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EX-32 - EXHIBIT 32 - Green Energy Management Services Holdings, Inc.ex32.htm
EX-31.1 - EXHIBIT 31.1 - Green Energy Management Services Holdings, Inc.ex31_1.htm


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________

Commission File Number: 000-33491

CDSS WIND DOWN INC.
(Exact name of registrant as specified in its charter)

DELAWARE
75-2873882
(state or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

2100 MCKINNEY AVE., SUITE 1500, DALLAS, TEXAS 75201
(Address of principal executive offices)
(214) 750-2452
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

Indicate by check mark whether the registrant 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).  Yes o No o

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of Class
Outstanding at August 9, 2010
 
 
Common Stock, Par value $.01 per share
96,305,617
 


 
 

 

CDSS WIND DOWN INC.
FORM 10-Q
QUARTERLY REPORT
FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 2010



As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “we,” “us,” “our,” “the Company” and “CDSS” refer to CDSS Wind Down Inc., a Delaware corporation and its consolidated subsidiaries.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent our current expectations, assumptions, estimates and projections about CDSS and include, but are not limited to, the following:

 
possible or assumed future results of operations;
 
future revenue and earnings;
 
business and growth strategies;
 
the uncertainty of general business and economic conditions; and
 
those described under Risk Factors.

Readers are urged to carefully review and consider the various disclosures we make which attempt to advise them of the factors which affect our business, including without limitation, the disclosures made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and under the caption “Risk Factors” included herein. These important factors could cause actual results to differ materially from the forward-looking statements contained herein.

Forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, as more fully described elsewhere in this report. For a detailed discussion of these risks and uncertainties, see the “Risk Factors” section in this Form 10-Q. We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as otherwise required pursuant to our on-going reporting obligations under the Securities Exchange Act of 1934, as amended.


PART I—FINANCIAL INFORMATION

CDSS WIND DOWN INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS

 
 
June 30,
2010
 
 
December 31,
2009
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
431
 
 
$
581
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
129,657
 
 
$
117,033
 
Sales tax liability
   
28,367
     
26,722
 
Convertible promissory note payable to officer including accrued interest payable of $10,320 at June 30, 2010 and $7,733 at December 31, 2009 and  net of deferred debt discount of $18,460 at June 30, 2010 and $60,358 at December 31, 2009
 
 
42,490
 
 
 
16,826
 
Payable to officer
 
 
92,230
 
 
 
56,907
 
Total  current liabilities
   
292,744
     
217,488
 
                 
Convertible preferred stock, $1,000 stated value per share;
1,000,000 shares authorized, no shares issued and outstanding at June 30, 2010 and December 31, 2009
 
 
-
     
-
 
Common stock, $.01 par value per share; 100,000,000 shares authorized; 96,305,617 and 34,305,617 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively
   
963,056
     
343,056
 
Additional paid-in capital
 
 
29,843,797
     
30,440,976
 
Accumulated deficit
   
(31,099,166
)
   
(31,004,939
)
Total stockholders’ deficit
 
 
(292,313
)
   
(216,907
)
Total liabilities and stockholders' deficit
 
$
431
 
 
$
581
 

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


CDSS WIND DOWN INC.
UNAUDITED CONSOLIDATED STATEMENTS OF EXPENSES

 
 
Three months ended
 June 30,
 
 
Six months ended
 June 30,
 
 
 
2010
 
 
2009
 
 
2010
 
 
2009
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General and administrative expense
 
$
17,154
   
$
30,734
   
$
48,097
   
$
35,166
 
Interest expense
 
 
33,669
     
2,486
     
46,130
     
4,395
 
Net loss
 
 $
(50,823
)
 
$
(33,220
)
 
$
(94,227
)
 
$
(39,561
)
                                 
Weighted average common shares outstanding - basic and diluted
   
76,547,375
 
   
34,305,617
     
55,543,186
     
34,305,617
 
                                 
Net loss per common share
  $
(0.00
)
  $
(0.00
)
  $
(0.00
)
  $
(0.00
)

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


CDSS WIND DOWN INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
 
Six months ended
 June 30,
 
 
 
2010
 
 
2009
 
Cash flows used in operating activities
 
 
 
 
 
