOTE**





Unless
      otherwise indicated, the term the “Company” refers to MMC Energy, Inc. after
      giving effect to the merger described in Note 1 to the financial statements
      below unless the context clearly indicates otherwise. The term “Pubco” refers to
      MMC Energy, Inc. before giving effect to such merger, and the term “MMC North
      America” refers to MMC Energy North America, LLC, before giving effect to such
      merger.




-3-





**PART
      I. FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**




MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED BALANCE SHEETS


**September
                  30,**2006****
              
              **December
                  31,**2005****(unaudited)**Assets**Current
                assets:Cash
                  and equivalents
              
              $
              10,309,684
              
              $
              3,009,010Accounts
                  receivable, net
              
              
              10,613
              
              
              -Unbilled
                  receivables
              
              
              100,294
              
              
              -Prepaids
              
              
              644,273
              
              
              200,000Total
                  current assets
              
              
              11,064,864
              
              
              3,209,010Property,
                  plant and equipment, net
              
              
              3,073,345
              
              
              -Deferred
                  acquisition costs
              
              
              227,208
              
              
              379,624Long-term
                  deposits
              
              
              75,000
              
              
              -Total
                  Assets
              
              $
              14,440,417
              
              $
              3,588,634**Liabilities
                  & Stockholders' equity**Current
                  Liabilities:Current
                  maturities of long-term debt
              
              $
              444,456
              
              $
              -Accounts
                  payable
              
              
              538,151
              
              
              381,554Deferred
                  revenue
              
              
              140,600
              
              
              -Other
                  accrued expenses
              
              
              513,212
              
              
              12,000Deposits
                  for subscribed membership interests
              
              
              -
              
              
              3,008,333Total
                  current liabilities
              
              
              1,636,419
              
              
              3,401,887Long-term
                  debt
              
              
              2,481,468
              
              
              -Commitments
                  & contingenciesStockholders'
                  EquityCommon
                  stock; 300,000,000 shares authorized with 47,688,756issued and
                  outstanding as of September 30, 2006 and1,411,013 shares issued and
                  outstanding as ofDecember 31, 2005, $.001 par value
              
              
              47,689
              
              
              1,411Additional
                  paid-in capital
              
              
              15,074,917
              
              
              208,561Accumulated
                  deficit
              
              
              (4,800,076
              )
              
              (23,225
              )Total
                  stockholders' equity
              
              
              10,322,530
              
              
              186,747Total
                  liabilities and stockholders' equity
              
              $
              14,440,417
              
              $
              3,588,634




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


-4-




MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


**Three
                  Months Ended September 30,**
              
              **Nine
                  Months Ended September 30,**
              
              **February
                  7, 2005(date of inception) toSeptember
                  30,****2006**
              
              **2005**
              
              **2006**
              
              **2005****Operating
                  revenues:**Energy
                  production
              
              $
              693,645
              
              $
              -
              
              $
              712,320
              
              $
              -Ancillary
                  services
              
              
              1,441,581
              
              
              -
              
              
              1,693,853
              
              
              -Resource
                  adequacy capacity
              
              
              380,000
              
              
              
              
              
              380,000Total
                  operating revenues
              
              
              2,515,226
              
              
              -
              
              
              2,786,173
              
              
              -**Costs
                  of sales:**Costs
                  of energy production
              
              
              330,789
              
              
              -
              
              
              345,266
              
              
              -Costs
                  of ancillary services
              
              
              316,720
              
              
              -
              
              
              353,051
              
              
              -Costs
                  of resource adequacy capacity
              
              
              25,000
              
              
              -
              
              
              25,000
              
              
              -Total
                  costs of sales
              
              
              672,509
              
              
              -
              
              
              723,317
              
              
              -**Gross
                  Profit**
              
              
              1,842,717
              
              
              -
              
              
              2,062,856
              
              
              -**Operating
                  expenses:**Operations
                  and maintenance
              
              
              709,829
              
              
              -
              
              
              1,442,501
              
              
              -Re-commissioning
                  expenses
              
              
              12,632
              
              
              -
              
              
              2,155,796
              
              
              -General
                  and administrative expenses
              
              
              888,708
              
              
              -
              
              
              3,109,987
              
              
              -Total
                  operating expenses
              
              
              1,611,169
              
              
              -
              
              
              6,708,284
              
              
              -**Income
                  (Loss) from operations**
              
              
              231,548
              
              
              -
              
              
              (4,645,428
              )
              
              -**Other
                  expenses (income)**Other
                  expenses, net
              
              
              68,850
              
              
              -
              
              
              131,423
              
              
              -Total
                  other expense
              
              
              68,850
              
              
              -
              
              
              131,423
              
              
              -**Net
                  income (loss) before provision for income taxes**
              
              
              162,698
              
              
              -
              
              
              (4,776,851
              )
              
              -Provision
                  for income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Net
                  income (loss)**
              
              $
              162,698
              
              $
              -
              
              $
              (4,776,851
              )
              $
              -**Basic
                  income (loss) per common share**Net
                  income (loss) per share
              
              $
              -
              
              $
              -
              
              $
              (0.13
              )
              $
              -Weighted
                  average shares outstanding
              
              
              47,625,968
              
              
              -
              
              
              35,712,498
              
              
              -**Diluted
                  income (loss) per common share**Net
                  income (loss) per share
              
              $
              -
              
              $
              -
              
              $
              (0.13
              )
              $
              -Weighted
                  average shares outstanding
              
              
              48,464,595
              
              
              -
              
              
              35,712,498
              
              
              -




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




-5-




MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


FOR
      THE
      NINE MONTHS ENDED SEPTEMBER 30, 2006


(Unaudited)




**MMC**
              
              **Common**
              
              **Common**
              
              **Additional**
              
              
              
              **Total****North
                  America**
              
              **Shares**
              
              **Stock**
              
              **Paid-in**
              
              **Accumulated**
              
              **Stockholders'****Member
                  Interest**
              
              **$.001
                  Par Value**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Equity****Balance
                  at December 31, 2005**
              
              $
              209,972
              
              
              
              
              $
              -
              
              $
              -
              
              $
              (23,225
              )
              $
              186,747Capital
                  subscribed
              
              
              3,008,333
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              3,008,333Cash
                  contributions, net
              
              
              165,028
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              165,028High
                  Tide Shares retained by High Tide stockholders in connection with
                  merger
                  with MMC North America on May 15, 2006
              
              
              -
              
              
              11,750,000
              
              
              11,750
              
              
              -
              
              
              -
              
              
              11,750Shares
                  issued to MMC North America members in relation to merger with
                  High Tide
                  on May 15, 2006
              
              
              (3,383,333
              )
              
              23,875,000
              
              
              23,875
              
              
              3,359,458
              
              
              -
              
              
              -Stock
                  awards and options
              
              
              -
              
              
              62,788
              
              
              63
              
              
              89,563
              
              
              -
              
              
              89,626Common
                  shares issued for cash
              
              
              -
              
              
              12,000,968
              
              
              12,001
              
              
              11,625,896
              
              
              -
              
              
              11,637,897Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (4,776,851
              )
              
              (4,776,851
              )**Balance
                  at September 30, 2006**
              
              $
              -
              
              
              47,688,756
              
              $
              47,689
              
              $
              15,074,917
              
              $
              (4,800,076
              )
              $
              10,322,530





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




-6-


MMC
      ENERGY, INC.


CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)




**Nine
                  Months Ended September 30, 2006**
              
              **February
                  7, 2005(date of inception) toSeptember 30,
                  2005****Operating
                  Activities of Continuing Operations**Net
                  loss
              
              $
              (4,776,851
              )
              $
              -Adjustments
                  to reconcile net (loss) to cash used in operating
                  activitiesDepreciation
                  and amortization
              
              
              464,288
              
              
              -Stock-based
                  compensation
              
              
              89,625
              
              
              -Acquisition
                  costs
              
              
              11,750Changes
                  in current assets & liabilities(Increase)
                  in current assets
              
              
              (555,180
              )
              
              -Increase
                  in current liabilities
              
              
              1,178,034
              
              
              -Increase
                  in long-term deposits
              
              
              (75,000
              )**Net
                  cash used by operations**
              
              
              (3,663,334
              )
              
              -**Investing
                  Activities of Continuing Operations**Purchases
                  of property, plant and equipment
              
              
              (3,537,633
              )
              
              -Deferred
                  acquisition costs
              
              
              (227,208
              )**Net
                  cash used by investing activities**
              
              
              (3,764,841
              )
              
              -**Financing
                  Activities of Continuing Operations**Proceeds
                  from issuance of long-term debt
              
              
              3,000,000
              
              
              -Repayment
                  of long-term debt
              
              
              (74,076
              )Member
                  interest issued, net
              
              
              165,028Proceeds
                  from issuance of stock, net
              
              
              11,637,897
              
              
              -**Net
                  cash provided by financing activities**
              
              
              14,728,849
              
              
              -**Net
                  increase in cash and cash equivalents**
              
              
              7,300,674
              
              
              -Beginning
                  cash and cash equivalents at beginning of period
              
              
              3,009,010
              
              
              -Cash
                  and cash equivalents at end of period
              
              $
              10,309,684
              
              $
              -**Supplemental
                  Disclosures:**Cash
                  paid for taxes
              
              $
              -
              
              $
              -Cash
                  paid for interest
              
              $
              131,915
              
              $
              -**Non-cash
                  investing and financing activities**Subscription
                  agreements for member interests of that were subscribed and paid
                  up in
                  2005 but not accepted by the company until January 3, 2006
              
              $
              3,008,333
              
              $
              -Stock-based
                  compensation
              
              
              89,625
              
              
              -Acquisition
                  costs in reverse merger with High Tide Ventures, Inc.
              
              
              11,750
              
              
              -





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




-7-




**MMC
      ENERGY, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30, 2006**


**(Unaudited)**




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




**General**




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with Regulation S-X, and therefore, do not include all
      the information necessary for a fair presentation of financial position, results
      of operations and cash flows in conformity with generally accepted accounting
      principles.




In
      the
      opinion of management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been included. The unaudited
      condensed consolidated financial statements should be read in conjunction with
      the Form 8-K Current Report dated and filed on May 15, 2006, which includes
      the
      audited financial statements of MMC Energy North America and notes thereto
      for
      the period from February 7, 2005 (date of inception) to December 31,
      2005.





**Organization
      and Line of Business**




The
      Company is a North American energy acquisition company, which primarily acquires
      and operates power generation and associated energy infrastructure assets.
      The
      Company’s mission is to create long-term value from deep discount acquisitions
      through a dual focus on structuring disciplined acquisitions and hands on
      post-acquisition asset management.




MMC
      Energy North America, LLC (“MMC North America”) was formed under the laws of the
      state of Delaware on February 7, 2005. On January 9, 2006, MMC North America
      acquired substantially all of the assets of Dispersed Generating Company, LLC
      (the “Seller”), consisting primarily of two power generating facilities located
      in the San Diego, California area (the “Facilities”). MMC North America was in
      the development stage, as
      defined by Statement of Financial Accounting Standards No. 7 (“SFAS No. 7”)
      until June 12, 2006, at which time it completed the re-commissioning of the
      Facilities and commenced normal operations and revenue recognition.
      MMC North America in turn formed two wholly-owned subsidiaries, MMC Chula Vista,
      LLC and MMC Escondido, LLC, both of which are Delaware limited liabilities
      companies, and each of which holds one of the two Facilities. On May 15, 2006,
      as described in more detail under Note 10 below, MMC North America merged with
      MMC Energy, Inc., a Nevada corporation, with the latter entity succeeding to
      the
      business of MMC North America.




On
      September 22, 2006, the Company was reincorporated as a Delaware corporation
      by
      means of a merger of the existing Nevada corporation with and into MMC Energy,
      Inc., a newly-formed Delaware corporation. Pursuant to the reincorporation
      merger, the Delaware corporation succeeded to the business of the Nevada
      corporation and the separate existence of the Nevada corporation
      ceased.




All
      significant inter-company transactions and balances have been eliminated in
      consolidation.






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





**Basis
      of Consolidation**





These
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries. All intercompany accounts and transactions have
      been
      eliminated.





**Revenue
      Recognition**





For
      revenue from products and services, the Company recognizes revenue 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.





-8-




On
      December 17, 2003, the SEC staff released Staff Accounting Bulletin (SAB)
      No. 104, Revenue Recognition.  The staff updated and revised the existing
      revenue recognition in Topic 13, Revenue Recognition, to make its interpretive
      guidance consistent with current accounting guidance, principally EITF Issue
      No.
      00-21, “Revenue Arrangements with Multiple Deliverables.”  Also, SAB 104
      incorporates portions of the Revenue Recognition in Financial Statements -
      Frequently Asked Questions and Answers document that the SEC staff considered
      relevant and rescinds the remainder. The Company’s revenue recognition policies
      are consistent with this guidance; therefore, this guidance will not have an
      immediate impact on the Company’s financial statements.





The
      Company records revenues in connection with delivering electric power and
      ancillary services, generally being on call to provide power on ten minutes
      notice, to the California Independent System Operator (“CAISO”), or such other
      third parties as it may contract with directly from time to time. The Company
      commenced earning revenues during June 2006. In the event that the Company
      is
      compensated for services before they are rendered, the Company will record
      deferred revenue in the liability section of its balance sheet.





Revenues
      consist of energy production, ancillary services, which the Company earns by
      having its capacity available on ten minutes notice to provide critical real
      time balancing services to the power grid, and contracted resource adequacy
      capacity revenues.





Energy
      Production **-** The
      provision of electric power to a local power grid through day ahead and real
      time auctions managed by the ISO, the “merchant market”, or through bilateral
      agreements with a utility or other direct counterparty. As MMC has no
      outstanding power purchase agreements or other contracted energy production,
      all
      of its revenues are earned in the merchant market.





Ancillary
      Services - Although there are several types of ancillary services, the Company,
      to date, primarily provides “spin” and “non-spin” services which call for the
      facilities to be delivering the awarded capacity within 10 minutes of dispatch
      whether connected to the grid (spin) or not (non-spin). Spin services typically
      offers higher rates.





Capacity
      Revenues - Regulatory capacity payments for generators of any type based
      strictly on total installed capacity measured in megawatts (MW). In the CAISO
      market where the Company currently operates exclusively, market-based capacity
      revenues are earned through Resource Adequacy contracts. The resource adequacy
      capacity amount cannot exceed the Qualified Capacity amount for the resource.
      Qualified Capacity is certified by the CAISO and the California Public Utility
      Commission. For 2006, the Escondido and Chula Vista were certified by CAISO
      and
      the CPUC for 40 MW each.





**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 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.





**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.





-9-




**Property
      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:




Automobiles
            
            5
                yearsOffice
                equipment
            
            3
                yearsMachinery
                and equipment
            
            5
                years





**Long-Lived
      Assets**





The
      Company reviews annually, and as circumstances dictate, the carrying amount
      of
      its property and equipment and patents. The purpose of these reviews is to
      determine whether the carrying amounts are recoverable. Recoverability is
      determined by examining and comparing respective carrying amounts versus
      expected revenue streams from the related businesses. The amount of impairment,
      if any, is measured based on the excess of the carrying value over the fair
      value.





**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 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 is high due to the relatively
      small number of entities comprising the Company's customer base. The Company's
      revenues earned on contracts for the three and nine month periods ending
      September 30, 2006 were comprised of 85% and 87%, respectively, from one
      customer, the CAISO. The Company received the balance of its revenues from
      Oxy,
      Inc.





