UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September 30, 2011~~March 31, 2012

¨	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: 333-124704

ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Delaware		32-0294481
(State or other jurisdiction of incorporation		(I.R.S. Employer
or organization)		Identification No.)

Four Tower Bridge

200 Barr Harbor Drive, Ste. 400

West Conshohocken, PA 19428

(Address of Principal executive offices)

Issuer’s telephone number: (866) 629-7646

Securities registered under Section 12(b) of the “Exchange Act”

Common Share, Par Value, $.0001

(Title of each Class)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 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 ¨ 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.

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

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

Number of shares of Environmental Infrastructure Holdings Corp.. Common Stock, $.001 par value, outstanding as of ~~November 14, 2011: 107,607,817~~May 21, 2012: 1,581,569

Number of shares of Environmental Infrastructure Holdings Corp.. Preferred Stock, $.001 par value, outstanding as of ~~November 14, 2011:~~May 21, 2012: 4,007,633

~~Table of Contents~~

~~ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.~~

~~Form 10-Q~~

~~Table~~ of ~~Contents~~

		~~Page~~

~~PART I.~~	~~FINANCIAL INFORMATION~~

~~Item 1~~	~~Financial Statements:~~	3
	~~Consolidated Balance Sheets~~	3
	~~Consolidated Statements of Operations~~	4
	~~Consolidated Statements of Stockholders’ Deficit~~	5
	~~Consolidated Statements of Cash Flows~~	6
	~~Notes to Consolidated Financial Statements~~	7

~~Item 2~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~	29

~~Item 4~~	~~Controls and Procedures~~	31
~~Item 4T~~	~~Controls and Procedures~~	31

~~PART II.~~	~~OTHER INFORMATION~~

~~Item 1~~	~~Legal Proceedings~~	32
~~Item 1A~~	~~Risk Factors~~	32
~~Item 2~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	33
~~Item 6~~	~~Exhibits~~	33

~~SIGNATURES~~		34

Table of Contents

ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.

Form 10-Q

Table of Contents

		Page

PART I.	FINANCIAL INFORMATION

Item 1	Financial Statements:	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Stockholders’ Deficit	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 4	Controls and Procedures	29
Item 4T	Controls and Procedures	29

PART II.	OTHER INFORMATION

Item 1	Legal Proceedings	30
Item 1A	Risk Factors	30
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6	Exhibits	31

SIGNATURES		32

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1 – Financial Statements ~~(unaudited)~~(unaudited and unreviewed)

Environmental Infrastructure Holdings Corp.

Consolidated Balance Sheets

As of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010~~2011

(Unaudited and unreviewed)

	September 30, 2011			December 31, 2010			March 31, 2012			December 31, 2011
ASSETS	(unaudited)						(unaudited and unreviewed)
Current Assets
Cash and cash equivalents	$	20,284		$	18,323		$	1,923		$	61,177
Accounts receivable, net of allowance for doubtful accounts of $205,000 and $205,000, respectively		83,870			481,337			84,355			185,844
Inventory		71,071			94,841			28,570			25,000
Prepaid expenses and other current assets		-			-			7,500			-
Total Current Assets		175,225			594,501			122,348			272,021

Property and equipment, net of accumulated depreciation and amortization		821			8,099			548			685

Intangible assets, net of accumulated amortization and impairment allowances		270,964			275,464			30,500			32,000

Assets of discontinued operation held for sale		38,578			40,587

Total Assets	$	485,589		$	918,651		$	153,396		$	304,706

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Current portion of debt	$	520,601		$	376,612		$	512,753		$	470,956
Current portion of secured promissory note payable to related party		98,202			107,202			95,452			98,201
Accounts payable		444,464			626,616			490,179			574,181
Accrued expenses		64,136			70,121			144,133			130,352
Accrued compensation		532,703			417,358			736,034			625,454
Accrued interest		152,229			130,844			211,092			179,902
Total Current Liabilities		1,812,335			1,728,753			2,189,643			2,079,046

Long term portion of debt		218,008			199,941			218,008			218,008
Long term portion of secured promissory note payable to a related party		300,000			300,000			300,000			300,000
Liabilities of discontinued operation held for sale		2,589,644			3,584,296
Total Liabilities		4,919,987			5,812,990			2,707,651			2,597,054

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, $.0001 par value; authorized 25,000,000 shares, none issued		-			-
Common stock, $.0001 par value; authorized 125,000,000 shares: issued and outstanding 100,410,432 and 48,509,795 shares respectively)		10,042			4,851
Committed to be issued 3,134,152 and 25,369,235 shares respectively		313			2,537
Preferred stock, $.0001 par value; authorized 25,000,000 shares, 6,948,810 issued								695			695
Common stock, $.0001 par value; authorized 125,000,000 shares: issued and outstanding 1,581,569 and 538,039 shares respectively)								115			54
Committed to be issued 3,134,152 and 0 shares respectively								7			7
Additional paid in capital		8,079,962			6,130,010			7,348,593			7,290,711
Deficit		(12,524,715	)		(11,031,737	)		(9,903,664	)		(9,583,814	)
Total Stockholders' Deficit		(4,434,398	)		(4,894,339	)		(2,554,255	)		(2,292,348	)

Total Liabilities and Stockholder's Deficit	$	485,589		$	918,651		$	153,396		$	304,706

See accompanying notes to consolidated financial statements.

Table of Contents

Environmental Infrastructure Holdings Corp.

Consolidated Statements of Operations

For the Three ~~and Nine~~ Months Ended ~~Sept 30,~~March 31,

(Unaudited and unreviewed)

Three Months Ended Nine Months Ended
September 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010

Revenues $ 315,645 $ 729,325 $ 1,290,173 $ 2,305,281

Cost of Revenues 184,103 378,038 673,663 1,133,924

Gross Profit 131,542 351,287 616,510 1,171,357

Operating Expenses
Selling, general and administrative expenses 643,013 359,413 1,642,016 1,434,603
Marketing costs associated with future product development and sales incurred on acquisition of Tower Turbines, Inc. (Note 9) - - 150,000 -
Operating Loss (511,471 ) (8,126 ) (1,175,506 ) (263,246 )

Other (Expense) Income
Interest Expense (47,107 ) (14,028 ) (85,339 ) (40,445 )
Interest Income - - 1 154
Gain on settlement of former employee compensation liability based on terms of Mutual Termination and Release Agreement
- - 17,600 -
Excess of the fair market value of the shares over debt settled (94,500 ) - (94,500 ) -
Total Other (Expense) Income (141,607 ) (14,028 ) (162,238 ) (40,291 )

Loss from Continuing Operations before Income Tax Provision (653,078 ) (22,154 ) (1,337,744 ) (303,537 )

Income tax provision - - - -

Loss from Continuing Operations (653,078 ) (22,154 ) (1,337,744 ) (303,537 )
Loss from Discontinued Operations, net of income tax - (226,149 ) (155,234 ) (800,984 )

Net Loss $ (653,078 ) $ (248,303 ) $ (1,492,978 ) $ (1,104,521 )

Loss per common share, basic and diluted:
Loss from continuing operations $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.02 )
Loss from discontinued operations (0.00 ) (0.00 ) (0.00 ) (0.02 )
Net Loss $ (0.01 ) $ (0.02 ) $ (0.02 ) $ (0.03 )

Weighted average number of common shares outstanding, basic and diluted 90,858,373 46,946,195 85,008,858 44,635,673

	Three Months Ended
	2012			2011

Revenues	$	213,690		$	620,308

Cost of Revenues		78,111			341,973

Gross Profit		135,579			278,335

Operating Expenses
Selling, general and administrative expenses		422,149			483,276
Operating Loss		(286,570	)		(204,941	)

Other (Expense) Income
Interest Expense		(33,280	)		(23,892	)
Interest Income		-			-
Total Other (Expense) Income		(33,280	)		(23,892	)

Loss from Continuing Operations before Income Tax Provision		(319,850	)		(228,833	)

Income tax provision		-			-

Loss from Continuing Operations		(319,850	)		(228,833	)
Loss from Discontinued Operations, net of income tax		-			(155,234	)

Net Loss	$	(319,850	)	$	(384,067	)

Loss per common share, basic and diluted:
Loss from continuing operations	$	(0.28	)	$	(0.01	)
Loss from discontinued operations		(0.00	)		(0.00	)
Net Loss	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding, basic and diluted		1,145,573			373,177

See accompanying notes to consolidated financial statements.

Table of Contents

Environmental Infrastructure Holdings Corp.

