UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

 For the quarterly period ended June 30, 2014

or

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

For the transition period from __________ to __________

Commission File Number: 000-33491

Green Energy Management Services Holdings, Inc.

(Exact name of registrant as specified in its charter)

(212) 319-8400

(Registrant’s telephone number, including area code)

4001 Highway 190

Covington, Louisiana 70433

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). S  Yes   £  No

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

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

There were 65,518,448 shares of the registrant’s common stock, $0.0001 par value, outstanding as of September 5, 2014, 2014.

GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.

TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION

GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

See accompanying notes to unaudited consolidated financial statements

GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 See accompanying notes to unaudited consolidated financial statements

GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

  See accompanying notes to unaudited consolidated financial statements

GREEN ENERGY MANAGEMENT SERVICES HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The unaudited consolidated financial statements included herein have been prepared by Green Energy Management Services Holdings, Inc. (which, together with its consolidated subsidiary, Green Energy Management Services, Inc. (“GEM”), is referred to herein as the “Company”, “we”, “us” or “our”) pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”).  The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of such information.  All such adjustments are of a normal recurring nature.  Certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations.  The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  These interim financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “Annual Report”), which was filed with the SEC on May 13, 2014.  The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results for any subsequent periods or the entire fiscal year ending December 31, 2014.

Note 2. Organization of the Company and Going Concern

Organization of the Company

We were incorporated pursuant to the laws of the State of Delaware in December 1996.  GEM was incorporated pursuant to the laws of the State of Delaware in March 2010.  We are a full service energy management company based in New York, New York engaged in the business of Energy Efficiency products and system (as discussed below) through GEM, our operating subsidiary.   We currently use commissioned sales representatives to market our products and services.  Our two functional businesses are energy saving lighting products utilizing LED’s (Light Emitting Diodes) and the GEM Water Management System which utilizes water conservation technology (collectively, “Energy Efficiency”). We have successfully deployed these savings measures at Co-op City in the Bronx, New York, one of the world’s largest cooperative housing developments spread out among 15,000 residential units and 35 high rise buildings.

We offer our clients all forms of solutions to maximize the level of Energy Efficiency which can be achieved given the current technologies available to us mainly based in two functional areas: (i) energy efficient lighting upgrades and (ii) water management system solutions.  For the energy saving lighting products market, we provide energy efficient lighting units and services to end users who utilize substantial quantities of electricity.  Our energy managing products and services are primarily sold to municipal and commercial customers.   For the water conservation technology market, we provide our clients with water conservation solutions, primarily under long-term, fixed-price contracts, offering them water valve technology, which has the ability to reduce residential and commercial water usage.  We generally install all of our clean technology at our cost and our revenues are derived from the shared savings with the owner of the project.  We purchase products from outside suppliers and utilize outside contractors to complete customer projects.  Industry participants focus on assisting clients to effectively maximize Energy Efficiency.  

In the Energy Efficiency arena, we concentrate our marketing efforts within geographic regions exhibiting higher than average per kilowatt hour utility rates and water utilization rates and having energy customers who consume higher than average quantities of energy and water.  We develop an Energy Efficiency/energy management program which, potentially, provides end-users alternatives to decrease their energy consumption.  Additionally, in many instances, we assume the management and maintenance of our clients’ lighting needs which affords our clients greater labor efficiencies.  Our water conservation solutions typically do not require further maintenance during the life of the contract.

Going Concern

The accompanying unaudited consolidated financial statements included herein have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying unaudited consolidated financial statements, we have generated a net loss of $515,689 in the first six months of 2014 and we have a working capital deficit of $4,517,967 as of June 30, 2014.  These factors raise substantial doubt about our ability to continue as a going concern.

Our ability to continue our existence and business operations is dependent upon our continuing efforts to implement our new business strategy, management’s ability to achieve meaningful profitable operations and/or upon our ability to obtain additional financing to carry out our business plan.  We intend to fund our operations through equity and/or debt financing arrangements, any revenues generated in the future and any loan arrangements that may be provided to us by our affiliates.  However, there can be no assurance that these arrangements, if any, will be sufficient to fund our ongoing capital expenditures, working capital, and other cash requirements.  The outcome of these matters cannot be predicted at this time.

The accompanying unaudited consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

Note 3. Commitments and Contingencies

Legal Matters

From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business.  Other than as set forth below, no legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve us which, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business or financial condition.

On September 8, 2011, an action entitled Cooper Electric Supply Co. v. Southside Electric, Inc. was filed in the Superior Court of New Jersey.  GEM succeeded to the business of Southside Electric, Inc. (“Southside”) pursuant to a share exchange between Southside and the Company in May of 2010.  We were served in October 2011.  The plaintiff asserts damages in the amount of approximately $23,700 for non-payment for goods supplied by the plaintiff to Southside.  Our management believes the resolution of this matter will not materially affect our financial position, results of operations or liquidity.  As of June 30, 2014 we have paid $9,000 towards the amount of damages claimed by the plaintiff and the remainder is reflected in accounts payable at March 31, 2014 and December 31, 2013.

On September 26, 2011, the landlord for our former Teaneck, New Jersey office filed a complaint for unpaid rent and legal fees of $15,179 in Superior Court of New Jersey.  A judgment was granted in his favor in such amount.  This amount was accrued in accounts payable at June 30, 2014 and December 31, 2013.

The PMP Agreement

On September 29, 2010, GEM entered into a technology license agreement (the “PMP Agreement”) with PMP and Juan Carlos Bocos, the inventor of the water management technology.  Effective as of February 23, 2012, we entered into a technology assignment agreement with PMP and Mr. Bocos, pursuant to which we acquired the rights to a patent application utilized in certain water valves used in our Energy Efficiency solutions.  Pursuant to the technology assignment agreement, GEM was to pay Mr. Bocos a monthly consulting fee of $8,000; however the parties continue their discussions and an agreement resolving all disputes between the parties has not yet been entered into.  Therefore, our title to the intellectual property covering the water valves may be subject to future claims challenging our ownership.

Operating leases

In connection with the appointment of our former CFO effective as of October 11, 2013, we moved our corporate office to New York, NY.  Currently, our corporate office continues to be located in New York, NY. We were utilizing the office space, at no charge, from our former CFO and anticipate to utilize the current office space at no charge. 

Warranty

We provide a limited product warranty against defects in materials and workmanship for water valves installed by us.  We accrue for estimated warranty costs at the time of revenue recognition and record the expense of such accrued liabilities as a component of cost of sales.  Estimated warranty costs are based on historical product data and anticipated future costs.  Should actual failure rates differ significantly from estimates, the impact of these unforeseen costs would be recorded as a change in estimate in the period identified. The warranty reserve at December 31, 2013 and June 30, 2014 is $274,806.

 ESS Sales Agency Agreement

Effective as of March 3, 2011, GEM entered into a Sales Agency Agreement (the “Sales Agreement”) with Energy Sales Solutions, LLC, a Florida limited liability company (“ESS”) and an affiliate of FPF.  Pursuant to the Sales Agreement, ESS agreed to serve, on a non-exclusive basis, as GEM’s sales representative for the solicitation and acceptance of orders for GEM’s entire line of energy-efficient, lighting products and other products and services offered by GEM (the “Products”), in the United States, Canada, and the Caribbean.  GEM agreed to pay ESS a commission of 10% of the gross sales of the Products generated by or on behalf of ESS.  GEM and ESS can each terminate the Sales Agreement immediately for “cause” (as defined in the Sales Agreement).