**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. 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 corresponds to peak demand.





**Geographical
      Concentration Risk**





The
      Company’s Facilities are located in greater San Diego, California, and generally
      provide power only in that state. Accordingly, the Company’s operations are
      highly regulated by the local San Diego Air Permit Control Board, the CAISO
      and
      other related state and local agencies, as well as the Federal Energy Regulation
      Commission. Such organizations establish certain rules and limitations on
      operations and require that the Company maintain in good standing several
      required licenses and permits, such as limits on air emissions. These
      organizations may from time to time change the rules under which the Company
      operates and derives its revenues. The Company’s licenses and permits were,
      generally, transferred with the Facilities from the Seller, and the Company
      believes it has all such required licenses and permits to conduct its
      operations.





**Advertising**





The
      Company follows the policy of charging the costs of advertising to expenses
      incurred. The Company incurred no advertising costs for the period ended
      September 30, 2006.





**Comprehensive
      Income**





Statement
      of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive
      Income,” 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. The Company does not have any items of comprehensive income in
      the
      period presented.





-10-





**Segment
      Information**




The
      Company adopted Statement of Financial Accounting Standards No. 131, Disclosures
      about Segments of an Enterprise and Related Information ("SFAS 131"). SFAS
      131
      establishes standards for reporting information regarding operating segments
      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 how to allocate resources and assess performance. The Company
      currently has only one operating segment.





**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 realizability of
      inventories, the amounts due under accounts payable and the valuation allowance
      of deferred tax assets. Actual results could differ from those
      estimates.





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





Basic
      and
      diluted loss per common share is based upon the weighted average number of
      common shares outstanding during the fiscal year under the provisions of SFAS
      No. 128, Earnings Per Share and as amended/superseded in SFAS No. 123(R),
      Share-Based Payment. As the Company incurred a net loss for the nine months
      ended September 30, 2006 dilutive shares presented for that period are the
      same
      as basic shares outstanding. There are no anti-dilutive securities issued and
      outstanding. Below is a reconciliation of basic to diluted shares outstanding
      for the applicable periods: ****




Three
                  Months Ended September 30, 2006
              
              Nine
                  Months Ended September 30, 2006Weighted
                  average shares outstanding - Basic
              
              
              47,625,968
              
              
              35,712,498Dilutive
                  effect of assumed exercise of employee stock options, warrants
                  and
                  immediate vesting of unvested stock awards
              
              
              838,627
              
              
              -Weighted
                  average shares outstanding - Diluted
              
              
              48,464,595
              
              
              35,712,498




**Stock-Based
      Compensation**





As
      of the
      merger described in Note 10 below, MMC adopted SFAS No. 123(R) which no longer
      permits the use of the intrinsic value method under APB No. 25. The Company
      uses
      the modified prospective method to adopt SFAS No. 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.





-11-




The
      following tables illustrates the effect that adoption of SFAS No. 123(R) had
      on
      the Company’s nine months ending September 30, 2006 results and cash flows as
      well as the parameters used in the valuation of options granted in the first
      nine months of 2006.




Under
                  Pre-SFASNo.123 (R)Accounting
              
              SFAS
                  No.123( R) Impact
              
              ActualNine
                  Months Ended September 30, 2006Earnings
                  before taxes
              
              $
              (4,687,226
              )
              $
              (89,625
              )
              $
              (4,776,851
              )Net
                  Earnings
              
              
              (4,687,226
              )
              
              (89,625
              )
              
              (4,776,851
              )**Net
                  Earnings**Basic
                  EPS
              
              $
              (0.13
              )
              $
              -
              
              $
              (0.13
              )Diluted
                  EPS
              
              
              (0.13
              )
              
              -
              
              
              (0.13
              )**Cash
                  Flows**Operating
                  Activities
              
              $
              (3,663,334
              )
              $
              -
              
              $
              (3,663,334
              )Financing
                  Activities
              
              
              14,728,849
              
              
              -
              
              
              14,728,849





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




Options
                Outstanding
            
            
            
            Options
                ExercisableExercisePrices
            
            NumberOutstanding
            
            Weighted
                AverageRemaining ContractualLife
                (Years)
            
            Weighted
                AverageExercise
                Price
            
            NumberExercisable
            
            Weighted
                AverageExercise
                Price$
                1.00
            
            1,070,000
            
            9.62
            
            $1.00
            
            -
            
            $1.00





Transactions
      during 2006 involving stock options issued to employees are summarized as
      follows:





Number
                of Shares
            
            Weighted
                AveragePrice
                Per ShareOutstanding
                at December 31, 2005
            
            
            -
            
            $
            -Granted
            
            
            1,070,000
            
            
            1.00Exercised
            
            
            -
            
            
            -Cancelled
                or expired
            
            
            -
            
            
            -**Outstanding
                at September 30, 2006**
            
            
            **1,070,000**
            
            **$**
            **1.00**





Based
      on
      the Company’s closing stock price of $2.30 at September 30, 2006, stock options
      currently outstanding had an aggregate intrinsic value of $1,391,000, and there
      were no in-the-money options exercisable. As of September 30, 2006, such options
      had a weighted-average remaining contractual life of 9.62 years and
      weighted-average exercise price of $1.00 per share.





The
      weighted-average fair value of stock options granted to employees during the
      nine months ended September 30, 2006 and the weighted-average significant
      assumptions used to determine those fair values, using a Black-Scholes option
      pricing model were as follows:





Significant
                assumptions (weighted-average):Risk-free
                interest rate at grant date
            
            
            5.06
            %Expected
                stock price volatility
            
            
            59
            %Expected
                dividend payout
            
            
            0.00Expected
                option life-years (a)
            
            
            6.00


(a)
              The
                  expected option/warrant life is based on vested
                  dates.




-12-





**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.





**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 a
      warrant to purchase 450,000 shares of common stock at an exercise price of
      $0.01
      per share. This warrant was issued in lieu of cash as payment for professional
      services rendered to the Company. The warrant was 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.





**Recent
      Accounting Pronouncements**





SFAS
      158.
      In September 2006 the FASB issued its Statement of Financial Accounting
      Standards 158 “Employers’ Accounting for Defined Benefit Pension and Other
      Postretirement Plans”. This
      Statement improves
      financial reporting by requiring an employer to recognize the overfunded or
      underfunded status of a defined benefit postretirement plan (other than a
      multiemployer plan) as an asset or liability in its statement of financial
      position and to recognize changes in that funded status in the year in which
      the
      changes occur through comprehensive income of a business entity or changes
      in
      unrestricted net assets of a not-for-profit organization. This Statement also
      improves financial reporting by requiring an employer to measure the funded
      status of a plan as of the date of its year-end statement of financial position,
      with limited exceptions. The effective date for an employer with publicly traded
      equity securities is as of the end of the fiscal year ending after December
      15,
      2006. The Company does not expect adoption of this standard will have a material
      impact on its financial position, operations or cash flows.





SFAS
      157.
      In September 2006 the Financial Account Standards Board (the “FASB”) issued its
      Statement of Financial Accounting Standards 157, Fair Value Measurements. This
      Statement defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles (GAAP), and expands disclosures
      about fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice. FAS 157 effective date is for fiscal
      years beginning after November 15, 2007. The Company does not expect adoption
      of
      this standard will have a material impact on its financial position, operations
      or cash flows.





FIN
      48.
      In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for
      Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in
      income taxes recognized in an enterprise’s financial statements in accordance
      with FASB Statement No. 109, Accounting for Income Taxes. This Interpretation
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. This Interpretation also provides guidance on
      de-recognition, classification, interest and penalties, accounting in interim
      periods, disclosure, and
      transition. The Company does not expect the adoption of this Interpretation
      to
      have a material impact on its consolidated financial position, results of
      operations or cash flows.