Consolidated Statements of Stockholders' Deficit

For the ~~Nine~~Three Months Ended ~~September 30, 2011 (Unaudited)~~March 31, 2012 (Unaudited and unreviewed) and for the Year Ended December 31, ~~2010~~

Common Stock, $.0001 Par Value Total
Issued Shares Shares Committed to be Issued Additional Paid Accumulated Stockholders'
Shares Par Value Shares Par Value In Capital Deficit Deficit

Balance, December 31, 2009 41,811,100 $ 4,181 9,609,942 $ 961 $ 5,345,807 $ (8,603,153 ) $ (3,252,204 )

Additional shares committed to be issued to members of Equisol due to nonreceipt of $1,500,000 by February 5, 2010 per the terms of the membership purchase agreement dated December 7, 2009 - - 15,643,296 1,564 (1,564 ) - -

Issuance of shares which were committed to be issued to parties at December 31, 2009 1,525,000 153 (1,525,000 ) (153 ) - - -

Sales of shares under private placement, net of offering costs of $10 440,000 44 - - 109,946 - 109,990

Conversion of debt and accrued interest at January 22, 2010 603,600 60 - - 162,912 - 162,972

Sale of shares in May 2010 750,000 75 - - 124,925 - 125,000

Exercise of stock options pursuant to cashless exercise provisions 456,209 46 - - (46 ) - -

Issuance of shares and warrants and shares and warrants committed to be issued for consulting services 800,000 80 350,000 35 181,785 - 181,900

Issuance of shares and shares committed to be issued pursuant to employment agreements 2,123,886 212 1,290,997 130 179,419 - 179,761

Interest expense charge resulting from reduction in conversion price of convertible notes and exercise price of warrants pursuant to December 3, 2010 agreement - �� - - - 26,826 - 26,826

Net loss for year ended December 31, 2010 - - - - - (2,428,584 ) (2,428,584 )

Balance, December 31, 2010 48,509,795 4,851 25,369,235 2,537 6,130,010 (11,031,737 ) (4,894,339 )

Issuance of shares which were committed to be issued to parties at December 31, 2010 25,169,235 2,517 (25,169,235 ) (2,517 ) - - -

Benficial conversion feature relating to issuance of debt on February 8, 2011 - - - - 26,520 - 26,520

Issuance of shares to former employee pursuant to Mutual Termination and Release Agreement 150,000 15 - - 4,485 - 4,500

Conversvion of debt and accrued interest on March 25, 2011 - - 4,561,496 456 1,139,917 - 1,140,373

Shares committed to be issued pursuant to employment agreements - - 1,212,598 121 44,879 - 45,000

Net loss for three months ended March 31, 2011 - - - - - (384,067 ) (384,067 )

Balance, March 31, 2011 73,829,030 7,383 5,974,094 597 7,345,811 (11,415,804 ) (4,062,013 )

Issuance of shares which were committed to be issued to parties at March 31, 2011 5,571,994 557 (5,571,994 ) (557 ) - - -

Issuance of shares for consulting services 2,650,000 265 - - 80,785 - 81,050

Issuance of shares to former employee pursuant to Mutual Termination and Release Agreement 880,000 88 - - 26,312 - 26,400

Benficial conversion feature relating to issuance of debt on May 5, 2011 and June 17, 2011 - - - - 29,250 - 29,250

Shares committed to be in connection with acquisition of Tower Turbines, Inc. on June 1, 2011 - - 2,000,000 200 99,800 - 100,000

Issuance of shares and shares committed to be issued pursuant to employment agreements 378,788 38 711,769 71 37,391 - 37,500

Net loss for three months ended June 30, 2011 - - - - - (455,833 ) (455,833 )

Balance, June 30, 2011 83,309,812 8,331 3,113,869 311 7,619,349 (11,871,637 ) (4,243,646 )

Issuance of shares which were committed to be issued to parties at June 1, 2011 2,711,769 271 (2,711,769 ) (271 ) - - -

Issuance of shares for consulting services 4,300,000 430 - - 120,520 - 120,950

Shares issued July 19, 2011 to Warchest Capital and Barclay Lyons, LLC in settlement of Equisol debt ($8,964) and accrued interest )$31,036), including $72,000 excess of the fair market value of the shares ($112,000) over debt settled ($40,000)
4,000,000 400 - - 111,600 - 112,000

Shares issued August 22, 2011 to Leland Martin in settlement of Equisol debt ($14,377) and accrued interest ($623), including $22,500 excess of the fair market value of the shares ($37,500) over debt settled ($15,000) 1,500,000 150 - - 37,350 - 37,500

Conversion of EIHC debt due Asher Enterprises, Inc. into Company common stock 3,974,652 398 - - 49,602 - 50,000

Benficial conversion feature relating to issuance of debt on July 14, 2011 - - - - 58,375 - 58,375

Issuance of shares and shares committed to be issued pursuant to employment agreements 614,199 61 2,732,052 273 83,166 - 83,501

Net loss for three months ended September 30, 2011 - - - - - (653,078 ) (653,078 )

Balance, September 30, 2011 100,410,432 $ 10,042 3,134,152 $ 313 $ 8,079,962 $ (12,524,715 ) $ (4,434,398 )
2011

	Series A Preferred Stock				Common Stock, $.0001 Par Value										Additional						Total
	Issued Shares				Issued Shares				Shares Committed to be Issued						Paid In			Accumulated			Stockholders'
	Shares		Par Value		Shares		Par Value		Shares			Par Value			Capital			Deficit			Deficit

Balance, December 31, 2009		-		-		209,056	$	21		48,050		$	5		$	5,350,923		$	(8,603,153	)	$	(3,252,204	)

Additional shares committed to be issued to members of Equisol due to nonreceipt of $1,500,000 by February 5, 2010 per the terms of the membership purchase agreement dated December 7, 2009		-		-		-		-		78,216			8			(8	)		-			-

Issuance of shares which were committed to be issued to parties at December 31, 2009		-		-		7,625		1		(7,625	)		(1	)		-			-			-

Sales of shares under private placement, net of offering costs of $10		-		-		2,200		-		-			-			109,990			-			109,990

Conversion of debt and accrued interest at January 22, 2010		-		-		3,018		-		-			-			162,972			-			162,972

Sale of shares in May 2010		-		-		3,750		-		-			-			125,000			-			125,000

Exercise of stock options pursuant to cashless exercise provisions		-		-		2,281		-		-			-			-			-			-

Issuance of shares and warrants and shares and warrants committed to be issued for consulting services		-		-		4,000		1		1,750			-			181,899			-			181,900

Issuance of shares and shares committed to be issued pursuant to employment agreements		-		-		10,619		1		6,455			1			179,759			-			179,761

Interest expense charge resulting from reduction in conversion price of convertible notes and exercise price of warrants pursuant to December 3, 2010 agreement		-		-		-		-		-			-			26,826			-			26,826

Net loss for year ended December 31, 2010		-		-		-		-		-			-			-			(2,428,584	)		(2,428,584	)

Balance, December 31, 2010		-		-		242,549		24		126,846			13			6,137,361			(11,031,737	)		(4,894,339	)

Issuance of shares which were committed to be issued to parties at December 31, 2010		-		-		125,846		13		(125,846	)		(13	)		-			-			-

Benficial conversion feature relating to issuance of debt on February 8, 2011		-		-		-		-		-			-			26,520			-			26,520

Issuance of shares to former employee pursuant to Mutual Termination and Release Agreement		-		-		750		-		-			-			4,500			-			4,500

Conversion of debt and accrued interest on March 25, 2011		-		-		22,808		2		-			-			150,985			-			150,987

Issuance of shares and shares committed to be issued for consulting services		-		-		34,750		4		3,600			-			205,812			-			205,816

Issuance of shares to former employee pursuant to Mutual Termination and Release Agreement		-		-		4,400		-		-			-			26,400			-			26,400

Benficial conversion feature relating to issuance of debt on May 5, 2011 and June 17, 2011		-		-		-		-		-			-			29,250			-			29,250

Shares issued in connection with acquisition of Tower Turbines, Inc. on June 1, 2011		-		-		10,000		1		-			-			99,999			-			100,000

Shares issued July 19, 2011 in settlement of Equisol debt ($8,964) and accrued interest ($31,036), including $72,000 excess of the fair market value of the shares ($112,000) over debt settled ($40,000)		-		-		20,000		2		-			-			111,998			-			112,000

Shares issued August 22, 2011 in settlement of Equisol debt ($14,377) and accrued interest ($623), including $22,500 excess of the fair market value of the shares ($37,500) over debt settled ($15,000)		-		-		7,500		1		-			-			37,499			-			37,500

Conversion of EIHC debt due Asher Enterprises, Inc. into Company common stock		-		-		55,860		6		-			-			70,714			-			70,720

Benficial conversion feature relating to issuance of debt on July 14, 2011		-		-		-		-		-			-			58,375			-			58,375

Issuance of Series A Preferred Stock in satisfaction of accrued salaries payable to two officers		6,948,810		695		-		-		-			-			114,305			-			115,000

Issuance of shares and shares committed to be issued pursuant to employment agreements		-		-		13,576		1		62,783			6			216,993			-			217,000

Net loss for year ended December 31, 2011		-		-		-		-		-			-			-			1,447,923			1,447,923

Balance, December 31, 2011		6,948,810	$	695		538,039	$	54		67,383		$	7		$	7,290,711		$	(9,583,814	)	$	(2,292,348	)

Conversion of EIHC debt due Warchest Capital into Company common stock		-		-		46,954		5		-			-			5,864			-			5,869

Issuance of shares to Brinen & Associates, LLP for services due		-		-		26,848		3		-			-			1,071			-			1,074

Issuance of shares and shares committed to be issued pursuant to employment agreements		-		-		533,732		53		-			-			50,947			-			51,000

Net loss for three months ended March 31, 2012		-		-		-		-		-			-			-			(319,850	)		(319,850	)

Balance, December 31, 2011		6,948,810	$	695		1,145,573	$	115		67,383		$	7		$	7,348,593		$	(9,903,664	)	$	(2,554,255	)

See accompanying notes to consolidated financial statements. 