 
Net loss
 
$
(94,227
)
 
$
(39,561
)
Adjustments to reconcile net loss to net cash used in operating activities
   
-
     
 
Amortization of beneficial conversion feature on note payable to officer debt recorded as interest expense
   
41,898
     
1,548
 
Change in operating liabilities:
               
Accounts payable and accrued expenses
   
16,856
     
3,867
 
Net cash used in operating activities
   
(35,473
)
   
(34,146
)
                 
                 
Net cash provided from financing activities:
               
Cash advances from CEO
   
35,323
     
34,877
 
Net change in cash
   
(150
)
   
731
 
Cash at the beginning of the period
   
581
     
 
Cash at the end of the period
 
$
431
   
$
731
 
                 
Non-cash items:
               
Conversion of note payable to CEO into shares of common stock
 
$
18,821
         

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


CDSS WIND DOWN INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2009

NOTE A - BASIS OF PRESENTATION

Interim Financial Statements and Basis of Presentation

These unaudited interim financial statements have been prepared on the historical cost basis in accordance with accounting principles generally accepted in the United States and in the opinion of management, reflect all adjustments (consisting of normal, recurring adjustments) necessary to present fairly, the financial position, results of operations and cash flows of CDSS Wind Down Inc. and its consolidated subsidiaries (collectively “CDSS” or the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to current year presentation.

Some information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to rules and regulations promulgated by the Securities and Exchange Commission (the “Commission”). The results of operations for the interim periods shown herein are not necessarily indicative of the results to be expected for any future interim period or for the entire year. These statements should be read together with the audited financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2009 on file with the Commission.

Going Concern

The Company has been and continues to be dependent upon outside financing to continue its existence and to fund alternatives being considered by the Board of Directors.  The Company will continue to require working capital to fund operating expenses, primarily accounting, legal and compliance reporting costs to maintain the shell company.  Therefore, there is substantial doubt about the Company's ability to continue as a going concern.  These financial statements do not include any adjustments that might arise from this uncertainty.

Net Loss Per Share

Basic net loss per common share is computed by dividing net loss to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the periods, including the assumed conversions of dilutive securities such as preferred stock, options, and warrants. For the three and six months ended June 30, 2010 and 2009, the number of shares assumed in the exercise of common stock options outstanding would be antidilutive and are therefore excluded from the computation of diluted loss per common share.
 
For the three and six months ended June 30, 2010 and 2009, the effect of stock options for 675,000 shares of common stock outstanding and the effects of issuing 166,788,200 shares of common stock upon the assumed conversion of a note payable to the Company's CEO have been excluded from the weighted average shares computation as the effect of the above securities would be antidilutive to the net loss per share during those periods.


NOTE B - PENDING MERGER TRANSACTION

On March 29, 2010, the Company and a wholly-owned subsidiary entered into a Merger Agreement (the "Merger Agreement") with Green Energy Management Services, Inc., a Delaware corporation ("GEM").,  Conditions to closing include that the Company will effect a 1 for 3 reverse split of the outstanding common stock, amend the certificate of incorporation to change the par value of the Company’s common stock to $0.0001 per shares and increase the number of authorized shares of common stock from 100,000,000 to 500,000,000.  These conditions have not been met at the time of this filing but the Company expects to complete the actions prior to closing.  In addition, the Company will issue approximately 352 million post-split shares (representing approximately 80% of the Company’s then outstanding shares) in exchange for all of the outstanding common stock of GEM, replace the Company’s officers and directors with those of GEM, and change the Company’s name to "Green Energy Management Services Holdings, Inc."  In addition, the Company must raise $1,250,000 prior to the closing of the transaction.  The transaction had not closed as of June 30, 2010 and the Merger Agreement was amended to extend the time for closing the merger to August 31, 2010.

The parties each made representations and warranties in the Merger Agreement, which is subject to closing conditions. The Merger Agreement contains termination rights for both parties, including a provision which would allow the board of directors of the Company to terminate the merger agreement in order to comply with its fiduciary duties. No assurance can be given that the conditions to closing the transactions contemplated by the Merger Agreement will be satisfied, or that the transactions contemplated by the Merger Agreement ultimately will be fully consummated.