Patterson Consulting Agreement

On October 1, 2013, we entered into a Consulting Agreement (the “Consulting Agreement”) with an affiliate of former Governor Patterson (the “Consultant”), pursuant to which the Consultant agreed to provide to us certain marketing and sales advisory services and other consulting services.  The effective date of the Consulting Agreement was September 1, 2013.  The Consulting Agreement will continue unless terminated by either party with prior written notice.  Under the terms of the Consulting Agreement, we agreed to pay the Consultant (i) $2,500 for the month of September 2013 and a quarterly cash payment of $15,000, in arrears, for each calendar quarter in which the Consultant provides such services to us, and (ii) a commission of 10% of the gross sales of the products generated by or on behalf of leads provided by the Consultant.  We also agreed to issue to the Consultant 100,000 shares of our restricted common stock for each of the 4 calendar quarters (or pro-rata thereof for a shorter period) in which the Consultant provides such services to us.  For the six months ended June 30, 2014, 100,000 shares of common stock valued at $4,000 ($0.04 per share) were due to the Consultant.

Joint Referral Partner Agreement

In connection with the sale of 12 Units (as defined below) of our securities to the Investor, effective as of November 20, 2013, we and the Investor entered into an Exclusive Joint Referral Partner Agreement (the “JRP Agreement”).  Pursuant to the JRP Agreement, we granted to the Investor an exclusive right to perform construction management services for us in the states of New York, New Jersey and Connecticut, and the Investor agreed to provide to us certain construction management services (including marketing expertise, introduction to business opportunities and energy efficiency programs, analysis of our industry and competitors, assistance in developing corporate partnerships relationships and development of a collaborative joint marketing program, and such other assistance and advise with respect to the services that the Investor is currently providing or may provide in the future as we may request (collectively, the “Services”).  As compensation for the Services, we agreed to pay the Investor a consulting fee in the amount of up to 10% of the Net Revenue (as defined in the JRP Agreement) we receive from the projects that we are directly introduced to by the Investor (excluding opportunities currently available to us).  In lieu of such fee, we may offer to the Investor the option, at our sole discretion, to receive the fee in the form of shares of our common stock for up to 20% of the fee.  The price per share of common stock shall be valued based on a 20% discount to the volume weighted average price during the 30 days preceding such payment date.  The Investor also agreed to pay us a sales fee not to exceed 10% of the net amount of revenues (as provided in the JRP Agreement) that the Investor receives from renovation, construction, development, construction management or other construction agreements that are entered into by the Investor as a result of a direct introduction by us (excluding opportunities currently available to the Investor).

Note 4. Prepayment Under the Water Management Agreement

In February 2014, Riverbay approved Change Order #2 to the water management agreement, pursuant to which we received a discounted buyout amount of $280,000 in lieu of the remaining amount of $355,000 due to date to us under the water management agreement and that the installed water valves used in the Project were now a property of Riverbay.  The payment was made to us in February 2014. As a result of the settlement of such. We recognized during the first quarter in full the amount of $281,077 as cost of revenue earned.

Note 5. Debt and Preferred Stock Issuance

Debt Financing

As of March 31, 2011, GEM entered into the $500,000 Line of Credit Agreement pursuant to the LOC Agreement with a related party lender, pursuant to which the lender initially advanced to GEM $100,000, evidenced by a promissory note of the same amount dated as of equal date. During the second quarter ended June 30, 2011, we borrowed the balance of $400,000 available under the LOC Agreement.  The note bears interest at a rate of 12% per year, with interest on the note paid monthly in arrears.  The repayment of the note was originally due on March 31, 2012.  The parties are in discussions to extend the maturity date of the loan. This balance was outstanding at June 30, 2014 and December 31, 2013.

During the year ended December 31, 2012, certain of our affiliates, a consultant of our Company and a related party provided us with short-term bridge loans in aggregate amount of $280,000 (the “Loans”).  The Loans were not evidenced by promissory notes and do not bear interest.   At December 31, 2013, there was a balance owed of $171,300.  

During the year ended December 31, 2013, we borrowed an additional $23,500 from related parties related to invoices that were paid by the former CFO, and repaid $45,000 of amounts previously borrowed from related parties.

During the year ended December 31, 2012, we borrowed $310,000 from a director of our Company and issued a promissory note to such party dated December 31, 2012.  The note initially matured on February 28, 2013; however, per the terms of the note, it automatically was extended until the date when we consummate a debt and/or equity financing resulting in gross proceeds to us of at least $310,000.  The related debt discount of $310,000 was fully amortized to interest expense during the year ended December 31, 2013.  During the year ended December 31, 2013, we borrowed an additional $288,857 from the director, including the $1,000 advance above, and repaid $340,000 of the aggregate outstanding amount and $13,722 of accrued interest on the loans.

During the six months ended June 30, 2014 we repaid $152,500 of previously borrowed funds from related parties. See footnote 8.

As of June 30, 2014, the balance of notes payable to related parties, including advances, was $892,646.  We are currently engaged in negotiations to extend the term of notes payable to certain related parties.

During the three months ended June 30, 2014, we borrowed an aggregate of approximately of $86,729, of which $49,234 was from a third party and $37,486 was from a related party and repaid an additional $12,600 of loans outstanding.  The loans were not evidenced by promissory notes and the parties have yet to formalize the terms of the loans, such as the interest rate or maturity date. We are currently negotiating with the lender to formalize the terms of the loans.

Debt and Preferred Stock Financing

On February 8, 2014, we sold to a certain accredited investor 5 units of our securities (the “Units”) at a purchase price of $10,000 per Unit, for aggregate gross proceeds of $50,000.  Each Unit consisted of (i) a promissory note in the principal amount of $10,000 (collectively the “Note”), and (ii) 100 shares of our preferred stock, $0.0001 par value per share (the “Preferred Stock”, and together with the Notes, the “Securities”), with each share of Preferred Stock convertible at any time prior to the 2^nd anniversary of their issuance date, in whole or in part, at the investor’s option, into 500 shares of our common stock without the payment of any additional consideration (the “Conversion Shares”).  As a result, we agreed to issue to the investor a Note in the principal amount of $50,000 and 500 shares of our Series A Preferred Stock (as described below).  The debt discount of $50,000 will be fully amortized to interest expense during the year ended December 31, 2014.  

The Note bears a 16.5% interest rate and matures 2 years from the date of issuance, provided that for each share of Preferred Stock that is converted by the investor pursuant to its terms, the outstanding principal amount of the Note shall be automatically reduced by an amount equal to (x) $100 for (y) each one (1) converted share of Preferred Stock.  The interest payable on the Note will accrue until the earlier of payment or conversion of the corresponding part of the shares of Preferred Stock and will be payable in cash, or at the discretion of the Investor, in shares of our common stock (the “Interest Shares”) at a conversion price of $0.20 per share (subject to adjustment as provided in the Note).  We may prepay at any time any portion of the principal amount of the Note.  The Note contains customary events of default upon the occurrence of which, subject to any cure period, the full principal amount of the Note, together with any other amounts owing in respect thereof, to the date of such event of default, shall become immediately due and payable without any action on the part of the Investor.  The Conversion Shares and the Interest Shares have piggyback registration rights.

Prior to the sale of the Preferred Stock to the investor, on November 26, 2013, we filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware.  Pursuant to the terms of the Certificate of Designation, among other things:

A copy of the Certificate of Designations, as filed with the Secretary of State of the State of Delaware, is incorporated by reference as an exhibit to the Annual Report.  The disclosure contained in this Note 5 does not purport to be a complete description of the Certificate of Designation and is qualified in its entirety by reference to the Certificate of Designation, which is incorporated herein by reference.

As a result of subsequent review of the transaction, we believe that no written agreement was formally executed between the parties for this financing and therefore, we intend to negotiate the terms of the financing with the investor.

Note 6.  Derivative Liability

As described in Note 7, Debt, Warrants and Preferred Stock Issuance of our Annual Report, we issued a total of 23,711,052 warrants on December 31, 2012.  Pursuant to ASC 815, the reset provision contained in the warrants qualifies the warrants for derivative accounting.  In addition, the derivative liability must be marked-to-market each reporting period and the change in its fair value will be recorded in our statement of income. On the date of the issuance, the fair value of the derivative liability was $474,203, which was calculated using the Black-Scholes model based upon the following assumptions: expected volatility of 419.44%, discount rate of 0.36%, expected term of three years and no dividends.