Table of Contents

Environmental Infrastructure Holdings Corp.

Consolidated Statements of Cash Flows

For the ~~Nine~~Three Months Ended ~~September 30,~~March 31,

(Unaudited and unreviewed)

	2011			2010			2012			2011

Cash Flow from Operating Activities
Net Loss	$	(1,492,978	)	$	(1,104,521	)	$	(319,850	)	$	(384,619	)
Loss from discontinued operations		155,234			800,984			-			155,234
Adjustments to reconcile net loss to cash used in operating activities:
Provision for doubtful accounts		-			-			-			-
Depreciation and amortization		11,778			11,172			1,637			3,935
Amortization of debt discounts		54,718			1,487			-			4,918
Issuance of stock for services		364,951			227,761			57,943			41,996
Excess of the fair market value of the shares over debt settled		94,500			-
Issuance of debt and stock for marketing expenses related to acquisition of Tower Turbines, Inc.		150,000			-
Gain on settlement of former employee compensation liability based on terms of Mutual Termination and Release Agreement		(17,600	)		-
Net change in operating assets and liabilities:
Accounts Receivable		397,467			37,152			193,518			119,749
Inventory		23,770			74,022			-(3,570)			(7,022)
Prepaid expenses and other current assets		-			45			1,655			-
Accounts payable		(182,148	)		(35,638	)		(78,833	)		(82,344	)
Accrued expenses		(5,985	)		87,880			21,927			(5,896)
Accrued compensation		214,345			-			110,580			92,126
Accrued interest		21,385			12,988			3,517			15,337
Net cash provided by (used in) operating activities - continuing operations		(210,562	)		113,332			(101,476	)		(46,034)
Net cash used in operating activities - discontinued operations		(2,009	)		(222,720	)		-			(2,009	)
Net cash used in operating activities		(212,571	)		(109,388	)		(101,476	)		(48,043	)

Cash Flow from Investing Activities
Intangible assets additions		-			-			-			-
Property and equipment additions		-			-			-			-
Net cash provided by (used in) investing activities - continuing operations		-			-			-			-
Net cash provided by (used in) investing activities - discontinued operations		-			(4,000	)		-
Net cash provided by (used in) operating activities		-			(4,000	)		-			-

Cash Flow from Financing Activities
Increases in debt		269,731			-			53,923			68,000
Repayment of debt		(48,208	)		(236,226	)		(11,703	)		(14,549	)
Repayment of secured promissory note payable to related party		(9,000	)		-			-			(5,000)
Loans to XIOM (discontinued operation)		-			(170,144	)		-			-

Proceeds from private placement and private offerings of common stock, net of offering costs		-			109,990			-			-
Net cash provided by (used in) financing activities - continuing operations		212,523			(296,380	)		42,220			48,451
Net cash provided by (used in) financing activities - discontinued operations		-			183,922			-			-
Net cash provided by (used in) financing activities		212,523			(112,458	)		42,220			48,451

Increase (decrease) in cash and cash equivalents		(48	)		(225,846	)		(59,256	)		408
Cash and cash equivalents, beginning of period		20,464			246,725			61,177			20,464
Cash and cash equivalents, end of period		20,416			20,879			1,923			20,872
Less cash and cash equivalents of discontinued operations at end of period		(132	)		(11,323	)		-			(132	)
Cash and cash equivalents of continuing operations at end of period	$	20,284		$	9,556		$	1,923		$	20,740

Supplemental disclosures of cash flow information:
Interest paid	$	7,142		$	13,844		$	-		$	3,637
Income taxes paid	$	-		$	-		$	-		$	-

Supplemental noncash disclosures:
Conversion of accrued compensation payable to Equisol chief executive officer to note payable convertible into Company common stock effective January 1, 2011 (see Note 7)	$	55,000		$	-		$	-		$	55,000

Conversion of accrued compensation payable to former employee into the Company common stock based on terms of Mutual Termination and Release Agreement	$	44,000		$	-		$	-		$	-

Conversion of debt and accrued interest to common stock	$	1,140,373		$	162,972		$	5,869		$	1,140,373

See accompanying notes to consolidated financial statements.

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ENVIRONMENTAL INFRASTRUCTURE HOLDINGS ~~CORP~~.CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For The ~~Nine~~Three Months Ended ~~September 30, 2011~~March 31, 2012

~~(unaudited)~~

(Unaudited and unreviewed)

1)	~~ENTITY AND ORGANIZATION~~

1) ENTITY AND ORGANIZATION

EIHC Merger Co. was formed on November 5, 2009 as a wholly owned subsidiary of XIOM. On December 7, 2009 XIOM and EIHC Merger Co., executed an Agreement and Plan of Merger (the “Plan”) pursuant to Section 251(g) of the Delaware General Corporation Law. Pursuant to the plan, XIOM was repositioned as a wholly owned subsidiary of EIHC Merger Co.. EIHC Merger Co., then changed its name to Environmental Infrastructure Holdings Corp. (“EIHC” or the “Company”).

The Company is the successor issuer of XIOM for purposes of the Securities Act of 1933, as amended, and the filings made by XIOM hereunder. Pursuant to Rule 12(g)-3(a) promulgated under the Securities and Exchange Act of 1934, as amended, (the “Act”), the Company is the successor issuer of XIOM with respect to XIOM Common Shares, which were registered pursuant to Section 12(g) of the Act. Pursuant to such rule, the Company Common Shares may be deemed to be registered pursuant to Section 12(g) of the Act.

On December 7, 2009, EIHC acquired Equisol, LLC (“Equisol”), a Pennsylvania limited liability company established on April 25, 2003. EIHC issued 18,563,693 shares to the owners of Equisol and committed to issue 8,084,942 additional shares so that the former owners of Equisol would own 40% of the fully diluted shares of EIHC. Because outstanding shares were 24,372,407 at the time of the acquisition, the sellers received the equivalent of 52% of the outstanding shares of EIHC. In addition, most of the board members and management of EIHC resigned at the time of the acquisition. Accordingly, the acquisition was accounted for as a reverse merger of EIHC into Equisol. Results of operations prior to the merger presented in these unaudited consolidated financial statements are those of Equisol. Equisol’s equity prior to the merger has been retroactively restated for the equivalent number of shares received in the merger. As part of the merger agreement, Equisol spun off to its members a wholly-owned subsidiary as of December 7, 2009. Also, in connection with the merger, the Company’s fiscal year end was changed from September 30 to December 31.

Operations

From offices located in Pennsylvania, Texas and Louisiana, Equisol and its subsidiaries operate as an equipment solutions provider, delivering environmentally friendly products, services, and engineering solutions to customers.

On July 16, 2004, Equisol’s subsidiary PD Acquisition, LLC (“PDIR”) acquired the business and certain assets of an engineering company, Penn-Del, Inc., for a total of approximately $477,790 in cash and 25,000 Class A units of membership interest of Equisol (now 34,261 shares of EIHC Common Stock).

On March 1, 2006, Equisol’s subsidiary Gulf States Acquisition, LLC (“Gulf States”), acquired a 100% stock ownership interest in an engineering company, Gulf States Chlorinator & Pump Inc. (“GSCP”) for $350,000 in cash.

On August 29, 2007, Equisol’s subsidiary Gulf States Acquisition, LLC acquired a 100% stock ownership in an engineering company, Electrical & Instrumentation, Inc. (“E&I”), for 104,607 Class A Units of membership interest of Equisol (now 143,359 shares of EIHC common stock). Thereafter, the acquired company’s operations were included with Equisol’s operations and the acquiree filed a final income tax return for the period January 1, 2007 to August 29, 2007. In February 2010, the E&I division of Equisol ceased operations (see Note 7).

In November 2010, the Board of Directors of EIHC determined that it was in the best interest of the stockholders to dispose of the XIOM subsidiary. Accordingly, the assets and liabilities of XIOM have been shown as held for sale in the accompanying unaudited consolidated financial statements. Efforts to sell the XIOM subsidiary were unsuccessful, and on March 25, 2011, XIOM filed a voluntary petition in the United States Bankruptcy Court – District of Delaware under Chapter 7 of the United States Bankruptcy Code requesting liquidation of the assets and liabilities of XIOM Corp. On October 13, 2011, the U.S. Bankruptcy Court approved the trustees report of no distribution and abandonment of Xiom’s assets and closed the bankruptcy proceedings the effect of which on the consolidated financials of the Company is the cancellation of 5,305,000 Xiom options and 3,653,916 Xiom warrants, a net profit gain of $2,551,066, and a reduction of accumulated shareholders deficit of $9,076,948 all attributed to the discontinued operation.