NOTE C - RELATED PARTY TRANSACTIONS

On August 27, 2008, the Company and Steven B. Solomon, the Company’s Chief Executive Officer, President and Chairman of the Board of Directors, entered into a Convertible Promissory Note (the "Note").  The Note represents advances of approximately $69,451 by Mr. Solomon to the Company through the issue date of the Note.  The Note bears interest at eight percent (8%) per year and is payable on August 27, 2010 or upon demand by Mr. Solomon.

On April 30, 2010, Mr. Solomon exercised his right to convert $18,821 of outstanding principal under the Note into 62,000,000 shares of common stock.  Prior to this conversion, Mr. Solomon directly and indirectly owned 6,854,484 shares of the Company's outstanding common stock, and had the right to acquire an additional 228,788,200 shares of common stock on conversion of the Note.  Therefore, after this conversion at June 30, 2010, Mr. Solomon directly and indirectly owns a total of 68,854,484 shares of common stock, or 71.5% of the outstanding shares of common stock giving him control of the Company through the voting power over a majority of the shares of the outstanding common stock.  Assuming full conversion of the remaining principal amount of the Note into shares of common stock Mr. Solomon beneficially own 235,642,684 shares of common stock, or 89.6% of the then outstanding shares.

Accordingly, following the conversion, at June 30, 2010, the Company owed Mr. Solomon (i) $50,630, the remaining principal balance of the Note (before a discount of $18,460), (ii) $10,320 of accrued interest related to the Note, and (iii) $92,231 in the form of a payable for cash advances to the Company and for the payment of expenses on behalf of the Company.


The Company does not have a sufficient number of authorized shares of common stock available to permit the conversion of the Note in full. The Company has agreed to use its best efforts to obtain shareholder approval to (a) increase the number of authorized shares of common stock to a number sufficient to permit conversion, or (b) to effect a reverse stock split to reduce the number of currently outstanding shares of common stock to a number small enough to permit the conversion of the Note.

The conversion price of the Amended Note of approximately $0.0003 per share was below the fair value per share of the common stock at the date the note was issued resulting in  beneficial conversion feature, therefore the amount of discount assigned to the note was limited to the proceeds of $69,451.  The fair value of the beneficial conversion feature of $69,451 was credited to additional paid-in capital.  The discount is being amortized to interest expense over the two year term of the note using the interest method over the two year term of the note

The conversion feature was evaluated under ASC 815-15. Upon conversion of the remaining principal amount, 166,788,200 shares of common stock would be issued, which exceeds the number of authorized shares.  At June 30, 2010 Mr. Solomon owns 71.5% of the outstanding common stock and upon the full conversion of the Note, Mr. Solomon would own 89.6% of the outstanding common stock and controls the Company.  Based on the Mr. Solomon’s ability to authorize an increase in available shares without additional shareholder votes, no derivative liability was recognized.

The CEO is expected to continue to advance the Company additional funds should it be necessary for working capital and payment of expenses, on terms and conditions to be approved by the disinterested directors of the Company and the CEO.  Past funding needs of the business have been met by cash advances from the CEO, however there can be no assurance that such funds will continue to be available from the CEO or other related parties in the future. The Company has been and continues to be dependent upon outside sources of cash to pay expenses.

NOTE D – SUBSEQUENT EVENTS

On July 29, 2010, we entered into a subscription agreement with one accredited investor pursuant to which the Company sold 2,000,000 shares of our common stock (on a pro forma post-one-for-three reverse split basis) for a purchase price of $100,000.

On July 29, 2010, we entered into subscription agreements with accredited investors pursuant to which the Company sold convertible promissory notes for proceeds of $400,000.  The promissory notes are payable in 2011, do not accrue interest, and are convertible into shares of our common stock at our option or at the option of the holder at five cents per share, based on a post-one for three reverse stock split basis.  The subscription agreements contain registration rights and anti-dilution provisions.

On July 29, 2010, we entered into a promissory note with Green Energy Management Services, Inc. (“GEM”).  Pursuant to the note, we loaned $500,000 to GEM.  The note is due and payable on December 31, 2010, and bears interest at 6% per year.


ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussions should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2009. Our year ends on December 31, and each of our quarters end on the final day of a calendar quarter (March 31, June 30, and September 30). The following discussions contain forward-looking statements. Please see Cautionary Statement Regarding Forward-Looking Statements and Risk Factors for a discussion of uncertainties, risks and assumptions associated with these statements.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
Historical results and trends should not be taken as indicative of future operations. Our statements contained in this report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, of the Exchange Act. Actual results may differ materially from those included in the forward-looking statements. We intend these forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements, which are based on our assumptions and describe future plans, strategies and expectations for ourselves, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “prospects,” or similar expressions. Our ability to predict results or the actual effect of our future plans or strategies is inherently uncertain.
 
Factors which could have a material adverse affect on our operations and our future prospects on a consolidated basis include, without limitation, the following:

 
possible or assumed future results of operations;
 
future revenue and earnings;
 
business and growth strategies;
 
the uncertainty of general business and economic conditions; and
 
those described under Risk Factors.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.


RESULTS OF OPERATIONS FOR THREE AND SIX MONTHS ENDED JUNE 30, 2010 and 2009

During the three and six months ended June 30, 2010 and 2009 we had no operations and no employees.  Our primary expenses consisted of professional fees, records storage fees and fees associated with public company reporting compliance.

Operating expenses during the three months ended June 30, 2010 were $17,154 versus $30,734 during the three months ended June 30, 2009.  The decrease of $13,580 was a result of lower professional fees.

Operating expenses during the six months ended June 30, 2010 were $48,097 versus $35,166 during the six months ended June 30, 2009.  The increase of $12,931 was a result of higher professional fees.

Interest expense for the three months ended June 30, 2010 was $33,669 related to the note payable to the CEO, including debt discount amortization of $31,330 versus $2,486 of interest expense for the three months ended June 30, 2009 including debt discount amortization of $1,048.

Interest expense for the six months ended June 30, 2010 was $46,130 related to the note payable to the CEO, including debt discount amortization of $41,898 versus interest expense of $4,395 for the six months ended June 30, 2009 including debt discount amortization of $1,548.
 
Liquidity and Capital Resources

Our cash position at June 30, 2010 is $431 and we had outstanding liabilities to unrelated third parties of $158,024. a note payable plus interest to our CEO of $60,950,(before not discount of $18,460) and advances payable to our CEO aggregating $92,230 at June 30, 2010.  There are no operations from which cash flows may be generated.  Our CEO provided cash advances to us or paid expenses on our behalf of approximately $35,323 during the six months ended June 30, 2010.  If available cash is not adequate to meet our obligations, liabilities, operating costs and claims, we expect that our CEO would advance us additional funds should it be necessary for working capital purposes, on terms and conditions to be approved by the disinterested directors of the Company and the CEO.  Past funding needs of the business have been met by cash advances from the CEO, however there can be no assurance that such funds will be available from the CEO or other related parties in the future or on terms acceptable to us.  We have been and continue to be dependent upon outside sources of cash to pay operating expenses.


Pending Merger

On March 29, 2010, the Company and a wholly-owned subsidiary entered into a Merger Agreement (the "Merger Agreement") with Green Energy Management Services, Inc., a Delaware corporation ("GEM"). Conditions to closing include that the Company will effect a 1 for 3 reverse split of the outstanding common stock, amend the certificate of incorporation to increase the number of authorized shares of common stock from 100,000,000 to 500,000,000, issue approximately 352 million post-split shares (representing 80% of the Company’s outstanding shares) in exchange for all of the outstanding common stock of GEM, replace the Company’s officers and directors with those of GEM, and change the Company’s name to "Green Energy Management Services Holdings, Inc."  In addition, the Company must raise $1,250,000 prior to the closing of the transaction. The transaction had not closed as of June 30, 2010 and the Merger Agreement was amended to extend the time for closing the merger to August 31, 2010.

The parties each made representations and warranties in the Merger Agreement, which is subject to closing conditions. The Merger Agreement contains termination rights for both parties, including a provision which would allow the board of directors of the Company to terminate the merger agreement in order to comply with its fiduciary duties. No assurance can be given that the conditions to closing the transactions contemplated by the Merger Agreement will be satisfied, or that the transactions contemplated by the Merger Agreement ultimately will be fully consummated.