$427,450 of the fair value was attributable to warrants issued to Water Tech as additional consideration for the $310,000 note discussed above.  As the fair value of the warrants was higher than the face value of the note, a debt discount of $310,000 was recorded on the note with the additional $117,450 of fair value recorded as a loss on derivative liability during the year ended December 31, 2012.  The entire debt discount was amortized during the first quarter of 2013.  The remaining $46,753 of the fair value of the warrants was attributable to warrants issued to the Investor as additional consideration for the $50,000 note discussed above.  The fair value was recorded as a debt discount on the note and was fully amortized during the year ended December 31, 2012.

During the year ended December 31, 2013, Water Tech exercised 19,035,638 warrants on a cashless basis, which had a fair value of $1,332,360 on the date of exercise, and received 18,790,174 restricted shares of our common stock as a result. The fair value was extinguished to additional paid-in capital on our consolidated balance sheets. At June 30, 2014 and December 31, 2013, the total fair value of the remaining outstanding warrants was $275,367 and $163,299.  The total change in fair value, less the warrant exercise, was $112,068, which was recognized as a loss on our consolidated statements of operations.

We measure fair value in accordance with a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 Measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth our financial assets and liabilities measured at fair value by level within the fair value hierarchy as of December 31, 2013 and June 30, 2014, respectively. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The following table presents a roll-forward of the derivative liability measured at fair value by level within the fair value hierarchy as of December 31, 2013 and June 30, 2014, respectively.  Derivative liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

As described in Note 5. Debt and Preferred Stock Issuance, on February 8, 2014 we issued to a certain investor 500 shares of our Series A Preferred Stock as part of the sale of the Units.  Even though we identified conversion features embedded within Series A Preferred Stock, we have determined that the features associated with the embedded conversion option should not be accounted for at fair value as a derivative liability.

Note 7. Common Stock and Preferred Stock

Stock-Based Compensation

We periodically grant restricted equity or equity awards to our employees, directors and consultants.  We are required to make estimates of the fair value of the related instruments when granted and recognize expense over the period benefited, usually the vesting period. During the six months ended June 30, 2014, we did not issue any shares of our common stock for services.

Preferred Stock

As described above in Note 5. Debt and Preferred Stock Issuance, on February 8, 2014 we issued to a certain investor Units at a purchase price of $10,000 per Unit, for aggregate gross proceeds of $50,000.  Each Unit consisted of (i) a Note in the principal amount of $10,000 and (ii) 100 shares of our Series A Preferred Stock.  As a result, we issued to the investor a Note in the principal amount of $50,000 and 500 shares of our Series A Convertible Preferred Stock

A summary of our preferred stock issuances for the six months ended June 30, 2014 is set forth below:

On April 28, 2014 we entered into a Separation and Release of Claims Agreement with a former executive (the “Former Executive”). We agreed to issue the former executive up to 2,000,0000 warrants with and exercise price of $0.05 per share once certain performance criteria have been meet as described below.

As of June 30, 2014 we believe that it is unlikely that any of the milestones described above will be meet and accordingly, we have not recorded any expense for these warrants.

Note 8. Related Party Transactions and Debt Repayment

In the six months ended June 30, 2014 we repaid $152,500 of previously borrowed funds from related parties.  Please also see Note 5. Debt and Preferred Stock Issuance.

As of June 30, 2014, the balance of notes payable to related parties (due to current Interim CEO and to a former director), including advances, is $892,646.

Note 9. Subsequent Events

Subsequent to June 30, 2014, we borrowed an aggregate of approximately of $19,000.  The loans were not evidenced by promissory notes and the parties have yet to formalize the terms of the loans, such as the interest rate or maturity date. We are currently negotiating with the lender to formalize the terms of the loans.

On August 22, 2014, Ron Ulfers, Jr., a director of our Company, informed us of his intention to resign from the Board of Directors, effective immediately, as a result of him no longer being able to devote the level of commitment necessary to carry out his duties as a director of our Company.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) may contain certain “forward-looking statements” as such term is defined by the U.S. Securities and Exchange Commission (the “SEC”) in its rules, regulations and releases, which represent our expectations or beliefs, including, but not limited to, statements concerning our operations, economic performance, financial condition, growth and acquisition strategies, investments and future operational plans, such as those disclosed under the caption “Risk Factors” appearing in the section captioned “Risk Factors” of Green Energy Management Services Holdings, Inc.’s (which, together with Green Energy Management Services, Inc. (“GEM”), its consolidated subsidiary, is referred to herein as the “Company”, “we”, “us” or “our”) Annual Report on Form 10-K filed with the SEC on May 13, 2014 (our “Annual Report”).  For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements.  Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “might,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements.  These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation and any other factors discussed in our filings with the SEC.  Except as required by law, we undertake no responsibility or obligation to update publicly these forward-looking statements, but may do so in the future in written or oral statements.  Investors should take note of any future statements made by us or on our behalf.  This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section should be read in conjunction with our unaudited condensed consolidated financial statements, related notes, and other financial information appearing elsewhere in this Quarterly Report and our other filings with the SEC.

Company Overview

We are a full service energy management company based in New York, New York engaged in the business of Energy Efficiency products and system (as discussed below).  We currently use commissioned sales representatives to market our products and services.  Our two functional businesses are energy saving lighting products utilizing LED’s (Light Emitting Diodes) and the GEM Water Management System which utilizes water conservation technology (collectively, “Energy Efficiency”).  We have successfully deployed these savings measures at Co-Op City in the Bronx, New York, one of the world’s largest cooperative housing developments spread out among 15,000 residential units and 35 high rise buildings.  As we proceed with our Energy Efficiency business, we hope to enter into sales agreements with new customers in the 2014 fiscal year and secure additional business opportunities in the Energy Efficiency solutions market from existing partners, as well as progress with the Co-Op City project, subject to the availability of sufficient financial resources.  However, there can be no assurance that we will be able to enter into any such new agreements or that any such agreements will be on terms favorable to us.

We offer our clients all forms of solutions to maximize the level of Energy Efficiency which can be achieved given the current technologies available to us mainly based in two functional areas: (i) energy efficient lighting upgrades and (ii) water management system solutions (the “Water Management Technology”).  For the energy saving lighting products market, we provide energy efficient lighting units and services to end users who utilize substantial quantities of electricity.  Our energy managing products and services are primarily sold to municipal and commercial customers.   For the water conservation technology market, we provide our clients with water conservation solutions, primarily under long-term, fixed-price contracts, offering them water valve technology, which has the ability to reduce residential and commercial water usage.  We generally install all of our clean technology at our cost and our revenues are derived from the shared savings with the owner of the project.  We purchase products from outside suppliers and utilize outside contractors to complete customer projects.  Industry participants focus on assisting clients to effectively maximize Energy Efficiency.

In the Energy Efficiency arena, we concentrate our marketing efforts within geographic regions exhibiting higher than average per kilowatt hour utility rates and water utilization rates and having energy customers who consume higher than average quantities of energy and water.  We develop an Energy Efficiency/energy management program which, potentially, provides end-users alternatives to decrease their energy consumption.  Additionally, in many instances, we assume the management and maintenance of our clients’ lighting needs which affords our clients greater labor efficiencies.  Our water conservation solutions typically do not require further maintenance during the life of the contract.  Our technology reduces electricity usage by as much as 50% - 70% depending on the lighting replacement product, while the water management system can effectively reduce consumption and sewage by as much as 20%.  We generally install all of our clean technology at our cost and share the savings with the owner of the project.  The savings revenues vary from product to product but we generally expect to receive at least 50% of the savings.

Recent Developments – Operations

Our management changes were as follows: (i) effective as of May 24, 2014, Dr. Robert Thomson, a member of our Board of Directors, was appointed as our new Interim Chief Executive Officer to replace the vacancy created by the resignation of John Tabacco; (ii) effective as of May 30, 2014, Dr. Thomson was also appointed as our Acting Chief Financial Officer (and Principal Accounting Officer) and elected as our Chairman of the Board of Directors, to replace the vacancies created by the termination of David Selig and the resignation of Thomas Spinelli; and (iii) on August 22, 2014, Ron Ulfers, Jr., a director of our Company, resigned from the Board of Directors effective immediately, as a result of him no longer being able to devote the level of commitment necessary to carry out his duties as a director. Dr. Thomson is expected to be named to one or more additional committees of the Board. No new compensatory or severance arrangements were entered into in connection with these leadership changes.