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Interim Financial Statements

The unaudited consolidated financial statements and notes are presented as permitted by Form 10-Q. These unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures, normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles, have been omitted pursuant to such SEC rules and regulations. The accompanying consolidated financial statements at ~~September 30, 2011~~March 31, 2012 and for the ~~three and nine~~ month periods ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ are unaudited, but include all adjustments, consisting of normal recurring entries, which the Company’s management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. The consolidated balance sheet as of December 31, ~~2010,~~2011, is derived from statements included in the Company’s Form 10-K/A filed with the SEC on May 4, 2011. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements in that Form 10-K/A. The Company’s operating results will fluctuate for the foreseeable future. Therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.

2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The unaudited consolidated balance sheet at ~~September 30, 2011~~March 31, 2012 includes the accounts of EIHC and its wholly-owned subsidiary Equisol (including Equisol’s Gulf States subsidiary). The unaudited consolidated statements of operations, stockholders’ deficit, and cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ include the accounts of EIHC and Equisol. In November 2010, the Board of Directors determined to sell the Company’s wholly-owned subsidiary XIOM Corp, and its results of operations and assets and liabilities are shown as a discontinued operation in 2011 and 2010 (See Note 14). All significant intercompany balances and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, net, debt, accounts payable, and accrued expenses. The fair value of these financial instruments approximate their carrying amounts reported in the balance sheets due to the short term activities of these instruments and/or based on valuations of instruments with similar terms.

REVENUE RECOGNITION

Revenue from product sales is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred. Persuasive evidence of an arrangement and fixed price criteria are satisfied through sales orders. Collectability criteria are satisfied through credit approvals. Delivery criteria are satisfied when the products are shipped to a customer and title, and risk of loss, pass to the customer in accordance with the terms of sale. The Company has no obligation to accept the return of products sold other than for replacement of damaged products. Other than quantity price discounts negotiated with customers prior to billing and delivery (which are reflected as a reduction in sales), the Company does not offer any sales incentives or other rebate arrangements to customers.

Revenues from long-term contracts are recognized on the percentage-of-completion method, measured by the percentage of actual cost incurred to date, to the estimated total cost for each contract. Estimated costs and revenues are based upon engineering estimates of the work performed to date relative to the total work required under the contract. Changes in contract estimates which result in changes in estimated profit are applied to the cumulative work accomplished on the project. The re-calculated gross profit on the contract is applied to the revenues recorded to date for the entire life of the contract and the resulting income or loss is recorded in the current period.

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CASH AND CASH EQUIVALENTS

For the purpose of financial statement presentation, the Company includes cash on deposit, money market funds, and amounts held by brokers in cash accounts as cash. The Company considers securities with maturity of three months or less when purchased and funds temporarily held in escrow to be cash equivalents.

ACCOUNTS RECEIVABLE

Accounts receivable have been adjusted for all known uncollectible contracts and customer accounts. An allowance for doubtful contracts has been provided based on such analysis.

INVENTORY

Inventory consists primarily of various parts, materials and supplies utilized in the assembly and the operation of water treatment systems and is valued at the lower of cost (first-in, first-out) or market. (See Note 4).

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment is stated at cost less accumulated depreciation. Major expenditures for property and those that substantially increase useful lives are capitalized. Maintenance, repairs, and minor renewals are expensed as incurred. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are included in income. Depreciation is provided by utilizing the straight-line method over the estimated useful lives of the assets. (See Note 5).

EQUITY INVESTMENTS

Equity investments of 20% to 50% ownership are accounted for using the Equity Method of accounting. Equity investments of less than 20% ownership are accounted for using the Cost Method of accounting and equity investments of greater than 50% ownership are consolidated with the financials of the Company, as appropriate.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Accounting Standards Codification (“ASC”) ASC 360-10-35, "Accounting for the Impairment or Disposal of Long-Lived Assets", the Company reviews long-lived assets, including its property and equipment, goodwill and other intangible assets, which include trade names and customer accounts and patents, for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. In such circumstances, the Company will estimate the future cash flows expected to result from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, the Company will recognize an impairment loss to adjust to the fair value of the asset.

Coincident to the 2009 acquisition of XIOM, the Company recorded an impairment loss on the goodwill resulting from its acquisition of XIOM of $7,099,110. (See Note 6).

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~~At September 30, 2011, the discontinued operations of XIOM include impairment charges of $56,552 relating to:~~

Property and Equipment $ 31,552

Note receivable from and minority investment in publictly traded entity 25,000

Total $ 56,552

EARNINGS (LOSS) PER SHARE

The Company follows Accounting Standards Codification (“ASC”) topic 260, “Earnings per Share”, which requires presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”) by all publicly traded entities, as well as entities that have made a filing or are in the process of filing with a regulatory agency in preparation for the sale of securities in a public market.

Basic EPS is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding during the period. The computation of Diluted EPS gives effect to all potentially dilutive common shares during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an antidilutive effect on earnings. For the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ the diluted loss per common share calculation excluded the following potentially dilutive securities:

	Common Shares Equivalent				Common Shares Equivalent
	Nine Months Ended September 30,				Three Months Ended March 31,
	2011		2010		2012		2011
Convertible notes payable (see Note 7)		34,262,911		4,499,036		38,175		38,715
Stock options (see Note 10)		5,305,000		5,586,500		0		27,595
Common stock purchase warrants (see Note 10)		6,293,916		3,653,916		13,200		25,470
Total		45,861,827		13,739,452		51,915		91,240

INCOME TAXES

The Company records the tax effects of all transactions that have been reported in its consolidated financial statements. This includes tax effects that are taxable or deductible in the current reporting period, as well as tax effects that will lead to taxable income or tax deductions in future periods. Income taxes are accounted for using the asset/liability method. At each balance-sheet date, a current tax asset or liability is recorded, representing income taxes currently refundable or payable. Deferred tax assets and liabilities are also recorded, representing the tax effects of temporary book-tax differences, which will become payable or refundable in future periods. Deferred tax assets arise principally from net operating losses and capital losses available for carryforward against future years’ taxable income. Under the asset/liability method, the income tax provision is the result of the change in these current and deferred tax accounts from period to period, plus or minus tax payments made or refunds received during the year. A valuation allowance is recognized against deferred tax assets if, based on the weight of available evidence, it is more likely than not (i.e., greater than 50% probability) that some portion or all of the deferred tax asset will not ~~be realized.~~berealized.

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The Company follows ASC topic 740, “income taxes,” governing uncertain tax positions which provides guidance for recognition and measurement. This prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the consolidated financial statements. It also provides accounting guidance on derecognization, classification and disclosure of these uncertain tax positions.

Interest costs and penalties related to income taxes are classified as interest expense and selling, general and administrative costs, respectively, in the Company's consolidated financial statements. For the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ the Company did not recognize any interest or penalty expense related to income taxes. The Company is currently subject to a three-year statute of limitations by major tax jurisdictions.

FOREIGN CURRENCY TRANSLATION

For any future foreign subsidiaries, where the functional currency is other than the U.S. Dollar, revenue and expense accounts will be translated at the average rates during the period, and the balance sheet items will be translated at period end rates. Translation adjustments arising from the use of differing exchange rates from period to period will be included as a component of Stockholders’ Equity. Gains and losses from foreign currency transactions are included in net income. In the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ there were no foreign sales.

SHARE BASED PAYMENTS

Share based payments are made primarily to employees, outside consultants and other professional service providers, from time to time, subject to current cash flow conditions and at the discretion of the Board of Directors. The compensation cost is determined based on the estimated fair value of the shares at the measurement date, which is the earlier of (a) the date at which a commitment for performance by the counterparty to earn the shares is reached (generally the contract date) or (b) the date at which the counterparty’s performance is complete. If vesting conditions apply, the compensation costs are capitalized as prepaid expenses and expensed over the remaining term of the respective contracts.

Common stock options granted to employees may be issued for past services from time to time, or for future service, at the discretion of the Board of Directors, and the value of each such option is recorded as compensation expense as of the grant date. The related excess tax benefit received upon the exercise of stock options has not been recognized because, in the opinion of management, it is more likely than not, that such tax benefit will not be utilized in the future. In addition, the Company may issue restricted stock, which vests either immediately or over a future service period.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

New Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements.

3) ACQUISITION OF EIHC AND DISCONTINUED OPERATIONS

As noted above, on December 7, 2009, EIHC (legal acquirer) acquired Equisol and its subsidiaries (legal acquiree) in a transaction which has been accounted for in the accompanying consolidated financial statements as a reverse merger. As a result, the financial position and results of operations of EIHC and its subsidiary XIOM prior to the date of the acquisition have been excluded from the accompanying consolidated financial statements In connection with the merger, Equisol members received a total of 42,291,931 18,563,693 shares of common stock.