**Reclassifications**





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





-13-




**NOTE
      3 - RECEIVABLES AND PREPAID ITEMS**




At
      September 30, 2006 and December 31, 2005 trade accounts receivable and prepaid
      items consisted of the following:




**September
                  30, **2006****
              
              **December
                  31,** **2005**Accounts
                  and unbilled receivables
              
              $
              110,907
              
              $
              -Allowance
                  for doubtful accounts
              
              
              -
              
              
              -Accounts
                  receivable, net
              
              $
              110,907
              
              $
              -




**September
                  30, **2006****
              
              **December
                  31,****2005**Prepaid
                  Insurance
              
              $
              67,475
              
              $
              -Prepaid
                  Expenses
              
              
              276,070
              
              
              -Short-Term
                  Deposits
              
              
              300,727
              
              
              200,000Total
                  Prepaids
              
              $
              644,272
              
              $
              200,000




**NOTE
      4 - PROPERTY, PLANT AND EQUIPMENT**





At
      September 30, 2006 and December 31, 2005 property, plant and equipment consisted
      of the following:




**September
                  30, **2006****
              
              **December
                  31,****2005**Land
              
              $
              375,000
              
              $
              -Automobile
              
              
              20,427
              
              
              -Office
                  equipment
              
              
              7,381
              
              
              -Machinery,
                  equipment & other
              
              
              3,134,825
              
              
              -3,537,633
              
              
              -Accumulated
                  depreciation
              
              
              (464,288
              )
              
              -**Total**
              
              $
              3,073,345
              
              $
              -




Depreciation
      for the quarter and nine months ended September 30, 2006 were $158,244 and
      $464,288 respectively.





**NOTE 5
      - 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 six
      months, and 81 equal 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%. 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. As of September 30, 2006 all escrowed funds for repair
      and re-commissioning had been expended for the intended use.





Advances
      against the Revolver are payable on demand and bear interest at the Prime Rate
      plus 1.00%. Beginning in 2007, 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 Loans are collateralized by substantially all assets of
      MMC
      North America and are personally guaranteed, jointly and severally, by the
      three
      principal officers of the Company. Any losses sustained by any officer under
      such guaranty shall be indemnified by the Company.





-14-





**NOTE 6
      - COMMITMENTS AND CONTINGENT LIABILITIES**





MMC
      North
      America has arranged for the issuance by the Bank of an irrevocable letter
      of
      credit in the amount of $175,000 (the “Letter of Credit”) to a counterparty
      under an energy services agreement entered into in May 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 in the event MMC North America fails to meet its
      obligations, or for any other unsatisfied obligations under the ESA. The Letter
      of Credit expires on February 28, 2007. Availability under the Revolver is
      reduced from $500,000 to $325,000 while the Letter of Credit remains
      outstanding.




The
      Company’s primary office space is leased for a one year term expiring February
      28, 2007. Aggregate remaining payments under the lease as of September 30,
      2006
      are approximately $16,000.





Neither
      the Company nor any subsidiary has any involvement in any legal proceeding
      as of
      the report date.





**NOTE 7
      - EQUITY COMPENSATION**





Under
      the
      Company’s 2006 Equity Incentive Plan (the “Plan”), 2,000,000 shares of common
      stock are reserved for issuance as incentive awards to executive officers,
      key
      employees and directors and outside consultants. On September 19, 2006, the
      stockholders of the Company approved an amendment to the Plan that increased
      the
      shares reserved for issuance under the Plan to 5,000,000. As of September 30,
      2006, 1,070,000 shares had been granted to employees in the form of stock option
      grants, with an exercise price of $1.00 per share, the market value of the
      Company’s common stock at the time of issue. Additionally, in September 2006 the
      Company awarded 62,788 shares of restricted stock to its five independent
      directors as compensation for services.





**NOTE
      8 - STOCKHOLDERS' EQUITY**





On
      the closing of the Merger described in Note 10 below (the “Merger”), MMC North
      America’s outstanding equity interests were surrendered by the holders thereof
      for 23,875,000 shares of common stock of the Company, par value $0.001 per
      share
      (“Common Stock”). The existing stockholders of Pubco (as defined in Note 10
      below) retained the 11,750,000 shares of Common Stock outstanding prior to
      the
      Merger and concurrently with the Merger, the Company issued 10,000,968
      additional shares of Common Stock in a private placement for total proceeds
      of
      $10,000,966. On May 26, 2006, the Company issued an additional 2,000,000 shares
      of Common Stock under the same terms as the first private placement for
      additional proceeds of $2,000,000. The Company realized total proceeds of
      $11,637,897 net of direct financing costs of $813,069, of which $450,000 was
      settled in the form of a warrant to purchase 450,000 shares of Common Stock
      at
      an exercise price of $0.01 per share. This warrant expires on May 15, 2011.
      During the quarter ended September 30, 2006, the Company issued 62,788 shares
      of
      restricted stock to its five independent directors as compensation. These share
      awards vest on May 15, 2007. 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 47,688,756 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.





In
      connection with the issuance of the 12,000,968 shares of Common Stock in the
      private placements described above, the Company was obligated to file a
      registration statement with to permit the resale of the shares issued in the
      private placements with the Securities and Exchange Commission (the “SEC”) by
      September 12, 2006.  If the registration statement was not filed with the
      SEC by that date or if the SEC did not declare the registration statement
      effective within 120 days after filing, the Company is subject to
      liquidated damages payable to the holders of the shares issued in the private
      placements (the “Holders”) in cash equal to 1% per month of the purchase price
      of the shares issued, or $120,000 per month, until 12 months after the date
      of
      issue.  From that point forward, penalties are limited to only those shares
      that are not otherwise freely tradable under SEC Rule 144, which rule limits
      the
      volume of shares that may be resold by each Holder for a period from 12 to
      24
      months after date they were issued.





On
      October 17, 2006, a majority of Holders approved an extension of the filing
      requirement to December 31, 2006, and agreed to cap aggregate registration
      penalties at 12%. However, the aforementioned penalties accrued up to October
      17, 2006 were not explicitly waived. Accordingly, the Company has reserved
      for
      such penalties for the period from September 13, 2006 through October 17, 2006,
      or 34 days, at the rate of 1% per month, amounting to $136,000 charged to
      non-operating financing costs. The maximum additional penalties to the Company,
      should it fail to file a registration statement by December 31, 2006, would
      be
      $753,000 in the aggregate, representing 7.4% of the net proceeds from the stock
      issue, inclusive of the penalties incurred to date.





-15-





**NOTE
      9 - RELATED PARTY TRANSACTIONS**





The
      Company paid management fees of $260,000, inclusive of a $60,000 transaction
      fee, capitalized as a component of the acquisition costs of the Facilities,
      and
      $200,000 in quarterly management fees expensed as incurred, in the six months
      ended June 30, 2006 to MMC Energy Management, LLC, (“MMC Management”), an
      affiliate controlled by the three executive officers of the Company. Effective
      July 1, 2006, the management services agreement between MMC North America and
      MMC Management was terminated, and replaced by a new management services
      agreement between MMC North America and the Company, such that there will be
      no
      future impact on the Company’s consolidated earnings and cash flows from the
      management fee. As required by the Merger Agreement, no further business has
      been transacted between the Company and MMC Management subsequent to the Merger,
      and MMC Management was dissolved on November 6, 2006.