On June 18, 2014, we issued a press release announcing that our Board of Directors was reviewing strategic business alternatives to improve shareholder value, along with certain management changes. While we are not abandoning the energy management sector, the progress with which revenue and earnings growth have occurred were deemed too slow by our Board of Directors. Subsequently, the Company’s Board of Directors reevaluated its options and now intends to continue with the prior energy management strategy, although with a narrower focus, and will make necessary management changes in the immediate future.

In connection with the management changes described above, in September 2014 we moved our principal executive office to 380 Lexington Ave, 17^th Floor, New York, New York 10168.

Recent Developments – Financings

In the first six months ended June 30, 2014 we borrowed an aggregate of approximately $50,000 from an unrelated third party to use as working capital and repaid $32,676 of previously borrowed funds from unrelated third parties. In the first six months ended June 30, 2014 we borrowed an aggregate of approximately $86,729 from a related party to use as working capital and repaid $152,500 of previously borrowed funds from related parties.  Subsequently, we borrowed an aggregate of approximately of $19,000.  The loans were not evidenced by promissory notes and the parties have yet to formalize the terms of the loans, such as the interest rate or maturity date. We are currently negotiating with the lender to formalize the terms of the loans.

Results of Operations

Three months ended June 30, 2014 as compared with the three months ended June 30, 2013

Revenue earned for the three and six months ended June 30, 2014 was $19,666 and $334,861, respectively, as compared to revenue earned of $565,320 and $632,136 for the three and six months ended June 30, 2013. The decrease in revenue of $545,654 for the three months ended June 30, 2014, as compared to the same period in 2013, was primarily due to reduced projects undertaken by us. The decrease in revenue of $297,275 for the six months ended June 30, 2014, as compared to the same period in 2013, was also primarily due to reduced projects undertaken by us.

Cost of revenue earned was $0 and $309,465, or 0% and 92.42%, respectively, of our revenue earned for the three and six months ended June 30, 2014, respectively, as compared to $397,685 and $367,685, or 68.87% and 62.91%, respectively, of our revenue earned for the three and six months ended June 30, 2013.  Cost of revenue earned in the first and second quarters of 2014 and 2013 was related to our Energy Efficiency and water management businesses, as well as recognition of all deferred project costs on the monetization of the amounts due to us at the time of buyout under the Riverbay water management agreement. Gross profit for the three and six months ended June 30, 2014 was $19,666 and $25,396, as compared to $175,990 and $234,451 for the three and six months ended June 30, 2013, respectively.  The decrease in gross profit in the three months ended June 30, 2014 is attributable to lower revenues earned during such period, offset by an increase in cost of revenues, as compared to the same period in 2013. The decrease in gross profit in the six months ended June 30, 2014 is attributable to lower revenues earned during such period, offset by an increase in cost of revenues, as compared to the same period in 2013. Cost of revenue for the 2013 periods included amortization of project costs and installation.

Selling, general and administrative expenses for the three and six months ended June 30, 2014 were $203,671 and $388,397, respectively, as compared to the selling, general and administrative expenses of $264,156 and $568,081 for the same periods in 2013.  The decrease of $60,485 for the three months ended June 30, 2014, as compared to the same period in 2013 is primarily attributable to a reduction in salaries and compensation expenses of $88,000 and a decrease of $74,980 in professional fees. The decrease of $179,684 for the six months ended June 30, 2014, as compared to the same period in 2013 is primarily attributable to a reduced professional fees of $178,518 and reduced salaries and compensation expenses of $88,000.

Our operating loss for the three and six months ended June 30, 2014 was $185,025 and $365,041, respectively, as compared to an operating loss of $89,185 and $335,669 for the three and six months ended June 30, 2013, respectively.  The increase in the operating loss for the three months ended June 30, 2014 is primarily attributable to significantly reduced revenue during the respective periods.

Interest expense, net, for the three and six months ended June 30, 2014 was $22,107 and $46,629, respectively, as compared to $10,631 and $342,443, for the same periods in 2013, respectively.  Interest expense, net, for the three months ended June 30, 2014 increased as a result of our increased borrowings. Interest expense, net, for the six months ended June 30, 2014 substantially decreased as a result of us borrowing less in the six month period ended June 30, 2014 as compared to the same period in 2013. In addition, interest expense, net, for the 2013 periods included interest awarded as part of an arbitration award to our former chief financial officer, in addition to the amortization of a $310,000 debt discount during the six months ended June 30, 2013.

Gain (loss) on derivative liability for the three and six months ended June 30, 2014 was $48,894 and $(112,068), respectively, as compared to $474,262 and $(1,185,474), respectively, for the same periods in 2013.  The decrease in gain (loss) on derivative liability of $425,768 and $1,073,406, respectively, is due to calculating the fair value of the derivative liabilities associated with the warrants issued as additional consideration to the notes payable to related parties, which warrants were partially exercised in the second quarter of 2013.  See Note 6 to our condensed consolidated financial statements included herein for further information.

We incurred a net (loss) of $(158,238) and $(515,689) for the three and six months ended June 30, 2014, respectively, as compared to a net income (loss) of $374,446 and $(1,863,586) for the three and six months ended June 30, 2013, respectively.  The substantial decrease in our net income and substantial increase in our net (loss) for the three and six months ended June 30, 2014, respectively, was attributable to the factors discussed above.  The net loss per share, basic and diluted, was $0.00 per share for the three months ended June 30, 2014, as compared to a net income of $0.01 per share for the three months ended June 30, 2013. The net loss per share, basic and diluted, was $0.01 per share for the six months ended June 30, 2014, as compared to a net loss of $0.04 per share for the six months ended June 30, 2013.

Liquidity and Capital Resources

As of June 30, 2014, we had a negative working capital of $4,517,967, as compared to a negative working capital of $4,305,962 at December 31, 2013.  The decrease in negative working capital is primarily due to the amounts spent on installation and project costs as noted above, a decrease in bridge loans from related parties of $152,500 as a result of repayments, and 37,676, offset by increases in the derivative liability of $112,068, as well as recognition in full of all deferred project costs of $247,646 on monetization of the Riverbay water management contract. We had $406 in cash at June 30, 2014, as compared to $15,102 at December 31, 2013.  The decrease in cash is attributable to the repayment of our debt, including debt held by related parties, and increased cost of revenue, offset by higher gross profit of the installations completed in the first quarter of 2014.

On February 8, 2014, we sold to a certain accredited investor 5 Units at a purchase price of $10,000 per Unit, for aggregate gross proceeds of $50,000.  As a result, we issued to the investor a Note in the principal amount of $50,000 and 500 shares of Series A Convertible Preferred Stock.  We used the net proceeds from the sale of the Units as general working capital. As a result of subsequent review of the transaction, we believe that no written agreement was formally executed between the parties for this financing and therefore, we intend to negotiate the terms of the financing with the investor.

In February 2014, Riverbay approved Change Order #2 to the water management agreement, pursuant to which we received a discounted buyout amount of $280,000 in lieu of the remaining amount of $355,000 due to date to us under the water management agreement and that the installed water valves used in the Project were now a property of Riverbay.  The payment was made to us in February 2014. As a result of the settlement of the contract, we recognized in full all deferred project costs associated with the contract, in the amount of $281,077.

In the first six months ended June 30, 2014 we borrowed an aggregate of approximately $50,000 from an unrelated third party to use as working capital and repaid $32,676 of previously borrowed funds from unrelated third parties. In the first six months ended June 30, 2014 we also borrowed an aggregate of approximately $86,729 from a related party to use as working capital and repaid $152,500 of previously borrowed funds from related parties.  Subsequent to June 30, 2014, we borrowed $19,000 from unrelated 3^rd parties.  These loans were not evidenced by promissory notes and the parties have yet to formalize the terms of the loans, such as the interest rate or maturity date. We are currently negotiating with the lender to formalize the terms of the loans.