ITEM 4T. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

The Company's management, including the Company's principal executive officer/principal financial officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13(a) - 15(e) and 15(d) - 15(e) under the Securities Exchange Act of 1934) as of June 30, 2010. Based upon that evaluation, the Company's principal executive officer/principal financial officer have concluded that the disclosure controls and procedures were not effective, because certain deficiencies involving internal controls constituted a material weakness as discussed in our Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission.  The material weakness identified did not result in the restatement of any previously reported financial statements or any other related financial disclosure, nor does management believe that it had any effect on the accuracy of the Company’s financial statements for the current reporting period.  The material weakness in our internal control over financial reporting that we identified in our Annual Report on Form 10-K for the year ended December 31, 2009 relates to our documentation and a lack of segregation of duties due to our limited size.

There were no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Inherent Limitation on the Effectiveness of Internal Controls

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.


PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk.  Any of the following risks could materially adversely affect our business, operating results and financial condition and could result in a complete loss of your investment.

In addition to the other information in this Report, the following risk factors should be considered carefully in evaluating the Company and its business.  This disclosure is for the purpose of qualifying for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  It contains factors that could cause results to differ materially from such forward-looking statements.  These factors are in addition to any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statement.

The following matters, among other things, may have a material adverse effect on the business, financial condition, liquidity, or results of operations of the Company.  Reference to these factors in the context of a forward-looking statement or statements shall be deemed to be a statement that any one or more of the following factors may cause actual results to differ materially from those in such forward-looking statement or statements.  Before you invest in our common stock, you should be aware of various risks, including those described below.  Investing in our common stock involves a high degree of risk. You should carefully consider these risk factors, together with all of the other information included in this Report, before you decide whether to purchase shares of our common stock. Our business and results of operations could be seriously harmed by any of the following risks. The trading price of our common stock could decline due to any of these risks, and you may lose part or all of your investment.

WE HAVE A HISTORY OF NET LOSSES AND WILL NEED ADDITIONAL FINANCING TO CONTINUE AS A GOING CONCERN.

We have no revenues or earnings from operations, and there is a risk that we will be unable to continue as a going concern and consummate a business combination or other similar transaction.  We have no significant assets or financial resources.  We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a merger or other business combination.  This may result in our incurring a net operating loss that will increase unless we consummate a business combination with a profitable business.  We cannot assure you that we can identify a suitable business opportunity and consummate a business combination, or that any such business will be profitable at the time of its acquisition by us or ever.

Historically, we have incurred recurring operating losses and have a stockholders' deficit at June 30, 2010 of approximately $292,313. We had a cash balance of $431 at June 30, 2010 and current liabilities of approximately $292,744. We expect that we will incur losses at least until we complete a business combination and perhaps after such a combination as well. There can be no assurances that we will ever be profitable. We have limited access to capital, no plans to raise capital and no third party sources of capital at June 30, 2010. Our past funding needs of the business have been provided by financings through cash advances received from and notes payable issued to our Chief Executive Officer. There can be no assurance that such funds will be available from this related party in the future. Without additional funds there is an uncertainty as to whether we can continue as a going concern.

 
OUR CEO BENEFIOCIALLY OWNS A MAJORITY OF OUR VOTING SHARES.

On August 27, 2008, we and Steven B. Solomon, our Chief Executive Officer, President and Chairman of the Board of Directors, entered into a Convertible Promissory Note (the "Note"). The Note represents advances of approximately $69,451 made by Mr. Solomon to us through the issue date of the Note.  The Note bears interest at eight percent (8%) per year and is payable on August 27, 2010 or upon demand by Mr. Solomon.

On April 30, 2010, Mr. Solomon exercised his right to convert $18,821 of the outstanding principal under the Note in exchange for 62 million shares of common stock.  Prior to this conversion, Mr. Solomon beneficially owned 6,854,484 shares of the Company's outstanding common stock, and had the right to acquire an additional 228,788,200 shares of common stock on conversion of the Note.  Therefore, after this conversion at June 30, 2010, Mr. Solomon directly owns a total of 68,854,484 shares of common stock, or 71.5% of the outstanding shares of common stock giving him potential control of the Company through the voting power over a majority of the shares of outstanding common stock.  Mr. Solomon continues to beneficially own 235,642,684 shares of our common stock, or 89.6% of the then outstanding shares assuming full conversion of the Note.