**NOTE
      10 - MERGER AND CORPORATE RESTRUCTURING**





MMC
      Energy, Inc. was originally incorporated in Nevada under the name High Tide
      Ventures, Inc. (“Pubco”). On
      May 3,
      2006, Pubco changed its name to MMC Energy, Inc. On May 15, 2006, MMC Energy
      Acquisition Corp., a wholly-owned subsidiary of Pubco (“Acquisition Sub”),
      merged (the “Merger”) with and into MMC Energy North America. As described in
      Note 1 above, prior to the Merger, MMC North America owned the Facilities and
      conducted the Company’s current business and Pubco did not conduct meaningful
      operations. Pursuant to the Merger, Pubco thus acquired the business of MMC
      North America, including the Facilities, and the former members of MMC North
      America received shares of Pubco common stock. Simultaneously with the Merger,
      Pubco consummated a $12 million private placement of shares of common stock.
      This Merger is accounted for as a reverse takeover of Pubco by MMC North
      America. As a
      result of the Merger, there was a change in control of Pubco. In accordance
      with
      SFAS No. 141, Accounting for Business Combinations, MMC Energy North America
      was
      the acquiring entity for accounting purposes. While the transaction is accounted
      for using the purchase method of accounting, in substance transaction was a
      recapitalization of Pubco’s capital structure.





The
      total
      purchase price and carrying value of net assets acquired was $11,750. The
      Company did not recognize goodwill or any intangible assets in connection with
      the transaction. From January 1, 2005 until the date of the transaction, Pubco
      was an inactive corporation with no significant assets and liabilities.
      Effective with the merger, all previously outstanding membership interests
      owned
      by MMC Energy North America’s members were exchanged for an aggregate of
      23,875,000 shares of the Company’s common stock. The value of the stock that was
      issued to MMC North America’s equity holders was the historical cost of the
      Company's net tangible assets, which did not differ materially from their fair
      value.





The
      total
      consideration paid was $11,750 and the significant components of the transaction
      are as follows:





Common
                stock retained
            
            $
            11,750Assets
                acquired
            
            
            (---
            )Liabilities
                assumed
            
            
            ---Cash
                paid
            
            
            ---Total
                consideration paid/organization cost
            
            $
            11,750





In
      accordance with SOP 98-5, the Company expensed $11,750 as organization
      costs.





**NOTE
      11 - SUBSEQUENT EVENTS**





On
      October 5, 2006, MMC Mid-Sun, LLC (“MMC Mid-Sun”), a wholly-owned subsidiary of
      the Company, entered into a binding purchase and sale agreement with Kellstrom
      Commercial Aerospace, Inc. (the “Seller”) for the purchase of an LM-2500 gas
      turbine at a price of $3.15 million. The acquisition closed on October 10,
      2006.
      MMC Mid-Sun purchased the turbine for installation in the Mid-Sun power
      generation facility, which MMC Mid-Sun agreed to acquire on August 8, 2006.
      The
      Company expects to close the acquisition of the power generation facility in
      November 2006 and to install the new turbine in connection with re-commissioning
      the plant shortly thereafter.





-16-




On
      October 30, 2006, the Company exercised an option to extend the term of the
      land
      lease of its Chula Vista facility until November 1, 2012. The approximate annual
      rent payments are disclosed in the table below:




**Year**
              
              **Rent**2007
              
              $104,0002008
              
              107,0002009
              
              110,0002010
              
              114,0002011
              
              117,0002012
              
              $121,000





**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF
      OPERATION**




**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF**


**FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS**




*The
      following discussion and analysis of the Company’s financial condition and
      results of operations should be read in conjunction with its financial
      statements and notes thereto appearing in its public filings including this
      report. This discussion and analysis contains forward-looking statements that
      involve risks and uncertainties. The Company’s actual results may differ
      materially from those anticipated in these forward-looking statements as a
      result of a number of factors.*





*This
      report contains forward-looking statements and information relating to the
      Company. The Company generally identify forward-looking statements using words
      like “believe,” “intend,” “will,” “expect,” “may,” “should,” “plan,” “project,”
“contemplate,” “anticipate,” “seek” or similar terminology. These statements are
      based on the Company’s beliefs as well as assumptions it made using information
      currently available to its. Because these statements reflect the Company’s
      current views concerning future events, these statements involve risks,
      uncertainties and assumptions. Actual results may differ significantly from
      the
      results discussed in these forward-looking statements.*




**Critical
      Accounting Policies**




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





**Revenue
      Recognition**





Revenue
      is recognized when all of the following circumstances are satisfied:
      a) persuasive evidence of an arrangement exists, b) price is fixed or
      determinable, c) collectibility is reasonably assured, and d) delivery
      has occurred. Revenues are recognized upon delivery of energy or services.
      The
      revenues the Company collects for ancillary services and energy delivery
      fluctuate based on market prices established by the CAISO on a daily, hourly
      and
      real-time basis.





The
      Company recognizes energy production revenue when energy has been substantially
      transmitted to the customer. The Company recognizes revenue when electric power
      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 (“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 megawatt hours (“MWh”) delivered, at the relevant
      day-ahead or real-time prices.   Aside from bilateral contracts which
      the Company may enter into from time to time, the Company generally offers
      its
      energy to the ISO daily at its variable cost to produce plus a desired minimum
      profit margin.  The Company’s facilities can only be dispatched if the
      market clearing price exceeds the Company’s bid price.  The Company may
      also receive “out of merit” dispatches in times when the market price is less
      than the Company’s bid price, but its power is needed locally due to local
      transmission constraints, in which case the Company will be paid its bid price
      for energy provided.





The
      Company also recognizes revenues from the provision of ancillary services and
      under resource adequacy contracts. Although there are several types of ancillary
      services, the Company, to date, primarily provides “spin” and “non spin”
services whose revenues are recognized at the time of dispatch by the ISO.
      Resource adequacy contract (capacity) revenues are recognized based on the
      CPUC
      and CAISO certified Qualified Capacity.





-17-




**RESULTS
      OF OPERATIONS**





Since
      the
      Company’s operations commenced on October 27, 2005 and was considered a
      development stage enterprise until June 12, 2006, comparing periods in 2005
      with
      corresponding periods in 2006 for the Company’s of results of operations are not
      meaningful.





**Revenues**





Revenues
      consist of energy production, ancillary services, which the Company earns by
      having its capacity available on ten minutes notice to provide critical real
      time balancing services to the power grid, and contracted resource adequacy
      capacity revenues.





Energy
      Production **-** The
      provision of electric power to a local power grid through day ahead and real
      time auctions managed by the ISO, the “merchant market”, or through bilateral
      agreements with a utility or other direct counterparty. As MMC has no
      outstanding power purchase agreements or other contracted energy production,
      all
      of its revenues are earned in the merchant market.





Ancillary
      Services - Although there are several types of ancillary services, the Company,
      to date, primarily provides “spin” and “non-spin” services which call for the
      facilities to be delivering the awarded capacity within 10 minutes of dispatch
      whether connected to the grid (spin) or not (non-spin). Spin services typically
      offers higher rates.





Capacity
      Revenues - Regulatory capacity payments for generators of any type based
      strictly on total installed capacity measured in megawatts (MW). In the CAISO
      market where the Company currently operates exclusively, market-based capacity
      revenues are earned through Resource Adequacy contracts. The resource adequacy
      capacity amount cannot exceed the Qualified Capacity amount for the resource.
      Qualified Capacity is certified by the CAISO and the California Public Utility
      Commission. For 2006, the Escondido and Chula Vista were certified by CAISO
      and
      the CPUC for 40 MW each.