As of September 5, 2014, we have cash of less than $500.  If and when we are able to secure additional funds, we will continue to install water valves and be eligible for shared savings with respect to future work that we expect to perform on the Project.  We believe that we will be able to sustain our current level of operations for approximately the next twelve months, if we are able to complete the remaining water valve installations under our water management agreement with Riverbay and are able to timely collect monthly payments from Riverbay due from the shared water savings.  However, these funds will be insufficient to fully implement our business plan and satisfy our current and prior outstanding obligations, including our expenses.  Accordingly and to fully execute our business plan and reach the planned amount of revenues, we will require additional capital to meet our financial commitments and to continue to execute our business plan, build our operations and become profitable. As a result, our auditors have issued a going concern opinion in conjunction with their audit of our December 31, 2013 consolidated financial statements.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying condensed consolidated financial statements, we generated a small amount of revenue in the first six months of 2014 and we have a working capital deficit of $4,517,967 as of June 30, 2014.  These factors raise substantial doubt about our ability to continue as a going concern.

Our ability to continue existence is dependent upon our continuing efforts to implement our new business strategy, management’s ability to achieve profitable operations and/or upon our ability to obtain additional financing to carry out our business plan.  We intend to fund our operations through equity and/or debt financing arrangements and any revenues generated in the future.  However, there can be no assurance that these arrangements, if any, will be sufficient to fund our ongoing capital expenditures, working capital, and other cash requirements.  The outcome of these matters cannot be predicted at this time.

The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

Recent Accounting Pronouncements

For the three months ended June 30, 2014, there were no accounting standards, pronouncements or interpretations issued by the FASB or the SEC that are expected to have a material impact on our financial position, operations or cash flows or present or future consolidated financial statements.

Summary of Significant Accounting Policies and Estimates

There are no material changes from the significant accounting policies or estimates set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our December 31, 2013 financial statements included in our Annual Report.  Please refer to our Annual Report for disclosures regarding the critical accounting policies related to our business.

Off-Balance Sheet Arrangements

None.

Not required for smaller reporting companies.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report.  Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of June 30, 2014, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and outsourced accounting professionals.

As discussed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2012, in the first quarter of 2012 we implemented certain measures to address the material weaknesses in our internal control over financial reporting and weaknesses related to our documentation and a lack of segregation of duties due to our limited size.  Such material weaknesses continue as of the date of this Quarterly Report.  If and when our financial position improves, we intend to hire additional personnel to further remedy former deficiencies.  As we progress with our business operations, and subject to receiving additional funding, we expect to increase our number of employees, which, we believe, will enable us to implement adequate segregation of duties within the internal control framework.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Our control systems are designed to provide such reasonable assurance of achieving their objectives.  Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.  These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control Over Financial Reporting

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer, of whether any change in our internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) occurred during the quarter ended June 30, 2014.  Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that there were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

The information set forth under “Note 3. Commitments and Contingencies — Legal Matters” contained in the “Notes to Unaudited Condensed Consolidated Financial Statements” of this Quarterly Report is incorporated by reference in response to this Item.

In addition to other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I. Item 1A, “Risk Factors,” in our Annual Report, which could materially affect our business, financial condition or results of operations.  Except as set forth below, there have been no material changes to our risk factors from those described in the Annual Report.

Risks Relating to Our Business

Because we have a limited operating history, have yet to attain profitable operations and will need additional financing to fund our businesses, there is substantial doubt about our ability to continue as a going concern, and our ultimate success may depend upon our ability to raise additional capital.

Our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2014 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  As of June 30, 2014, we had a working capital deficit of $4,517,967 and for the six months ended June 30, 2014, we incurred a net loss of $(515,689).   Notwithstanding us raising $50,000 in the first quarter of 2014, receiving in the first quarter of 2014 a discounted buyout amount of $280,000 in lieu of the remaining amount of $355,000 due to us at the time of the buyout under the water management agreement with respect to the installed water valves and borrowing approximately $26,000 from an unrelated third party in April and May 2014, due to the critical need of cash, we may not be able to execute our current business plan and fund business operations long enough to achieve profitability.  Our future is dependent upon our ability to obtain additional financing and upon the future success of our business.  The unaudited financial statements included in this Quarterly Report do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event we cannot continue in existence.  In addition, the report of our independent registered public accounting firm on our December 31, 2013 consolidated financial statements includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to recurring losses.

Our ability to continue as a going concern will be determined by our ability to achieve meaningful revenues and profitability and/or ability to obtain additional funding to cover our operating expenses.  We may be required to pursue sources of additional capital through various means, including joint venture projects and substantially dilutive debt or equity financings.  Future financings through equity investments are likely to be dilutive to existing stockholders.  Also, the terms of securities we may issue in future capital transactions may be substantially more favorable for our new investors.  Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, which may have additional dilutive effects.  Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs.  We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition and results of operations.  There can be no assurance that any additional financings will be available to us on satisfactory terms and conditions, if at all.  In addition, our ability to obtain needed financing may be impaired by such factors as the condition of the economy and capital markets, both generally and specifically in our industry, and the fact that we are not profitable and have no material revenues, which could impact the availability or cost of future financings.

As a consequence, our ability to continue as a going concern is dependent on a number of factors.  The outcome of these matters is dependent on factors outside of our control and cannot be predicted at this time.  If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.

Issuance of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

GEM continues to be in default under the terms of the unsecured promissory notes issued under the $500,000 Line of Credit Agreement entered into with a related-party lender.  As of June 30, 2011, GEM entered into the $500,000 Line of Credit Agreement pursuant to the LOC Agreement with a related party lender, pursuant to which the lender initially advanced to GEM $100,000, evidenced by a promissory note of the same amount dated as of equal date.  During the second quarter ended June 30, 2011, GEM borrowed the balance of $400,000 available under the LOC Agreement.  The note bears interest at a rate of 12% per year, with interest on the note paid monthly in arrears.  The repayment of the notes was due on March 31, 2012 and June 30, 2012, respectively. The notes were not extended and are currently in default. This balance was outstanding at June 30, 2014 and December 31, 2013.  As of June 30, 2014, the balance of notes payable to related parties, including advances, was $668,800.  Upon an event of default, the holder of the notes may require GEM to redeem all or a portion of the notes.  We intend to pay off the notes, including all accrued interest due thereon, as and when funding or revenues permit.

Not applicable.

On May 23, 2014, John Tabacco, our former Chief Executive Officer, President and member of the Board of Directors, resigned from all of his positions with us. Mr. Tabacco’s resignation was effective immediately. In connection with Mr. Tabacco’s resignation, we entered into the Separation and Release of Claims Agreement, dated as of April 28, 2014 (as amended, the “Separation Agreement”), which became effective as of the date of Mr. Tabacco’s resignation. The Separation Agreement contained certain customary representations, warranties and conditions, including without limitation, release of claims, confidentiality and non-disparagement terms. In addition, pursuant to the Settlement Agreement, effective as of May 23, 2014, Mr. Tabacco was to receive warrants to purchase 2,000,000 restricted shares of the Company’s common stock (the “Tabacco Warrants”), at an exercise price of $0.05 per share; provided that the Tabacco Warrants shall vest based on certain milestones as described in Exhibit B to the Settlement Agreement. All Tabacco Warrants will be in the customary standard form and as of the date of this Quarterly Report, none of the Tabacco Warrants have vested. The Tabacco Warrants will be deposited into escrow until they vest, if at all. As of June 30, 2014, we believe that it is unlikely that any of the vesting milestones described above will be meet and accordingly, we have not recorded any expense for these warrants.