WE HAVE NO OPERATIONS AND NO ASSURANCES OF BEGINNING OPERATIONS OR THAT WE WILL BE SUCCESSFUL IN IDENTIFYING OR ACQUIRING A BUSINESS

At a Special Meeting of Stockholders held on December 1, 2006, our stockholders approved a plan of liquidation and dissolution (the "Plan of Dissolution"), previously approved by our board of directors on October 13, 2006. In connection with the closing of the Asset Sale on December 4, 2006, our business and operations were effectively transferred to McAfee pursuant to the Asset Purchase Agreement, and we no longer have any significant operating assets or contracts.  Our current activities are limited to preparing and filing ongoing tax returns; complying with our Securities and Exchange Commission reporting requirements; and records storage.

All known liabilities associated our prior operations were settled and all distributions to shareholders were made.  On November 16, 2009 the Board of Directors terminated the Plan of Dissolution.  Having discussed alternatives to liquidating or dissolving the Company, the Board of Directors determined to terminate the Plan of Dissolution and to consider alternatives including the potential for commencing a development stage company or the potential for acquiring an operating company in a merger or asset purchase transaction.


On March 29, 2010, the Company and a wholly-owned subsidiary entered into a Merger Agreement with GEM.  Pursuant to the Merger Agreement, the Company will effect a 1 for 3 reverse split of the outstanding common stock, amend the certificate of incorporation to increase the number of authorized shares of common stock from 100,000,000 to 500,000,000, issue approximately 352 million post-split shares (representing approximately 80% of the Company’s outstanding shares) in exchange for all of the outstanding common stock of GEM, replace the Company’s officers and directors with those of GEM, and change the Company’s name to "Green Energy Management Services Holdings, Inc."  However there can be no assurance that this transaction will close or that if closed will be successful.

OUR STOCK IS TRADED IN THE OVER THE COUNTER MARKET.

Our common stock trades on the OTC Bulletin Board.  The OTC Bulletin Board is generally considered to be a less efficient market, and our stock price, as well as the liquidity of our common stock, may be adversely impacted as a result. The OTC Bulletin Board requires that listed companies remain current in their filings with the Securities and Exchange Commission.  If we are unable to remain current in our SEC filings, due to lack of funds or personnel or otherwise, we could be delisted from the OTC Bulletin Board, and our stock would trade, if at all, on the pink sheets.

OUR STOCK PRICE IS SUBJECT TO SIGNIFICANT FLUCTUATIONS AND VOLATILITY.

Due to the factors noted in this Report and other factors, our stock price has been and may continue to be subject to significant volatility.  We have experienced no revenue or earnings which have had an immediate and significant adverse effect on the trading price of our common stock.  This may occur again in the future.

IF WE LOSE THE SERVICES OF ANY OF OUR KEY PERSONNEL, INCLUDING OUR CHIEF EXECUTIVE OFFICER OR OUR DIRECTORS, OUR BUSINESS MAY SUFFER.

We are dependent on our key officers, including Steven B. Solomon, our Chairman and Chief Executive Officer and our directors. Our business could be negatively impacted if we were to lose the services of one or more of these persons.  In addition, the loss of our CEO would eliminate our only source of funds to maintain compliance reporting requirements.

WE MAY BE ADVERSELY AFFECTED BY EVENTS IN THE CAPITAL AND CREDIT MARKETS.

Changes in consumer and business confidence and spending, together with severe reductions in the availability and cost of credit and volatility in the capital and credit markets, have adversely affected business and economic environments. Any proposed acquisition is exposed to risks associated with the creditworthiness of suppliers, customers and business partners. In particular, we may be exposed to risks associated with the ongoing decline of the markets. These conditions have resulting in financial instability or other adverse effects at many prospective business partners. Any of these events may adversely affect our cash flow, profitability and financial condition.


Moreover, the current worldwide financial crisis has reduced the availability of liquidity and credit to fund or support the continuation and expansion of business operations worldwide. Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers. Continued disruption of the credit markets has affected and could continue to adversely affect our ability to access credit from any proposed business combination.