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The estimated fair values of the identifiable net assets of EIHC (and XIOM) at December 7, 2009 (date of acquisition) consisted of:

Cash and cash equivalents, including $268,975 held in escrow from XIOM private placement offering	$	348,028
Accounts receivable
(net of allowance for doubtful accounts of $85,000)		17,614
Stock subscription receivable (collected December 8, 2009)		204,975
Inventory		178,584
Prepaid expenses and other current assets		22,562
Property and equipment, net		167,263
Patents		2,400
Retainage receivable		51,851
Investment in and advances to investee		50,000
Security deposits		11,445

Total assets		1,054,722
Current portion of debt		1,819,311
Accounts payable		416,783
Accrued expenses		276,107
Accrued compensation		150,000
Accrued interest		373,426

Total liabilities		3,035,627

Identifiable net assets	$	(1,980,905	)

Goodwill of $7,099,110 (excess of the $5,118,205 estimated fair value, based on the stock trading price on the date of the acquisition, of the 24,372,407 shares retained by EIHC (formerly XIOM) shareholders over the $1,980,905 negative identifiable net assets of XIOM) was recorded at the December 7, 2009 acquisition date. As the Company believed that the estimated fair value of the goodwill recorded by EIHC was $0, the entire $7,099,110 goodwill was written off as an impairment loss on the December 7, 2009 acquisition date.

In December 2010, the Board of Directors of EIHC determined that it was in the best interest of the stockholders to dispose of the XIOM subsidiary. Accordingly, the assets and liabilities of XIOM have been shown as held for sale in the accompanying consolidated financial statements. Efforts to sell the XIOM subsidiary were unsuccessful, and on March 25, 2011, XIOM filed a voluntary petition in the United States Bankruptcy Court – District of Delaware under Chapter 7 of the United States Bankruptcy Code requesting liquidation of the assets and liabilities of XIOM Corp. On October 13, 2011, the U.S. Bankruptcy Court approved the trustees report of no distribution and abandonment of Xiom’s assets and closed the bankruptcy proceedings the effect of which on the consolidated financials of the Company is the cancellation of 5,305,000 Xiom options and 3,653,916 Xiom warrants, a net profit gain of $2,551,066, and a reduction of accumulated shareholders deficit of $9,076,948 all attributed to the discontinued operation.

4) INVENTORY

Inventory consisted of finished goods of ~~$71,071~~$28,570 and ~~$94,841,~~$25,000, at ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, respectively.

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5) PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010:~~2011:

	Useful Life- Years	2011			2010			Useful Life- Years	2012			2011
Machinery and equipment	5-10	$	66,072		$	66,072		5-10	$	66,072		$	66,072
Vehicles	3-5		28,587			28,587		3-5		28,587			28,587
Furniture and fixtures	5-7		5,522			5,522		5-7		5,522			5,522
			100,181			100,181				100,181			100,181
Less accumulated depreciation and amortization			(99,360	)		(92,082	)			(99,633	)		(99,496	)

Property and equipment, net		$	821		$	8,099			$	548		$	685

Depreciation and amortization of property and equipment for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 was $137 and ~~2010 was $7,278 and $6,510,~~$685, respectively.

6) GOODWILL AND OTHER INTANGIBLE ASSETS

Intangible assets, net, consisted of the following as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010:~~2011:

	2011			2010			2012			2011
Goodwill:
Acquisition of EIHC on December 7, 2009	$	7,099,110		$	7,099,110		$	7,099,110		$	7,099,110
Impairment recognized on acquisition of EIHC		(7,099,110	)		(7,099,110	)		(7,099,110	)		(7,099,110	)
Net		-			-			-			-

Acquisition of Gulf States Chlorinator & Pump Inc.on March 1, 2006		237,464			237,464			237,464			237,464

Other Intangible Assets:
Trade name and customer accounts:
Acquisition of intangible assets of Kerrigan
Dupree, Inc. on April 17, 2007		60,000			60,000			60,000			60,000
Accumulated amortization		(26,500	)		(22,000	)		(26,500	)		(22,000	)
Net		33,500			38,000			33,500			38,000

Intangible assets, net	$	270,964		$	275,464		$	270,964		$	275,464

Goodwill is not amortized but is reviewed for impairment at least annually. The trade name and customer accounts and the patent costs are amortized over their estimated economic lives of 10 years. Expected future amortization of intangible assets for the years ending ~~September 30, 2012,~~March 31, 2013, 2014, 2015 and 2016 is $6,000.

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7) DEBT

Debt consisted of the following at ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010:~~2011:

2011 2010
Equisol:

Due bank under E&I revolving line of credit, interest at 6.05% (default rate of 18%) and 7.25%, respectively, due 6/29/10 secured by accounts receivable of E&I ($0 at December 31, 2009 ) and by a right of setoff related to cash held at this bank. At 12/31/09, this bank held personal guaranties of the former owners of E&I; on February 25, 2010, the remaining balance due under this line of credit was paid down to zero by the Company. However, the former owners of E&I have retained borrowing authority under the line of credit and new borrowings have continued to occur since that date. To the date of the issuance of these consolidated financial statements, known borrowings under the line of credit in E & I’s name have been $29,000, the proceeds of which may be used to satisfy the $43,357 listed below in this table as due to the former owners at September 30, 2011, in a similar self-reimbursement to that of approximately $70,000 made by them from the line in 2008. In March 2010, the former owners reimbursed themselves $8,200, of which $3,495 was applied to reduce the amount due them by the Company and $4,705 represented expenses paid claimed by them as reimbursable Company expenses. As discussed in Note 12 under “Legal Proceedings” in the fourth paragraph, the former owners of E&I commenced an action alleging breach of contract of employment agreement. The Company believes its financial exposures concerning the former owners is likely limited to the extent of the remainder due of the $43,357. Management of the Company has indicated it is legally dissolving E&I which has already merged out of existence for income tax purposes.
16,508 16,508

Convertible Debt due related parties and others, interest at 8%, due on demand, secured by all Equisol assets under a lien junior to that of the $400,000 promissory note payable to related party (see Note 8), convertible into Equisol membership units 136,326 162,067

Convertible Debt to chief executive officer of Equisol, interest at 8%, due January 1, 2012, convertible at $0.20 55,000 -

Loan payable to chief executive officer of the Company, interest at 8%, due on demand. 99,582 112,600

Loan payable to former owners of E & I, interest at 0%, due on demand. (see the related discussion above in this table related to the balance due of $16,508 at September 30, 2011 and December 31, 2010, respectively, under the revolving line of credit with another bank).
43,357 43,357

Convertible debt due to former owner of Tower Turbines, Inc., interest due at 12%, due on September 1, 2014 50,000 -

Gulf States:
SBA guaranteed loan payable to financial institution, interest at prime rate plus 2.75%, due in monthly installments of principal and interest of $3,100 with balance due on May 31, 2016, secured by guaranties of Equisol and two officers of the Company, certain personal property, and certain real property owned by two officers of the Company. The loan requires, among other things, prior lender written consent concerning transfer or disposal of Company assets, payment of distributions, or changes in ownership structure during the period the loan is outstanding 211,763 242,021

EIHC:
Convertible Promissory Notes to Asher Enterprises, Inc., interest at a rate of 8% per annum (22% default rate), are due on November 10, 2011, December 30, 2011, January 25, 2012, and April 30, 2012, and are convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 61% of the market price (defined as the average of the lowest three trading prices for the common stock during the ten trading day preceeding the conversion date). The Notes also provide that if the Company issues or sells any common stock for a consideration per share less than the conversion prices, the conversion price will be reduced to such consideration per share. The Company can prepay the notes in full if it so chooses. Reflected net of unamortized debt discount related to beneficial conversion feature of each note aggregating $28,180 as of September 30, 2011.
102,320 -

Convertible Promissory Notes to Barclay Lyons. LLC, interest at a rate of 9.875% semi-annually (15% default rate), are due on July 8, 2012, and are convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 65% of the market price (defined as the average of the lowest three closing prices for the common stock during the term of the note preceding the conversion date). The Company can prepay the notes in full if it so chooses. Reflected net of unamortized debt discount related to beneficial conversion feature of each note aggregating $7,812 as of September 30, 2011.
2,188 -

Convertible Promissory Note to Warchest Capital, interest at a rate of 9.875% semi-annually (15% default rate), is due on July 8, 2012 and is convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 65% of the market price (defined as the average of the lowest three closing prices for the common stock during the term of the note preceding the conversion date). The Company can prepay the notes in full if it so chooses. Reflected net of unamortized debt discount related to beneficial conversion feature of each note aggregating $23,435 as of September 30, 2011.
6,565 -

Convertible Promissory Note to Leland Martin. LLC, interest at a rate of 9.875% semi-annually (15% default rate), is due on August 18, 2012 and is convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 65% of the market price (defined as the average of the lowest three closing prices for the common stock during the term of the note preceding the conversion date). The Company can prepay the notes in full if it so chooses. 15,000 -

TOTAL 738,609 576,553

Less Current Portion of Debt (520,601 ) (376,612 )