In reviewing the agreements included as exhibits to this Quarterly Report, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about our Company or the other parties to the agreements.  The agreements may contain representations and warranties by each of the parties to the applicable agreement.  These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.  Additional information about our Company may be found elsewhere in this Quarterly Report and our other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

The following exhibits are included as part of this report:

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.

21

Exhibit 10.17 

SEPARATION AND RELEASE OF CLAIMS AGREEMENT

THIS SEPARATION AND RELEASE OF CLAIMS AGREEMENT (this “Agreement”) is dated as of April 28, 2014 (the “Execution Date”), by and between Green Energy Management Services Holdings, Inc., a Delaware corporation (the “Company”), on behalf of itself, its subsidiaries and other corporate affiliates and each of their respective employees, officers, directors, owners, shareholders and agents (collectively referred to herein as, the “Employer Group”), and John Tabacco (the “Executive”). The Company and the Executive are sometimes collectively referred to herein as the “Parties.”

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Company and the Executive hereby agree as follows:

1.           The Executive’s Separation. (a) The Executive’s employment with, and membership on the board of directors of, the Company will terminate effective as of the business day immediately following the date that the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 with the Securities and Exchange Commission (the “Separation Date”). After the Separation Date, the Executive will not represent himself as being an employee, officer or a director of the Company for any purpose. Except as otherwise set forth in this Agreement, the Separation Date will be the employment and directorship termination date for the Executive for all purposes, meaning the Executive will no longer be entitled to any further compensation, monies or other benefits from the Company, including coverage under any benefits plans or programs sponsored by the Company. The Executive hereby resigns, effective as of the Separation Date, all positions, titles, duties, authorities and responsibilities with, arising out of or relating to his employment with, or as a member of the board of directors of, the Company and any subsidiaries and affiliates and agrees to execute any and all additional documents and take such further steps as may be required to effectuate such resignation.

(b)         The Executive shall provide his resignation (attached hereto as Exhibit A) on the date hereof which shall become automatically effective as of 9:00am EST on the Separation Date (the “Effective Time”).

2.           Certain Consideration. The Executive acknowledges that he will receive through and including the Separation Date, less applicable withholdings, solely the Consideration set forth on Exhibit B attached hereto (the “Consideration”), in consideration for the Executive’s execution, non-revocation of, and compliance with this Agreement, including the Company Release (as defined below in Section 3(a)(i)). The Executive further acknowledges no entitlement to any additional payments, benefits or consideration not specifically referenced herein and shall receive no compensation, benefits or any other consideration for his service on the board of directors of the Company through and including the Separation Date.

3.           Release.

(a)         (i)         For and in consideration of the receipt of the Consideration and promises set forth in this Agreement, the Executive, for the Executive, the Executive’s marital community and children, the Executive’s heirs, beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors and assigns, hereby forever releases and discharges the Company and any of its divisions, affiliates, subsidiaries, parents, predecessors, successors, assigns, and, with respect to such entities, their officers, directors, managers, members, employees, agents, stockholders, administrators, general or limited partners, representatives, attorneys, insurers and fiduciaries, past, present and future (collectively, the “Company Released Parties”) from any and all claims of any kind arising out of, or related to, his employment and separation from employment with the Company, its affiliates and subsidiaries (collectively, with the Company, the “Affiliated Entities”), which the Executive now has or may have against the Company Released Parties, whether known or unknown to the Executive, and whether vicarious, derivative, or direct (the “Company Release”). Such released claims include, without limitation, any and all claims arising under federal, state or local laws pertaining to employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. 621 et seq. (“ADEA”), the Older Workers Benefit Protection Act, the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201 et seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et seq., the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et seq., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et seq., and any and all other federal, state or local laws regarding employment discrimination and/or federal, state, or local laws of any type or description regarding employment, including, but not limited to, any claims arising from or derivative of the Executive’s employment and separation from employment with the Affiliated Entities, as well as any and all such claims under state contract or tort law, and including any claim for attorneys’ fees. Notwithstanding anything else herein to the contrary, this Section 3(a)(i) shall not affect and does not release: (x) any claims that cannot be waived by applicable law or (y) rights to indemnification or liability insurance coverage the Executive may have under the Certification of Incorporation and the Bylaws of the Company, or applicable law.

(ii)         For and in consideration of the Executive signing this Agreement, the Company and for its Company Released Parties, hereby forever releases and discharges the Executive, the Executive’s marital community and his children, heirs, beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors and assigns, (collectively, the “Executive Released Parties” and together with the Company Release Parties, the “Release Parties”) from any and all claims of any kind arising out of, or related to, the Executive’s employment and separation from employment with the Company, its affiliates and subsidiaries, which the Company now has or may have against the Executive Released Parties, whether known or unknown to the Company, and whether vicarious, derivative, or direct (the “Executive Release” and together with the Company Release, the “Release”). Such released claims include, without limitation, any and all claims arising from or derivative of the Executive’s employment and separation from employment with the Affiliated Entities, as well as any and all such claims under state contract or tort law, and including any claim for attorneys’ fees. Notwithstanding anything else herein to the contrary, this Section 3(a)(ii) shall not affect and does not release: (x) any claims that cannot be waived by applicable law or (y) any claims resulting from any conduct of the Executive which constitutes fraud. The Company reserves its right to enforce this Agreement. 

(b)         Each of the Parties hereby represents that such Party has not filed or commenced any proceeding regarding the claims and matters discussed in Section 3(a).

(c)         For the purpose of implementing a full and complete release and discharge of the Released Parties, each Party expressly acknowledges that the Release is intended to include in its effect, without limitation, all claims or other matters described in Section 3(a) that such Party does not know or suspect to exist in its or his favor (as applicable) at the time of execution hereof or upon the termination of the Executive’s employment hereunder, and that the Release contemplates the extinguishment of any and all such claims or other such matters. The Released Parties who are not parties to this Agreement are third-party beneficiaries of the Release and are entitled to enforce its provisions.

(d)         The Executive warrants that no promise or inducement has been offered for the Company Release other than as set forth herein and that the Company Release is executed without reliance upon any other promises or representations, oral or written. Any modification of the Company Release must be made in writing and be signed by the Executive and the Company.

(e)          If any provision of the Release or compliance by the Executive or the Company with any provision of the Release constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is in violation of law, unenforceable or void, will be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law. If such modification is not possible, such provision, to the extent that it is in violation of law, unenforceable or void, will be deemed severable from the remaining provisions of the Release, which provisions will remain binding on both the Executive and the Company. The Release is governed by, and construed and interpreted in accordance with the laws of the State of New York, without regard to principles of conflicts of law. The Release represents the entire understanding of the Parties with respect to the subject matter herein, and no oral representations have been made or relied upon by the Parties.

(f)          The Executive acknowledges and agrees that he forever waives any right to recover, and will not request or accept, anything of value from any of the Company Released Parties as compensation or damages growing out of, resulting from, or connected in any way with his employment or the ending of his employment with the Company, the employment practices of the Company, or with any other act, conduct, or omission of any of the Company Released Parties, other than as specifically set out in this Agreement, whether sought directly by him or by any administrative agency or other public authority, individual, or group of individuals on his behalf.

4.           Further Promises, Undertakings, and Acknowledgements of the Executive.

(a)          Return of Company Property. As of the Separation Date, the Executive shall promptly return to David Selig, the Company’s Chief Financial Officer, on behalf of the Company, in good and working condition all property of the Company or any of the other Company Released Parties in his possession, custody, or control, including without limitation: (i) physical property, such as Company-provided equipment, computer and related equipment, credit card(s), key(s), or identification or access card(s) or badge(s); (ii) access codes or passwords to the Company’s information or security systems; and (iii) all Confidential Information (as defined below) and other physical or electronic documents concerning the business or operations of the Company or any of the other Company Released Parties.

(b)         Removal of Personal Property. The Executive acknowledges that he will have removed all of his personal property from the Company’s offices as of the Separation Date.

(c)          Confidentiality.