Revenues
      for the three and nine months ended September 30, 2006 were $2,515,000 and
      $2,786,000 respectively and distributed as follows:




**Periods
                  Ended September 30, 2006****Operating
                  revenues:**
              
              **Nine
                  Months**
              
              **Three
                  Months**Energy
                  production
              
              $
              712,319
              
              $
              693,645Ancillary
                  services
              
              
              1,693,853
              
              
              1,441,581Resource
                  adequacy capacity
              
              
              380,000
              
              
              380,000**Total
                  operating revenues**
              
              $
              2,786,172
              
              $
              2,515,226




**Cost
      of Sales**





Cost
      of
      sales for the third quarter of 2006 was $673,000, yielding a gross profit of
      $1,842,000 and a gross margin of 73%. Cost of sales for the nine months ended
      September 30, 2006 was approximately $723,000, yielding a gross profit of
      $2,063,000 and a gross margin of 74%.  Gross margin was relatively high due
      to the high price of energy relative to stable fuel costs, and low direct
      variable costs associated with ancillary and capacity revenues. Cost of sales
      also includes a fixed monthly charge under a third party energy services
      management agreement. Costs of sales were distributed as follows along with
      the
      relevant gross margins.




**Periods
                  Ended September 30, 2006**
              
              
              
              
              
              **Gross
                  Margin %****Costs
                  of sales:**
              
              **Nine
                  Months**
              
              **Three
                  Months**
              
              **Nine
                  Months**
              
              **Three
                  Months**Costs
                  of energy generation
              
              $
              345,266
              
              $
              330,789
              
              
              51.5
              %
              
              52.3
              %Costs
                  of ancillary services
              
              
              353,051
              
              
              316,720
              
              
              79.2
              %
              
              78.0
              %Costs
                  of resource adequacy capacity
              
              
              25,000
              
              
              25,000
              
              
              93.4
              %
              
              93.4
              %**Total
                  costs of sales**
              
              $
              723,317
              
              $
              672,509
              
              
              74.0
              %
              
              73.3
              %





Costs
      of
      sales include these major expenses:





Fuel
      costs - Costs for fuel, primarily gas, used in the production of energy as
      well
      as the minimum fuel required to keep the Facilities on-line and connected to
      the
      grid for the provision of ancillary services.





-18-




Grid
      management charges - Charges associated with the reasonable costs of connection,
      switching, metering, transmission, distribution, safety provisions, and
      administrative 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 as mandated by extant regulatory and governing
      bodies.





Variable
      operations and maintenance - Costs that are accrued for Planned Major
      Maintenance Activities (PMMA). These costs are accrued based on activities
      that
      are direct drivers of future PMMA, primarily MwH produced for energy generation
      services. A less significant component of variable operations and maintenance
      relates to non-fuel consumables used in operations, such as water for cooling
      and ammonia for emissions control.





**Operations
      and Maintenance**





Operations
      and maintenance expenses consist of the direct overhead expenses for operating
      and maintaining the Company’s existing facilities, consisting primarily of two
      power generating facilities located in the San Diego, California area (the
      “Facilities”). For the third quarter of 2006, operations and maintenance
      expenses were $709,000, which consisted primarily of fixed charges such as
      contracted labor, depreciation, interconnection costs and other period costs.





For
      the
      nine months ended September 30, 2006, operations and maintenance expenses were
      $1,442,000, which included fixed charges such as contracted labor, leases,
      property taxes, insurance and depreciation expenses, all of which accrue even
      when the Facilities are off line, as was the case through most of the first
      two
      quarters of 2006.





**Re-commissioning
      Expenses**





Re-commissioning
      expenses consist of the non-recurring initial planned repairs and
      re-commissioning costs required to restore the Facilities and all related
      equipment to operating condition, including fuel and other costs relating to
      initial test runs of the Facilities. Re-commissioning expenses for the third
      quarter of 2006 were approximately $13,000 reflecting minor expenses not accrued
      in the second quarter.





For
      the
      nine months ended September 30, 2006 re-commissioning expenses was approximately
      $2,156,000, which reflected the total costs of re-commissioning. The
      re-commissioning process was completed in June 2006 and no additional costs
      will
      be incurred with regards to the Facilities. The Company expects to incur such
      costs again with respect to future acquisitions such as the facility to be
      acquired by MMC Mid-Sun as described in Note 11 to the financial statements
      contained in this report.





**General
      and Administrative Expenses**





For
      the
      third quarter of 2006, general and administrative expenses were approximately
      $889,000, which consisted primarily of compensation and professional fees.
      Administrative costs for the quarter also included broken deal costs of
      approximately $150,000 in connection with an abandoned transaction and a catch
      up bonus accrual representing nine months vs. three months of estimated
      costs.





For
      the
      nine months ended September 30, 2006, general and administrative expenses were
      approximately $3,110,000, which consisted primarily of non-recurring financing
      and investor relations expenses of approximately $1,463,000, with the balance
      attributable to professional fees and compensation.





**MANAGEMENT’S
      PLAN OF OPERATION**





The
      Company is an energy management company formed in February 2005 to acquire
      and
      actively manage deep value assets in the U.S. power generation industry.




The
      U.S.
      power generation sector is fragmented and has recently suffered a cyclical
      downturn in most regions, which presents many deep discount acquisition
      opportunities. An oversupply of electric generation capacity exists in many
      regions of the U.S., which is the result of significant **** investments
      in new power generation over the past decade. As a result, power prices have
      declined in many of these overbuilt regions, reducing the value of generation
      assets. Also, the increased volatility in fuel prices has had an adverse effect
      on the few asset owners that can still trade electricity. The owners and
      financiers of these assets, who originally relied on flawed fundamentals and
      unrealistic expectations, have experienced considerable financial distress,
      often leading to bankruptcy, debt restructuring, asset repossession by lenders,
      or asset sales. The Company expects that these companies will continue to divest
      assets at discounted prices to obtain liquidity and retire project debt, leading
      to a substantial number of high-quality, yet financially distressed assets
      that
      are available for sale.




-19-




The
      Company strives to create long-term value from deep discount acquisitions
      through a dual focus on financial structuring and post-acquisition asset
      management. MMC’s target market consists of small to medium-sized “merchant”
power generating facilities, located in California, Texas and the Northeastern
      U.S., where many “red zones” (high electricity demand relative to limited
      available capacity) are present. The US Department of Energy named Southern
      California and the Atlantic coastal area from New York City to northern Virginia
      "critical congestion areas" for electricity transmission.





Merchant
      power facilities, as opposed to “contracted” facilities, compete in the highly
      volatile unregulated wholesale markets for power and lack the stability of
      long
      term contracts at fixed prices for both revenues and fuel costs (typically
      gas
      or coal). Merchant assets require an experienced owner, operator and risk
      manager who is capable of executing and administering all of the necessary
      oversight and controls. On the cost side, such assets are often burdened with
      the typical high cost structure of regulated plants, which include high
      labor costs, outdated utility supply agreements, and out-of-the-money tax
      treatments. The Company believes it will realize a significant amount of value
      through restructuring the plant’s operations and maintenance, repair and
      overhaul contracts, supply and off-take agreements, and re-aligning the plant’s
      cost structure to its new market-based environment.





The
      Company believes that it can compete effectively for deals in its niche market.
      It believes that most large energy investment firms focus primarily on acquiring
      larger regulated and contracted assets. Equipped primarily with financial
      engineering skills as opposed to asset operating experience such as that enjoyed
      by the Company, such firms have a limited universe of acquisition targets and
      greater competition for them. The assets acquired, therefore, typically have
      capped cash flows whose primary value drivers are characterized by low rates
      of
      return and lower weighted average cost of capital. The Company does not believe
      that such firms will be able to extract sufficient returns on investment by
      only
      employing leverage and exchanging cash flow risk for credit risk. Competitors
      for small merchant assets, such as Facilities and future Company targets, are
      typically more lacking in management depth and access to capital and deal
      flow.




The
      Company launched its strategy with its acquisition of the Facilities in the
      San
      Diego, California region in January, 2006. It
      is
      leveraging the acquisition to enter the California wholesale power and
      electricity market, and in particular, the San Diego region, which is currently
      a “red zone.” The
      Company acquired the formerly idle Facilities for what it believes to be a
      deeply discounted value and believes the Facilities are likely to appreciate
      substantially in value following their repair and re-commissioning. The Company
      successfully re-commissioned the Facilities and began earning revenue from
      them
      on June 12, 2006.