Long Term Portion of Debt $ 218,008 $ 199,941

	2012		2011
Equisol:
Credit Card due		2290		2290

Due bank under E&I revolving line of credit, interest at 6.05% (default rate of 18%) and 7.25%, respectively, due 6/29/10 secured by accounts receivable of E&I ($0 at December 31, 2009 ) and by a right of setoff related to cash held at this bank. At 12/31/09, this bank held personal guaranties of the former owners of E&I; on February 25, 2010, the remaining balance due under this line of credit was paid down to zero by the Company. However, the former owners of E&I have retained borrowing authority under the line of credit and new borrowings have continued to occur since that date. To the date of the issuance of these consolidated financial statements, known borrowings under the line of credit in E & I’s name have been $29,000, the proceeds of which may be used to satisfy the $43,357 listed below in this table as due to the former owners at September 30, 2011, in a similar self-reimbursement to that of approximately $70,000 made by them from the line in 2008. In March 2010, the former owners reimbursed themselves $8,200, of which $3,495 was applied to reduce the amount due them by the Company and $4,705 represented expenses paid claimed by them as reimbursable Company expenses. As discussed in Note 12 under “Legal Proceedings” in the fourth paragraph, the former owners of E&I commenced an action alleging breach of contract of employment agreement. The Company believes its financial exposures concerning the former owners is likely limited to the extent of the remainder due of the $43,357. Management of the Company has indicated it is legally dissolving E&I which has already merged out of existence for income tax purposes.		-		-

Convertible Debt due related parties and others, interest at 8%, due on demand, secured by all Equisol assets under a lien junior to that of the $400,000 promissory note payable to related party (see Note 8), convertible into Equisol membership units		107,202		136,326

Convertible Debt to chief executive officer of Equisol, interest at 8%, due January 1, 2012, convertible at $0.20		22,000		22,000

Loan payable to chief executive officer of the Company, interest at 8%, due on demand .		119,667		89,582

Loan payable to former owners of E & I, interest at 0%, due on demand. (see the related discussion above in this table related to the balance due of $16,508 at December 31, 2011 and 2010, respectively, under the revolving line of credit with another bank).		43,357		43,357

Convertible debt due to former owner of Tower Turbines, Inc., interest due at 12%, due on September 1, 2014		50,000		50,000


Gulf States:
SBA guaranteed loan payable to financial institution,interest at prime rate plus 2.75%, due in monthly installments of principal and interest of $3,100 with balance due on May 31, 2016, secured by guaranties of Equisol and two officers of the Company, certain personal property, and certain real property owned by two officers of the Company. The loan requires, among other things, prior lender written consent concerning transfer or disposal of Company assets, payment of distributions, or changes in ownership structure during the period the loan is outstanding		198,133

EIHC:
Convertible Promissory Notes to Asher Enterprises, Inc., interest at a rate of 8% per annum (22% default rate), are due on December 30, 2011, January 25, 2012, and April 30, 2012, and are convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 61% of the market price (defined as the average of the lowest three trading prices for the common stock during the ten trading day preceeding the conversion date). The Notes also provide that if the Company issues or sells any common stock for a consideration per share less than the conversion prices, the conversion price will be reduced to such consideration per share. The Company can prepay the notes in full if it so chooses. Reflected net of unamortized debt discount related to beneficial conversion feature of each note aggregating $28,180 as of December 31, 2011.		117,689			117,689

Convertible Promissory Notes to Barclay Lyons. LLC, interest at a rate of 9.875% semi-annually (15% default rate), are due on July 8, 2012, and are convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 65% of the market price (defined as the average of the lowest three closing prices for the common stock during the term of the note preceding the conversion date). The Company can prepay the notes in full if it so chooses. Reflected net of unamortized debt discount related to beneficial conversion feature of each note aggregating $7,812 as of December 31, 2011.		2,188			2,188

Convertible Promissory Note to Warchest Capital, interest at a rate of 9.875% semi-annually (15% default rate), is due on July 8, 2012 and is convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 65% of the market price (defined as the average of the lowest three closing prices for the common stock during the term of the note preceding the conversion date). The Company can prepay the notes in full if it so chooses. Reflected net of unamortized debt discount related to beneficial conversion feature of each note aggregating $23,435 as of December 31, 2011.		696			6,656

Convertible Promissory Note to Leland Martin. LLC, interest at a rate of 9.875% semi-annually (15% default rate), is due on August 18, 2012 and is convertible at the option of the holder in whole or in part into Company common stock at a Variable Conversion price equal to 65% of the market price (defined as the average of the lowest three closing prices for the common stock during the term of the note preceding the conversion date). The Company can prepay the notes in full if it so chooses.		15,000			15,000

Total		730,761			688,964

Less current portion of debt		(512,753	)		(470,956	)

Long term portion of debt	$	218,008		$	218,008

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Maturities of the debt as of ~~September 30, 2011~~March 31, 2012 for the next five years and thereafter are as follows:

Year ending
December 31,
2012		565,886		603,219
2013		54,373		47,003
2014		100,158		47,114
2015		53,251		50,707
2016		24,368		12,145
Total	$	798,036	$	760,188
Unamortized debt discount		59,427		59,427
Net	$	738,609	$	730,761

Accrued interest on debt consisted of the following at ~~September 30, 2011~~March 31, 2012 and and December 31, ~~2010:~~2011:

	2011		2010		2012		2011
Equisol loan payable to chief executive officer of the Company	$	91,242	$	82,997	$	98,815	$	98,184
EIHC convertible debt		6,750		-		10,809		3,214
Equisol convertible debt		18,331		35,866		49,791		22,725
Secured Promissory Note payable to a related party		35,906		11,981		51,677		43,870
Total	$	152,229	$	130,844	$	211,092	$	167,993

Interest expense incurred for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ is summarized as follows:

	2011		2010		2012		2011
Equisol	$	39,126	$	27,052	$	27,673	$	39,126
Gulf States		9,742		13,393		2,090		9,742
EIHC (including debt discount of $32,318)		36,471		-		35,835		36,471
Total	$	85,339	$	40,445	$	65,598	$	85,339

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~~Debt relating to Discontinued Operation~~

~~Debt relating to the Company’s wholly-owned subsidiary XIOM Corp consisted of the following at September 30, 2011 and December 31, 2010:~~

2011 2010
Convertible notes sold to investors in 2007, interest at 7% (default rate of 15%), originally due April 2012 (but acceleratable since required Registration Statement was not declared effective by September 2008, one year from the final closing date of the related private offering), convertible at a conversion price of $1.50 per share $ - $ 820,000

Convertible note sold to investor in April 2008, interest at 7%, due March 2010, convertible at a conversion price of $1.50 per share – in technical default 500,000 500,000

Convertible notes sold to investors from September 2009 to August 2009, interest at 100%, due from December 2009 to February 2010, convertible at a conversion price equal to 75% of the 30 day moving average of the closing price of the Company’s common stock immediately prior to such conversion – in technical default 350,000 350,000

Loan payable to former Chief Executive Officer of XIOM, interest at 0%, due on demand 29,311 29,311
Total $ 879,311 $ 1,699,311

On March 25, 2011, the $820,000 convertible notes sold to investors in 2007 (and $320,873 accrued interest thereon) were satisfied through the issuance of a total of 4,561,496 shares of our common stock. See Note 9.

8) NOTE PAYABLE TO RELATED PARTY

In August 2010, Equisol received cash advances of approximately $400,000 from PDIR, LLC to satisfy Equisol’s obligations under its bank line of credit. PDIR, LLC is controlled by two officers of the Company.

The $400,000 promissory note is due in 4 equal installments of $100,000 plus accrued interest theron at a rate of 8% per annum (overdue principal of 12% per annum) and is secured by all the assets of Equisol, which total ~~$455,684~~$165,581 at ~~September 30, 2011.~~March 31, 2012.

The ~~$398,202~~$395,452 balance of the note is due as follows:

Year Ending December 31,
2011	$	98,202
2012		100,000		195,452
2013		100,000		100,000
2014		100,000		100,000
Total	$	398,202	$	395,452

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9) COMMON STOCK (Before 1:200 Reverse Split)

As described in Note 1, the acquisition of Equisol on December 7, 2009 was accounted for as a reverse merger of EIHC into Equisol. Accordingly, the accompanying financial statements reflect issued shares and shares committed to be issued at December 31, 2009 and prior to the reverse merger based on the number of shares issued (18,563,693 shares) and committed to be issued (8,084,942 shares), or 26,648,635 shares total, to Equisol members on December 7, 2009 pursuant to the reverse merger and exclude EIHC (formerly XIOM Corp.) equity transactions prior to the reverse merger on December 7, 2009. The fair value of the issued shares (23,247,407 shares) and shares committed to be issued (1,125,000 shares), or 24,372,407 shares total, relating to the shares retained by EIHC (formerly XIOM Corp.) shareholders pursuant to the reverse merger on December 7, 2009 has been reflected as consideration for the reverse purchase of XIOM at December 7, 2009 (see Note 3).

The 24,372,407 shares retained by EIHC (formerly XIOM Corp.) shareholders at December 7, 2009 increased from 18,722,357 shares issued and committed to be issued at September 30, 2009, as follows:

Issued and committed to be issued shares at September 30, 2009			18,722,357
Shares issued for services by XIOM former chief executive officer and consultants coincident to completing reverse merger with an estimated value of $748,516 based on the stock trading price			2,250,050
Shares sold at $0.20 per share to a convertible note holder of XIOM (a)			2,300,000
Shares sold at $0.25 per share (b)			1,100,000

Issued and committed to be issued shares at December 7, 2009			24,372,407

(a) $250,000 of the proceeds from the sale of the 2,300,000 shares of $460,000 were received by XIOM prior to December 7, 2009, while $204,975, net of offering costs of $5,025, was received by the Company on December 8, 2009.