(i)         The Executive understands and acknowledges that during the course of his employment by the Company, he had access to and learned about confidential, secret and proprietary documents, materials and other information, in tangible and intangible form, of and relating to the Employer Group and its businesses and existing and prospective customers, suppliers, investors and other associated third parties (collectively, “Confidential Information”). The Executive further understands and acknowledges that this Confidential Information and the Company’s ability to reserve it for the exclusive knowledge and use of the Employer Group is of great competitive importance and commercial value to the Company, and that improper use or disclosure of the Confidential Information by the Executive might cause the Company to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, civil damages and criminal penalties.

(ii)        For purposes of this Agreement, the term “Confidential Information” includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to: business processes, practices, methods, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts, terms of agreements, transactions, potential transactions, negotiations, pending negotiations, know-how, trade secrets, computer programs, computer software, applications, operating systems, software design, web design, work-in-process, databases, manuals, records, articles, systems, material, sources of material, supplier information, vendor information, financial information, results, accounting information, accounting records, legal information, marketing information, advertising information, pricing information, credit information, design information, payroll information, staffing information, personnel information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, security procedures, graphics, drawings, sketches, market studies, sales information, revenue, costs, formulae, notes, communications, algorithms, product plans, designs, styles, models, ideas, audiovisual programs, inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results, specifications, customer information, customer lists, client information, client lists, manufacturing information, factory lists, distributor lists, and buyer lists of the Employer Group or its businesses or any existing or prospective customer, supplier, investor or other associated third party, or of any other person or entity that has entrusted information to the Company in confidence.

(iii)       The Executive understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used.

(iv)       The Executive understands and agrees that Confidential Information developed by him in the course of his employment by the Company is subject to the terms and conditions of this Agreement as if the Company furnished the same Confidential Information to the Executive in the first instance. Confidential Information shall not include information that is generally available to and known by the public at the time of disclosure to the Executive, provided that such disclosure is through no direct or indirect fault of the Executive or person(s) acting on the Executive’s behalf.

(v)        Disclosure and Use Restrictions. The Executive agrees and covenants: (A) to treat all Confidential Information as strictly confidential; (B) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any entity or person whatsoever; and (C) not to access or use any Confidential Information, and not to copy any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or other resources from the premises or control of the Employer Group, except as required in the performance of any of the Executive’s remaining authorized duties or with the prior consent of the company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent). Nothing herein shall be construed to prevent disclosure of Confidential Information (x) as may be required by applicable law or regulation, (y) pursuant to the valid order of a court of competent jurisdiction or an authorized government agency or (z) to the extent the Executive needs to disclose the Confidential Information in order to secure the opportunities for the Company discussed in Exhibit B attached hereto; provided that in the case of clause (x) and (y) the disclosure does not exceed the extent of disclosure required by such law, regulation or order; provided, further, that in the case of clause (z) only to the extent such disclosure is required by other parties to secure such opportunities. The Executive shall promptly provide written notice of any such required disclosure to the Company.

(vi)       Duration of Confidentiality Obligations. The Executive understands and acknowledges that his obligations under this Agreement with regard to any particular Confidential Information shall commence immediately and shall continue during and after his employment by the Company for ten (10) years from the Separation Date; provided, however, that the Executive’s obligations with respect to any trade secrets shall continue beyond ten (10) years for so long as such information remains a trade secret under applicable law.

(d)         Non-Disparagement.

(i)         The Executive agrees not to express any statements, written or verbal, or cause or encourage others to make any derogatory or damaging statements, written or verbal, that in any way interfere with their existing or prospective business relationships, or defame or disparage the personal or business reputation, practices or conduct of the Company, the Company Released Parties, the Affiliated Entities and any of their members, managers, directors, owners, employees, officers, family members, representatives and attorneys. Furthermore, the Executive will not represent himself as being an employee, officer, agent or representative or a director of the Company, its subsidiaries or product lines, for any purpose. The Executive understands and acknowledges that this Section 4(d) is a material inducement to the making of this Agreement and that he violates the terms of this Section 4(d), any unvested Warrants (as defined in Exhibit B) shall be immediately forfeited and the Company and the Employer Group will be entitled to pursue any other legal and equitable remedies, including without limitation, the right to recover damages (including but not limited to any amounts paid and/or owing under this Agreement) and to seek injunctive relief.

(ii)        This Section 4(e) does not, in any way, restrict or impede the Executive from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Executive shall promptly provide written notice of any such order to the company.

5.           Knowing and Voluntary Acknowledgement. The Executive specifically agrees and acknowledges that: (a) the Executive has read this Agreement in its entirety and understands all of its terms, including the Company Release; (b) the Executive has been advised of and has availed himself of his right to consult with his attorney prior to executing this Agreement; (c) the Executive knowingly, freely and voluntarily assents to all of its terms and conditions including, without limitation, the waiver, release and covenants contained herein; (d) the Executive is executing this Agreement, including the waiver and release, in exchange for good and valuable consideration in addition to anything of value to which he is otherwise entitled; (e) the Executive is not waiving or releasing rights or claims that may arise after his execution of this Agreement; and that (f) the Company Release in this Agreement is being requested in connection with the cessation of his employment and directorship with the Company.

6.           Restrictive Covenant Remedies. In the event of a breach or threatened breach by the Executive of any of the provisions of this Agreement, the Executive hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief. Furthermore, any breach of Sections 4(c) or 4(d) by the Executive, shall result in the immediate forfeiture of the Executive’s right, title and interest in and to all unvested Warrants.

7.           Non-Disparagement of the Executive. The Company agrees that, for a period of twenty-four (24) months from the Separation Date, it shall direct its executive officers and directors that, either on behalf of the Company or in their personal capacity, they will not make (a) any public statement that disparages or demeans the services, ability, business ethics or conduct of the Executive; or (b) any public comments or statements detrimental to the interests of the Executive other than in the course of lawful competition with the Executive or as otherwise permitted by law. This Section 7 does not, in any way, restrict or impede the Company or its executive officers and directors from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency; provided that such compliance does not exceed that required by the law, regulation, or order.

8.           Successors and Assigns.

(a)         Assignment by the Company. The Company may assign this Agreement to any subsidiary or corporate affiliate in the Employer Group or otherwise, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Employer Group and permitted successors and assigns.

(b)         No Assignment by the Executive. The Executive may not assign this Agreement or any part hereof. Any purported assignment by the Executive shall be null and void from the initial date of purported assignment.

9.           Governing Law; Jurisdiction; Venue; and Waiver of Jury Trial. This Agreement, for all purposes, shall be construed in accordance with the laws of the State of New York without regard to conflicts-of-law principles. Any action or proceeding by either of the Parties to enforce this Agreement shall be brought only in any state or federal court located in New Castle County, Delaware. The Parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue. The Parties irrevocably waive the right to trial by jury and agree not to ask for a jury in any such proceeding.

10.         Entire Agreement. Unless specifically provided herein, this Agreement, together with all of its exhibits, contains all the understandings and representations between the Executive and the Employer Group pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The Parties mutually agree that the Agreement, together with all of its exhibits, can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement.

11.         Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Executive and by a director of the Company designated by the board of directors of the Company as the authorized signatory for this Agreement. No waiver by either of the Parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the Parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

12.         Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the Parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement.

The Parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the Parties as embodied herein to the maximum extent permitted by law.

The Parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein.

13.         Confidentiality. Except as provided with respect to each party’s respective directors, officers, principals, advisors, financing sources, co-investors and other related representatives, as set forth herein or except as may be required by law, each Party will not directly or indirectly publish, disseminate or otherwise disclose, deliver or make available to any person, entity or other third party, without the prior written consent of the other Party, any of the following information (a) this Agreement, (b) any discussions between the Parties relating to Executive’s prior and/or future role with the Company and (c) any discussions between the Parties relating to the existence of the Agreement or its terms.

14.         Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.

15.         Counterparts. This Agreement may be executed in one or more counterparts (which may be delivered by electronic transmission or via pdf, with the same effect as an original counterpart), each of which shall be deemed an original, but which together shall constitute a fully executed Agreement.