The
      Company intends to add further value through expanding the Facilities. The
      Chula
      Vista Facility, one of the Facilities acquired, was originally developed with
      a
      view towards supporting two distinct generating units, and presents an
      attractive expansion opportunity. The Company has obtained a preliminary quote
      to purchase two General Electric LM-6000 turbines, additional ancillary
      equipment and construction services to build out a second unit on site - a
      combined investment of approximately $70 million. The combined 94 MW LM-6000
      units would represent over twice the capacity of the existing unit (94 MW),
      and
      operate much more efficiently. Accordingly, the LM-6000 units would be expected
      to sell energy profitably during virtually all summer “peak hours,” greatly
      enhancing expected revenues and profitability from the Facility.




The
      Company believes additional deal flow will be derived as a result of mergers
      of
      large utilities that will require divestitures in regions where the combined
      entity would otherwise exert excessive market power. Additionally, many assets
      are held by purely financial investors where long-term fixed contracts for
      revenues, fuel supply and operations, shield them from operation risk. As those
      profitable contracts expire or are monetized, such financial owners generally
      will seek to immediately liquidate their investment. The Company’s strategy is
      to acquire such assets that are often available at a deep discount and create
      long-term value by restructuring, refinancing, managing and operating those
      assets.




The
      Company believes its access to deal flow, primarily from proprietary sources,
      provides an additional advantage. It continues to screen deal opportunities
      received through such sources.




The
      Company currently has six full time employees based at the Company’s
      headquarters in New York. The Company has contracted for third party labor
      for
      on-site management of the Facilities as well as 24 hour a day energy management
      and trading support, and generally expects to manage any future facilities
      acquired in a similar fashion for the foreseeable future. To support the
      Company’s future growth plans, we expect to hire additional professional staff
      in the New York office to support increased acquisition activity and asset
      management responsibilities.




-20-




**Liquidity
      and Capital Resources**




As
      of
      September 30, 2006, the Company had $10.3 million in cash and
      equivalents. The
      Company believes this balance will be sufficient to satisfy its cash
      requirements under current operating conditions for at least two years, in
      addition to being sufficient to fund the Mid Sun acquisition. On
      October 5, 2006, MMC Mid-Sun, LLC (“MMC Mid-Sun”), a wholly-owned subsidiary of
      the Company, entered into a binding purchase and sale agreement with Kellstrom
      Commercial Aerospace, Inc. (the “Seller”) for the purchase of an LM-2500 gas
      turbine at a price of $3.15 million. The acquisition closed on October 10,
      2006.
      MMC Mid-Sun purchased the turbine for installation in the a power generation
      facility, which MMC Mid-Sun agreed to acquire on August 8, 2006. The Company
      expects to close the acquisition of the power generation facility in November
      2006 and to install the new turbine in connection with re-commissioning the
      plant shortly thereafter.




However,
      the existing cash balance of the Company is not sufficient to fund the
      acquisition growth strategy described above. Such acquisitions would require
      the
      Company to obtain additional funding in a short period of time. Additionally,
      other elements of the Company’s growth plan, including the Chula Vista
      expansion, will require substantially more capital. The extent and timing of
      the
      capital requirements will be contingent on the specific acquisition targets
      the
      Company is able to source.




As
      described in detail in Note 8 to the financial statements included with this
      report, the Company will be liable for an as yet undermined amount of cash
      as
      liquidated damages relating to its existing registration rights agreement.
      The
      maximum aggregate liquidated damages for which the Company could be liable
      would
      be $753,000.





The
      Company believes that it will be successful in obtaining the working capital
      it
      needs to fund its planned level of operating activities, capital expenditures
      and debt and other obligations through the next 12 months. However, if during
      that period or thereafter, the Company is not successful in obtaining sufficient
      capital resources on terms acceptable to the Company, this could have a material
      adverse effect on the Company's plans to make additional acquisitions and expand
      the Facilities, and/or on the Company’s current business, results of operations,
      liquidity and financial condition. If the
      Company issues additional equity and/or debt securities to meet its future
      capital requirements, the terms of any future equity financings may be dilutive
      to the Company’s stockholders and the terms of any debt financings may contain
      restrictive covenants negatively affecting the Company’s stockholders. The
      Company’s ability to successfully effect future financings will depend on the
      status of its business prospects as well as conditions prevailing in the capital
      markets.





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 nine
      months, and 81 equal 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
      variable rate equal to the Federal Home Loan Bank Rate plus 2.50%. Approximately
      $2.1 million of the Term Loan proceeds were funded into an escrow account under
      control of the Bank and was fully expended strictly on 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.





Advances
      against the Revolver are payable on demand and bear interest at the Prime Rate
      plus 1.00%. Beginning in 2007, 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 Members 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. MMC North America is not in violation of any such covenants. The Loans
      are collateralized by substantially all assets of MMC North America and are
      personally guaranteed, jointly and severally, by the three principal officers
      of
      the Company. Any losses sustained by any officer under such guaranty shall
      be
      indemnified by the Company.





MMC
      North
      America has arranged for the issuance by the Bank of an irrevocable letter
      of
      credit in the amount of $175,000 (the “Letter of Credit”) to a counterparty
      under an energy services agreement entered into in May 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 in the event MMC North America fails to meet its
      obligations, or for any other unsatisfied obligations under the ESA. The Letter
      of Credit expires on February 28, 2007. Availability under the Revolver is
      reduced from $500,000 to $325,000 while the Letter of Credit remains
      outstanding.





-21-




**Off-
      Balance Sheet Arrangements**





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





**Inflation
      and Seasonality**





The
      effect of inflation on the Company’s revenue and operating results was not
      significant. 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. 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 corresponds to peak demand.





**Recent
      Accounting Pronouncements**





SFAS
      158.
      In September 2006 the FASB issued its Statement of Financial Accounting
      Standards 158 “Employers’ Accounting for Defined Benefit Pension and Other
      Postretirement Plans”. This
      Statement improves
      financial reporting by requiring an employer to recognize the overfunded or
      underfunded status of a defined benefit postretirement plan (other than a
      multiemployer plan) as an asset or liability in its statement of financial
      position and to recognize changes in that funded status in the year in which
      the
      changes occur through comprehensive income of a business entity or changes
      in
      unrestricted net assets of a not-for-profit organization. This Statement also
      improves financial reporting by requiring an employer to measure the funded
      status of a plan as of the date of its year-end statement of financial position,
      with limited exceptions. The effective date for an employer with publicly traded
      equity securities is as of the end of the fiscal year ending after December
      15,
      2006. The Company does not expect adoption of this standard will have a material
      impact on its financial position, operations or cash flows.





SFAS
      157.
      In September 2006 the Financial Account Standards Board (the “FASB”) issued its
      Statement of Financial Accounting Standards 157, Fair Value Measurements. This
      Statement defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles (GAAP), and expands disclosures
      about fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice. FAS 157 effective date is for fiscal
      years beginning after November 15, 2007. The Company does not expect adoption
      of
      this standard will have a material impact on its financial position, operations
      or cash flows.





FIN
      48.
      In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for
      Uncertainty in Income Taxes,” which clarifies the accounting for uncertainty in
      income taxes recognized in an enterprise’s financial statements in accordance
      with FASB Statement No. 109, Accounting for Income Taxes. This Interpretation
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. This Interpretation also provides guidance on
      de-recognition, classification, interest and penalties, accounting in interim
      periods, disclosure,


and
      transition. The Company does not expect the adoption of this Interpretation
      to
      have a material impact on its consolidated financial position, results of
      operations or cash flows.