At ~~September 30, 2011,~~March 31, 2012, the XIOM convertible note holder holding the 2,300,000 shares also holds $125,000 of notes sold to investors from June 2009 to August 2009 that were due between December 2009 and February 2010, with a conversion price equal to 75% of the 30 day moving average of the closing price of XIOM’s common stock prior to such conversion.

(b) On October 15, 2009, XIOM commenced a private placement whereby it planned to sell a minimum of $250,000 and a maximum of $2,000,000 of its $.0001 Par Value Common Stock to accredited investors at a subscription price of $0.25 per unit, which unit included one share of common stock and one warrant to purchase its common stock at $.75 per share. Under the offering, the warrants to purchase common stock are callable if the trading price of the shares close at a price of $1.50 per share for 30 consecutive days. Prior to December 7, 2009, proceeds of $275,000 from subscribers were deposited into escrow, representing 1,100,000 shares issuable under the offering. From December 7, 2009 to December 31, 2009, another $100,000 was deposited into escrow, representing 400,000 shares issuable under the offering. In January and February 2010, $110,000 was deposited into escrow from subscribers, representing 440,000 shares issuable under the offering.

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Below is a summary of the private placement made by XIOM coincident to the reverse merger:

Date deposited into Escrow	Shares of Common Stock Sold at $.25		Gross Proceeds of the Offering		Offering Costs		Net Proceeds

Prior to December 7, 2009		1,100,000	$	275,000	$	6,025	$	268,975

From December 7, 2009 to December 31, 2009		400,000		100,000		39,650		60,350

Through December 31, 2009		1,500,000		375,000		45,675		329,325

January 1, 2010 to February 18, 2010		440,000		110,000		10		109,990

Total		1,940,000	$	485,000	$	45,685	$	439,315

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For the period December 7, 2009 to December 31, 2009, proceeds from XIOM private placement offerings, net of offering costs, consisted of:

Shares sold at $0.20 per shares to a convertible note holder of XIOM	$	204,975
Shares sold at $0.25 per share in private placement		60,350
Total	$	265,325

Coincident to the reverse merger on December 7, 2009, one of Equisol’s convertible debt holders (the father of the Chief Executive Officer of Equisol – see Note 13 - Employment Agreements) converted $150,000 of Debt into 483,688 shares of EIHC common stock (equivalent to 352,941 membership units of Equisol).

From December 7, 2009 (after the reverse merger) to December 31, 2009, the Company sold a total of 400,000 shares of EIHC common stock to investors at a price of $0.25 per share for gross proceeds of $100,000. After deducting costs of $39,650 relating to the related private placement, net proceeds to the Company were $60,350. In connection with these sales, the investors received a total of 400,000 warrants exercisable into up to 400,000 shares of common stock at an exercise price of $0.75 per share to December 31, 2012.

Effective January 15, 2010, the Company issued 244,444 shares of its common stock to the daughter of the former chief executive officer of XIOM (to October 31, 2009) pursuant to a cashless exercise of 300,000 stock options which had been granted to her in May 2009.

Effective January 15, 2010, the Company issued 150,000 shares of its common stock (issued September 15, 2010) to a consultant for services rendered. The $40,500 fair value of the shares was included in selling, general and administrative expenses in the three months ended March 31, 2010.

Effective January 22, 2010, the Company issued 603,600 shares of its common stock to a noteholder in satisfaction of debt ($140,000) and accrued interest ($42,472).

Effective February 5, 2010, the Company issued an additional 15,643,296 shares of its common stock to the former members of Equisol, LLC due to nonreceipt of $1,500,000 by February 5, 2010 per the terms of the membership purchase agreement dated December 7, 2009.

Effective February 17, 2010, the Company issued 211,765 shares of its common stock to a former consultant to XIOM pursuant to a cashless exercise of 300,000 stock options which had been granted to him in May 2009.

On March 30, 2010, the Company issued 250,000 shares of its common stock to the former chief executive of XIOM (to October 31, 2009) for services rendered. The $42,500 fair value of the shares was included in selling, general and administrative expenses in the three months ended March 31, 2010.

Effective May 20, 2010, the Company issued 750,000 shares of its common stock to an investor in exchange for $125,000 cash.

Effective September 20, 2010, the Company issued 250,000 shares of its common stock for consulting services rendered. The $10,000 fair value of the shares was included in Selling, General, and Administrative expenses in the three months ended September 30, 2010.

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On November 19, 2010, the Company committed to issue a total of 500,000 shares (300,000 shares issued to date) and 1,000,000 warrants exercisable at $0.25 per share to December 31, 2013 to two consultants pursuant to a Consulting Agreement dated November 19, 2010 (see Note 12). The $47,500 fair value of the shares and the $41,900 fair value of the warrants (valued using the Black Scholes option pricing model and the following assumptions: exercise price = $0.25 per share, term = 1138 days; risk free interest rate = 1.1283%, expected volatility = 100%), or $89,400 total, was included in selling, general, and administrative expenses in the three months ended December 31, 2010.

For the year ended December 31, 2010, the Company issued a total of 3,414,883 shares of its common stock pursuant to the three employment agreements discussed in Note 12. The $179,761 fair value of the shares was included in selling, general, and administrative expenses in the year ended December 31, 2010.

Of the 25,369,235 shares committed to be issued at December 31, 2010, 1,440,997 shares were issued on February 23, 2011 and 23,728,238 shares were issued on March 24, 2011 and 200,000 shares committed to be issued have not yet been issued.

On March 25, 2011, the Company committed to issue 4,561,496 shares of its common stock pursuant to a debt conversion agreement with 12 XIOM Corp. noteholders. The agreement converts a total of $1,140,373 consisting of $820,000 principal and $320,373 accrued interest at a conversion price of $0.25 per share. The Company recorded a $1,140,373 reduction in liabilities of discontinued operations. These shares were subsequently issued on April 6, 2011.

For the three months ended March 31, 2011, the Company committed to issue a total of 1,212,598 shares of its common stock pursuant to the three employment agreements discussed in Note 12. The $45,000 fair value of the shares was included in selling, general, and administrative expenses in the three months ended March 31, 2011. These shares were subsequently issued on May 13, 2011.

Effective May 4, 2011 EIHC adopted its 2011 Employee and Consultant Stock Compensation Plan (the “Plan”). The number of shares of common stock of the Company that are available for issuance under the Plan are 20,000,000 shares of the Company’s Common Stock, $0.0001 par value, consisting of 10,000,000 shares allocated to employees and directors and 10,000,000 shares allocated to advisors and/or consultants,. A Registration Statement on Form S-8 was filed with the Securities and Exchange Commission (the “Commission”) for the purposes of registering the 20,000,000 shares of the Company’s Common Stock issuable under the Plan.

On May 9, 2011, the Company issued 880,000 shares of its common stock in lieu of accrued compensation pursuant to a release agreement with a former employee. The $17,600 excess of the liability settled ($44,000) over the fair value of the shares was included in other income in the three months ended March 31, 2011.

On May 13, 2011, the Company issued 2,000,000 shares of its common stock to a website consultant pursuant to a consulting services agreement dated April 5, 2011. The $59,400 fair value of the shares at April 5, 2011 was included in the selling, general, and administrative expenses in the three months ended June 30, 2011.

On May 13, 2011, the Company issued 400,000 shares of its common stock to an investor relations consultant pursuant to an agreement dated April 25, 2011 (See Note 12). The $14,400 fair value of the shares at April 25, 2011was included in the selling, general, and administrative expenses in the three months ended June 30, 2011.

Effective June 1, 2011, the Company committed to issue 2,000,000 shares of its common stock to the sole stockholder of Tower Turbines, Inc. (“TT”) in connection with Equisol’s acquisition of TT pursuant to a Stock Purchase Agreement (See Note 7). TT had no assets nor liabilities at the June 1, 2011 acquisition date and its operations since inception have been limited to researching water tower owners for their interest in ordering equipment to capture energy from water flow. The $100,000 fair value of the shares at June 1, 2011, along with the $50,000 fair value of the promissory note also issued to the TT sole stockholder in connection with TT’s acquisition, was included in operating expenses in the three months ended June 30, 2011 as marketing costs associated with future product development and sales incurred on acquisition. The shares were subsequently issued on September 30, 2011.

On June 21, 2011, the Company issued 250,000 shares of its common stock to an entity for consulting services rendered. The $7,250 fair value of the shares of June 21, 2011 was included in selling, general, and administrative expenses in the three months ended June 30, 2011.

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For the three months ended June 30, 2011, the Company committed to issue a total of 711,769 shares of its common stock pursuant to the EIHC and Equisol employment agreements discussed in Note 12. The $37,500 fair value of the shares was included in the selling, general, and administrative expenses in the three months ended June 30, 2011. The shares were subsequently issued on September 8, 2011.

On July 19, 2011, the Company issued 1,800,000 shares of its common stock to a website consultant pursuant to a consulting services agreement dated April 5, 2011. The $70,200 fair value of the shares at July 19, 2011 was included in the selling, general, and administrative expenses in the three months ended Sepember 30, 2011.