16.         Tolling. Should the Executive violate any of the terms of the restrictive covenant obligations articulated herein, the obligation at issue will run from the first date on which the Executive ceases to be in violation of such obligation.

17.         Attorneys’ Fees. Should the Executive breach any of the terms of the restrictive covenants obligations referenced herein, to the extent authorized by state law, the Executive will be responsible for payment of all reasonable attorneys’ fees and costs that the Company incurred in the course of enforcing the terms of the Agreement, including demonstrating the existence of a breach and any other contract enforcement efforts.

18.         Acknowledgment of Full Understanding. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS AGREEMENT. THE EMPLOYEE FURTHER ACKNOWLEDGES THAT HIS SIGNATURE BELOW IS AN AGREEMENT TO RELEASE THE COMPANY FROM ANY AND ALL CLAIMS.

[Signature Page Follows] 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution Date.

Signature Page to the Separation and Release of Claims Agreement

EXHIBIT A

April 28, 2014

Green Energy Management Services Holdings, Inc.

450 7^th Ave, 39^th Floor

New York, NY 10123

Attention: Board of Directors

Dear Members of the Board of Directors:

I would like to notify you of my intent to resign effective as of the Effective Time (as defined in the Separation and Release of Claims Agreement, dated as of the date hereof, by and between the undersigned and Green Energy Management Services Holdings, Inc. (the “Company”)) from all my positions as an officer, employee and a director of the Company and its subsidiaries.

My resignation is not due to any disagreements as to any matter relating to the Company’s operations, policies or practices or otherwise, between the Company and me relative to this decision.

EXHIBIT B

In consideration for the Executive’s execution, non-revocation of, and compliance with the Agreement, including the Release, the Executive acknowledges that he will receive through and including the Separation Date, less applicable withholdings, solely the following consideration:

AMENDMENT NO. 1 TO THE SEPARATION AND RELEASE OF CLAIMS AGREEMENT, DATED AS

OF APRIL 28, 2014 (THE “AGREEMENT”)

This Amendment No. 1 (this “Amendment”) to the Separation and Release of Claims Agreement, dated as of April 28, 2014 (the “Agreement”), is entered into by and between Green Energy Management Services Holdings, Inc., a Delaware corporation (the “Company”), and John Tabacco (the “Executive”). Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meaning given to them in the Agreement.

NOW, THEREFORE, in consideration of the Parties continuing to have certain discussions related to the Company and its business and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

AMENDMENT NO. 2 TO THE SEPARATION AND RELEASE OF CLAIMS AGREEMENT, DATED AS

OF APRIL 28, 2014

This Amendment No. 2 (this “Amendment”) to the Separation and Release of Claims Agreement, dated as of April 28, 2014, as amended on May 13, 2014 (as amended, the “Agreement”), is entered into by and between Green Energy Management Services Holdings, Inc., a Delaware corporation (the “Company”), and John Tabacco (the “Executive”). Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meaning given to them in the Agreement.

NOW, THEREFORE, in consideration of the Parties continuing to have certain discussions related to the Company and its business and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

Exhibit 10.18

CONSULTING AGREEMENT

This Consulting Agreement (this “Agreement”) is made and entered into to be effective as of May 28, 2014 (the “Effective Date”), by and between Green Management Energy Services Holdings, Inc. (collectively with its affiliates, the “Company”), and John Tabacco (collectively with his affiliates, the “Consultant”).

WHEREAS:

NOW, THEREFORE, in consideration of the premises and promises, warranties and representations herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

1.    DUTIES. The Company hereby engages the Consultant and the Consultant hereby accepts engagement as a consultant. Consultant shall assist the Company in locating potential merger partners and/or developing corporate partnering relationships and perform such other duties and obligations as will be agreed to between the Company and the Consultant (collectively, the “Transactions”). The Consultant agrees to promptly perform all services required of the Consultant hereunder in an efficient, professional, trustworthy and businesslike manner. In such capacity, Consultant will utilize only materials, reports, financial information or other documentation that is approved in writing in advance by the Company.

2.    CONSULTING SERVICES & COMPENSATION. The Consultant shall be retained as a Consultant and independent contractor for the Company. For services rendered hereunder, the Consultant shall receive such form and payout of compensation as will be expressly agreed between the Company and the Consultant at a future date.

3.    EXPENSES. Each party shall be solely responsible for any and all of such party’s expenses incurred in connection with the preparation of, or performance under, this Agreement.

4.    CONFIDENTIALITY. Each party agrees that it is receiving the Confidential Information solely for the purpose of evaluating the Transactions and that it will not at any time during such evaluation or thereafter: (i) use any Confidential Information for any other purpose or (ii) discuss, disclose or otherwise transfer any Confidential Information to any person or entity, provided that each such Party shall be permitted to discuss, distribute or otherwise transfer such Confidential Information to its employees, agents, counsel, advisors, professional consultants and accountants (collectively, the “Representatives”) who, in each such case, have a specific need to know such Confidential Information, and who have been advised of the terms of this Agreement, and such party shall require them to be bound by terms substantially similar to those of this Agreement, prior to any disclosure of Confidential Information to any such persons, and such persons will use the Confidential Information solely for the purpose of evaluating the Potential Transactions. Each party may disclose Confidential Information of the other party to the extent required by law, subpoena or other legal process, regulatory authority or court order.

Any and all information about (or relating to) the existence and nature of the Potential Transactions, and any products, product plans, services, trade secrets and know-how, software, technology, business plans, creative designs and concepts, financial statements, projections, existing or proposed projects, suppliers, supplier lists, customers, customer lists, employees lists, markets, pricing, purchase records, sale records, identity of and dealings with clients, marketing, existing and future investments (direct and indirect), investment ideas, investment trading systems and models, algorithms, formulas, patterns and compilations of information, strategies, processes, methodologies or trade secrets, in each case, of any party or related to the Transactions, in whatever form, from whatever source and whenever such information is received by the other Party, shall be deemed confidential and shall be collectively referred to in this Agreement as “Confidential Information”. Notwithstanding the foregoing, the term “Confidential Information” shall not include information which: (a) was in a party’s possession prior to disclosure by the other party, (b) is independently developed by a party, (c) becomes publicly available without violation of this Agreement or by any fault of any party, (d) becomes lawfully available from a third party, or (e) is approved for disclosure by written authorization of a party.

5.    INDEPENDENT CONTRACTOR STATUS. Consultant understands that since the Consultant is not an employee of the Company, the Company will not withhold income taxes or pay any employee taxes on its behalf, nor will it receive any fringe benefits. The Consultant shall not have any authority to assume or create any obligations, express or implied, on behalf of the Company and shall have no authority to represent the Company as agent, employee or in any other capacity that as herein provided.

6.    TERMINATION. Either party may terminate this Agreement at anytime with or without cause by giving written notice to the other party.

7.    NO THIRD PARTY RIGHTS. The parties warrant and represent that they are authorized to enter into this Agreement and that no third parties, other than the parties hereto, have any interest in any of the services contemplated hereby.

8.    GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the law of the State of New York.

9.    ATTORNEY'S FEES. In the event of any controversy, claim or dispute between the parties hereto, arising out of or in any manner relating to this Agreement, including an attempt to rescind or set aside, the prevailing party in any action brought to settle such controversy, claim or dispute shall be entitled to recover reasonable attorney's fees and costs.

10.  ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties and cannot be altered or amended except by an amendment duly executed by all parties hereto. This Agreement shall be binding upon and inure to the benefit of the successors, assigns and personal representatives of the parties.

[Signature page follows]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution Date.

3

Exhibit 31.1

CERTIFICATION OF CEO PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Dr. Robert Thomson, certify that:

Exhibit 31.2

CERTIFICATION OF CFO PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Dr. Robert Thomson, certify that:

Exhibit 32.1

CERTIFICATION OF CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Green Energy Management Services Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dr. Robert Thomson, the Interim Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)      the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Exhibit 32.2

CERTIFICATION OF CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Green Energy Management Services Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dr. Robert Thomson, Acting Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)      the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.