SFAS
      156.
      On March 31, 2006 the FASB issued its Statement of Financial Accounting
      Standards 156 to amend FASB Statement No. 140 “Accounting for Transfers and
      Servicing of Financial Assets and Extinguishments of Liabilities”. FAS 156
      requires an entity to recognize a servicing asset or servicing liability on
      its
      statement of financial position each time it undertakes an obligation to service
      a financial asset. FAS 156’s required effective date of adoption is for the
      first fiscal year beginning after September 15, 2006. The Company does not
      expect adoption of this standard will have a material impact on its financial
      position, operations or cash flows.





SFAS
      123R. On March 31, 2005 the FASB issued its exposure draft, "Share-Based
      Payments", which is a proposed amendment to SFAS 123, “Accounting for
      Stock-Based Compensation.” The exposure draft would require all share-based
      payments to employees, including grants of employee stock options and purchases
      under employee stock purchase plans, to be recognized in the statement of
      operations based on their fair value. The FASB issued the final standard in
      December 2005 that is effective for public companies for interim and annual
      periods beginning after December 15, 2005. The Company has recorded a charge
      of
      $80,250 to expense stock options issued by the Company during the quarter ended
      September 30, 2006 in accordance with SFAS 123(R).





-22-




SFAS
      153.
      On December 16, 2005, FASB issued Statement of Financial Accounting Standards
      No. 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion No.
      29,
      Accounting for Non-monetary Transactions. This statement amends APB Opinion
      29
      to eliminate the exception for non-monetary exchanges of similar productive
      assets and replaces it with a general exception for exchanges of non-monetary
      assets that do not have commercial substance. Under SFAS 153, if a non-monetary
      exchange of similar productive assets meets a commercial-substance criterion
      and
      fair value is determinable, the transaction must be accounted for at fair value
      resulting in recognition of any gain or loss. SFAS 153 is effective for
      non-monetary transactions in fiscal periods that begin after June 15, 2005.
      The
      Company does not expect the adoption of this standard will have a material
      impact on its financial position, results of operations or cash
      flows.





FIN
      47.
      In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, “Accounting for
      Conditional Asset Retirement Obligations, an interpretation of FASB Statement
      No. 143,” which requires an entity to recognize a liability for the fair value
      of a conditional asset retirement obligation when incurred if the liability's
      fair value can be reasonably estimated. The Company is required to adopt the
      provisions of FIN 47 no later than the end of its fiscal 2006. The Company
      does
      not expect the adoption of this Interpretation to have a material impact on
      its
      consolidated financial position, results of operations or cash
      flows.





SFAS
      154.
      In May 2005 the FASB issued Statement of Financial Accounting Standards (SFAS)
      No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion
      No. 20 and FASB Statement No. 3.” SFAS 154 requires retrospective application to
      prior periods’ financial statements for changes in accounting principle, unless
      it is impracticable to determine either the period-specific effects or the
      cumulative effect of the change. SFAS 154 also requires that retrospective
      application of a change in accounting principle be limited to the direct effects
      of the change. Indirect effects of a change in accounting principle, such as
      a
      change in non-discretionary profit-sharing payments resulting from an accounting
      change, should be recognized in the period of the accounting change. SFAS 154
      also requires that a change in depreciation, amortization, or depletion method
      for long-lived, non-financial assets be accounted for as a change in accounting
      estimate effected by a change in accounting principle. SFAS 154 is effective
      for
      accounting changes and corrections of errors made in fiscal years beginning
      after December 15, 2005. Early adoption is permitted for accounting changes
      and
      corrections of errors made in fiscal years beginning after the date this
      Statement is issued. The Company does not expect the adoption of this SFAS
      to
      have a material impact on its consolidated financial position, results of
      operations or cash flows.





SFAS
      155.
      On February 16, 2006 the FASB issued SFAS 155, “Accounting for Certain
      Hybrid Instruments,” which amends SFAS 133, “Accounting for Derivative
      Instruments and Hedging Activities,” and SFAS 140, “Accounting for Transfers and
      Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS 155
      allows financial instruments that have embedded derivatives to be accounted
      for
      as a whole (eliminating the need to bifurcate the derivative from its host)
      if
      the holder elects to account for the whole instrument on a fair value basis.
      SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and
      SFAS
      140. This statement is effective for all financial instruments acquired or
      issued in fiscal years beginning after September 15, 2006. The Company does
      not expect its adoption of this new standard to have a material impact on its
      financial position, results of operations or cash flows.





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**ITEM
      3. CONTROLS AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures**




The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the Company’s 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 the Company’s
      management, including its Chief Executive Officer and Chief Financial Officer,
      to allow timely decisions regarding required disclosure.





As
      of
      September 30, 2006, the Company conducted an evaluation of effectiveness of
      the
      design and operation of its disclosure controls and procedures, under the
      supervision and with the participation of its Chief Executive Officer and Chief
      Financial Officer of its disclosure controls and procedures (as defined in
      Rule
      13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon that evaluation,
      the Company’s Chief Executive Officer and Chief Financial Officer concluded that
      the Company’s disclosure controls and procedures are effective as of such date
      to ensure that information required to be disclosed by us in the reports that
      the Company files or submits under the Exchange Act is recorded, processed,
      summarized and reported, within the time periods specified in the SEC’s rules
      and forms.





**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
      control over financial reporting.




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**PART
      II**


**OTHER
      INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





From
      time
      to time, the Company may become involved in various lawsuits and legal
      proceedings which arise in the ordinary course of business. However, litigation
      is subject to inherent uncertainties, and an adverse result in these or other
      matters may arise from time to time that may harm the Company’s business. The
      Company is currently not aware of nor has any knowledge of any such legal
      proceedings or claims that the Company believes will have, individually or
      in
      the aggregate, a material adverse affect on the Company’s business, financial
      condition or operating results.




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





During
      the three months ended September 30, 2006, the Company issued an aggregate
      of
      62,788 shares of its common stock in exchange for services. The issuances
      considered exempt from registration by reason of Section 4(2) of the Securities
      Act of 1933.





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





None.




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





On
      September 19, 2006, the Company held a special meeting of stockholders to act
      upon the following matters:




1.
            To
                approve the reincorporation of MMC Energy in the State of Delaware;
                and




2.
            To
                approve an amendment to increase the size of the Company's 2006 Stock
                Incentive Plan.




Stockholders
      of record as of August 10, 2006 were eligible to participate in the special
      meeting of stockholders’. The stockholders’ approved, by a majority vote, both
      the reincorporation in Delaware proposal and the proposed amendment to the
      2006
      Stock Incentive Plan. The voting results were as follows:


**Proposal**
              
              **For**
              
              **Against**
              
              **Withheld**
              
              **BrokerNon-Votes**
              
              **Abstentions**Reincorporation
                  - Delaware
              
              26,976,667
              
              8,420
              
              (36,081,310)
              
              9,040,018
              
              56,205Increase
                  to Stock Incentive Plan
              
              24,822,181
              
              2,051,660
              
              (36,081,310)
              
              9,040,018
              
              167,451




**ITEM
      5. OTHER INFORMATION**





None





-25-




**ITEM
      6. EXHIBITS**





(a)
            Exhibits.




3.1
            Certificate
              of
              Incorporation of MMC Energy, Inc.3.2
            By-Laws of MMC Energy,
              Inc.10.10
            Purchase
                and Sale Agreement between MMC Mid-Sun LLC and Kellstrom Commercial
                Aerospace, Inc.10.11
            Lease
                for principal office executed between Constitution Realty, LLC & MMC
                Energy North America10.12
            Assignment
                of lease obligation from MMC Energy North America, LLC to MMC Energy,
                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





-26-


**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/ Karl
              W. MillerKarl
                W. MillerChief
                Executive Officer


By:
            /s/ Denis
              GagnonDenis
              GagnonChief
                Financial Officer and Principal Accounting
                Officer




DATE: November
        8, 2006




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