WE MAY BE SUBJECT TO FINAL EXAMINATIONS BY TAXING AUTHORITIES ACROSS VARIOUS JURISDICTIONS WHICH MAY IMPACT THE AMOUNT OF TAXES THAT WE PAY

In evaluating the exposure associated with various tax filing positions, we accrue charges for probable exposures.  At June 30, 2010 we believe we have no probable exposures. To the extent we were not to prevail in matters for which accruals would have been established or be required to pay amounts in excess of any such accruals, our effective tax rate in a given financial statement period could be materially affected. Significant judgment is required in determining our provision for income taxes. In the ordinary course of business, there are many transactions for which the ultimate tax outcome is uncertain. Our reported results may be subject to final examination by taxing authorities. Because many transactions are subject to varying interpretations of the applicable federal, state or foreign tax laws, our reported tax liabilities and taxes may be subject to change at a later date upon final determination by the taxing authorities. The impact of this final determination on our estimated tax obligations could increase or decrease amounts of cash available to us, perhaps significantly.

OUR ASSUMPTIONS REGARDING THE FEDERAL TAX CONSEQUENCES OF THE ASSET SALE MAY BE INACCURATE.

The sale of substantially all of the Company’s assets in December 2006 was a taxable transaction to us for United States federal income tax purposes and we recognized a gain on the asset sale.  The gain recognized for tax purposes was completely offset by available net operating loss carryforwards.  Approximately $894,000 of federal Alternative Minimum Tax (“AMT”) as a result of limitations on the use of net operating losses under AMT rules was paid during the first quarter of 2007.  We do not believe, that there will be any further material tax payable by us relating to this gain or the asset sale.  In addition, we believe we have sufficient usable net operating losses to offset substantially all of the income or gain recognized by us for “regular” federal income tax purposes as a result of the asset sale (i.e., other than adjustments to the AMT).  However, there can be no assurance that the Internal Revenue Service or relevant state tax authorities will ultimately assent to our tax treatment of the asset sale or the utilization of the available net operating losses.  To the extent the Internal Revenue Service or any relevant state tax authorities ultimately prevail in re-characterizing the tax treatment of the asset sale or the net operating losses, there may be adverse tax consequences to us and our stockholders, including that we could owe income taxes on up to the entire purchase price and our common stockholders could be required to return any distributions they have received.


OUR ASSUMPTION THAT WE WILL NOT HAVE TO PAY TEXAS FRANCHISE TAX AS A RESULT OF THE CLOSING OF THE ASSET PURCHASE AGREEMENT MAY BE INACCURATE.

We do not believe we will be obligated to pay any Texas franchise tax as a result of the closing of the Asset Sale. Beneficial ownership of all of our assets was held by our subsidiary Canberra Operating, L.P., a Texas limited partnership, and Texas franchise tax did not apply to dispositions of assets by limited partnerships. To confirm our position, following the closing we applied to the Texas Comptroller of Public Accounts for a statement that no franchise or sales tax was due as a result of the closing of the Asset Purchase Agreement. If the Texas Comptroller challenges our position, we could be required to pay the Texas franchise tax, our stockholders could be required to return any distributions they have received.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On April 30, 2010, Mr. Steven B. Solomon, our CEO, exercised his right to convert $18,821 (a conversion price of approximately $0.0003 per share) of the outstanding principal of $69,451 under a convertible promissory note into for 62,000,000 unregistered shares of common stock.  Mr. Solomon retains the right to convert the remaining principal balance of the convertible promissory note into 166,788,200 shares of common stock.  The exercise of the conversion right provided no cash proceeds to the Company.

ITEM 6. EXHIBITS

EXHIBIT NUMBER
 
DESCRIPTION
 
 
 
 
Certification of Principal Executive Officer/Principal Financial Officer, filed herewith.
 
 
 
 
Certification of Chief Executive Officer/Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.



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.

Date: August 10, 2010
CDSS WIND DOWN INC.
 
 
 
 
By:/s/ STEVEN B. SOLOMON
 
 
Steven B. Solomon, President and Chief Executive Officer
 
 
(Duly Authorized Signatory and Principal Executive Officer and Acting Principal Accounting and Financial Officer)
 
 
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