On July 19, 2011, the Company issued a total of 4,000,000 freely tradable shares of its common stock to two entities in satisfaction of $40,000 of Equisol’s past due debt (Convertible Promissory Note dated August 31, 2004, due August 31, 2007, convertible into Equisol units at a 15% discount) bearing interest at 8% due to a related party totaling $40,000 (principal - $8,964, accrued interest - $31,036) which was sold (in similar proportions) to the same two entities described in Note 7 under two Debt Purchase Agreements for a total of $40,000 cash, reducing the principal of the note due to the aforementioned related party from $80,000 at June 30, 2011 (included in the "Convertible Debt due related parties and others" line in Note 7) to $71,036 after the transaction and reducing the accrued interest payable to $0. The $72,000 excess of the fair market value of the 4,000,000 shares of common stock at July 13, 2011 ($112,000) over the $40,000 debt settled is included in other expenses in the Statement of Operations for the three months ending September 30, 2011.

On August 18, 2011, the Company issued 813,008 shares of its common stock in satisfaction of $10,000 of its debt obligations to Asher Enterprises, Inc. (See Note 7).

On August 22, 2011, the Company issued 1,190,476 shares of its common stock in satisfaction of $15,000 of its debt obligations to Asher Enterprises, Inc. (See Note 7).

On August 22, 2011, the Company issued 1,500,000 freely tradable shares of its common stock in satisfaction of $15,000 of Equisol’s past due debt (Convertible Promissory Note dated August 31, 2004, due August 31, 2007, convertible into Equisol units at a 15% discount) bearing interest at 8% due to a related party totaling $15,000 (principal - $14,377.22, accrued interest - $622.78) which was sold to the same entity described in Note 7 under a Debt Purchase Agreements for $15,000 cash, reducing the principal of the note due to the aforementioned related party from $71,036 at July 19, 2011 (included in the "Convertible Debt due related parties and others" line in Note 7) to $56,658 after the transaction and reducing the accrued interest payable to $0. The $22,500 excess of the fair market value of the 1,500,000 shares of common stock at August 22, 2011 ($37,500) over the $15,000 debt settled is included in other expenses in the Statement of Operations for the three months ending September 30, 2011.

On September 8, 2011, the Company issued 849,673 shares of its common stock in satisfaction of $13,000 of its debt obligations to Asher Enterprises, Inc. (See Note 7).

On September 8, 2011, the Company issued 2,500,000 shares of its common stock to a marketing consultant pursuant to a consulting services agreement dated July 17, 2011. The $50,750 fair value of the shares at September 8, 2011 was included in the selling, general, and administrative expenses in the three months ended September 30, 2011.

On September 20, 2011, the Company issued 1,121,495 shares of its common stock in satisfaction of $12,000 of its debt obligations to Asher Enterprises, Inc. (See Note 7).

On October 7, 2011, the company issued 2,352,941 shares of its common stock in satisfaction of $12,000 of its debt obligations to Asher Enterprises, Inc. (See Note 7).

On October 13, 2011, the U.S. Bankruptcy Court approved the trustees report of no distribution and abandonment of Xiom’s assets and closed the bankruptcy proceedings the effect of which on the consolidated is the cancellation of 5,305,000 Xiom options and 3,653,916 Xiom warrants, a net profit gain of $2,551,066, and a reduction of accumulated shareholders deficit of $9,076,948 all attributed to the discontinued operation.

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On October 19, 2011, the company issued 4,007,633 shares of its Series A preferred stock to two company officers as settlement of $105,000 of the back salary owed to the officers. The Certificate of Origination of the preferred shares provides for preferred shareholders to receive 75% of all pooled dividends. Additionally, each preferred share has a voting right equivalent to 50 votes of Common Stock and each preferred share can be converted to two shares of Common Stock at the request of the preferred shareholders or upon liquidation, dissolution, or winding up of the Company.

October 26, 2011, the Board of Directors of the Company approved an amendment its 2011 Employee and Consultant Stock Compensation Plan dated May 4, 2011 (i) reallocating the 20,000,000 shares of the Company’s Common Stock, $0.0001 par value to provide 16,200,000 shares to employees and directors and 3,800,000 shares to advisors and/or consultants; (ii) approving the distribution of a number of shares to be distributed to the employees and directors pursuant to the Plan; and (iii) terminating said Registration Statement Form S-8 as amended and removing the 89,822 shares remaining unsold or undistributed as of the date of termination.

On November 7, 2011, the company issued 4,844,444 shares of its common stock in satisfaction of $6,000 of its debt obligations and $2,720 of interest to Asher Enterprises, Inc. (See Note 7).

On February 3, 2012, the Company issued 46,954 shares of its common stock in satisfaction of $5,869.25 of debt obligations to Warchest Capital (See Note 7).

On February 9, 2012, the Company issued 26,848 shares of its common stock to a legal firm pursuant to a services agreement. The $1,074 fair value of the shares at February 9, 2012 was included in the selling, general, and administrative expenses in the three months ended March 31, 2012.

For the three months ended ~~September 30, 2011,~~March 31, 2012, the Company ~~committed to issue~~issued a total of ~~2,732,051~~533,732 shares of its common stock pursuant to the EIHC and Equisol employment agreements discussed in Note 12. The ~~$37,500~~$51,000 fair value of the shares was included in the selling, general, and administrative expenses in the three months ended ~~September 30, 2011.~~

Of the 3,134,152 shares committed to be issued at September 30, 2011 (but not yet issued), 2,732,051 shares are issuable for services pursuant to the EIHC and Equisol employment agreements discussed in Note 12, 202,100 shares relate to January, February, and March ~~2011 services pursuant to the Xiom employment agreement discussed in Note 12 and 200,000 shares relate to the consulting agreement dated November 19, 2010 discussed above.~~31, 2012.

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10) STOCK OPTIONS AND COMMON STOCK PURCHASE WARRANTS

A summary of stock option and warrant activity for the year ended December 31, 2010 and the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 follows:

Common Shares Equivalent
Stock Options Warrants

Outstanding at December 31, 2009 6,186,500 3,653,916

Granted and issued - 1,440,000
Exercised (456,209 ) -
Forfeited/expired/cancelled (211,291 ) -

Outstanding at December 31, 2010 5,519,000 5,093,916

Granted and issued - 1,200,000
Exercised - -
Forfeited/expired/cancelled (214,000 ) -

Outstanding at September 30, 2011 5,305,000 6,293,916

~~Stock options outstanding at September 30, 2011 follow:~~

Granted in
Year Ended

Number
Outstanding
Exercise Expiration
December 31, and Exercisable Price Date

2006 350,000 $ 0.58 October 14, 2011
2007 250,000 $ 0.42 July 5, 2012
2007 300,000 $ 0.42 August 14, 2012
2007 30,000 $ 1.25 August 30, 2012
2007 525,000 $ 0.50 October 15, 2012
2008 300,000 $ 1.05 February 19, 2013
2008 500,000 $ 0.42 February 29, 2013
2009 1,500,000 $ 0.25 February 27, 2014
2009 750,000 $ 0.50 March 23, 2014
2009 500,000 $ 0.75 March 23, 2014
2009 300,000 $ 0.05 May 26, 2014

Total 5,305,000

	Common Shares Equivalent
	Stock Options			Warrants
Outstanding at December 31, 2009		30,933			16,270

Granted and issued		-			7,200
Exercised		(2,281	)		-
Forfeited/ expired/ cancelled		(1,057	)		-

Outstanding at December 31, 2010		27,595			25,470

Granted and issued (See Note 9)		-			6,000
Exercised (See Note 9)		-			-
Forfeited/expired/cancelled (See Note 9)		(26,525	)		(18,270	)

Outstanding at December 31, 2011		0			13,200

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Stock options outstanding at March 31, 2012 follow:

Granted in Year Ended	Number Outstanding		Exercise	Expiration
December 31,	and Exercisable		Price	Date




Total		0

Warrants outstanding at ~~September 30, 2011~~March 31, 2012 follow:

Issued in Year Ended Number Outstanding Exercise Expiration
December 31, and Exercisable Price Date

2007 666,666 $ 2.00 June 2012
2007 666,666 $ 2.50 June 2012
2007 154,667 $ 1.00 June 2012
2007 154,667 $ 1.25 Juner 2012
2008 250,000 $ 1.50 March 2013
2008 250,000 $ 1.80 March 2013
2008 6,250 $ 2.00 March 2013
2008 5,000 $ 2.50 March 2013
2009 1,100,000 $ 0.75 December 31, 2012
2009 400,000 $ 0.75 December 31, 2012
2010 440,000 $ 0.75 December 31, 2012
2010 1,000,000 $ 0.25 December 31, 2013
2011 1,200,000 $ 0.10 July 8, 2014

Total 6,293,916

Issued in Year Ended December 31,	Number Outstanding and Exercisable		Exercise Price		Expiration Date

2010		2,200	$	0.75	December 31, 2012
2010		5,000	$	0.25	December 31, 2013
2011		6,000	$	0.10	July 8, 2014

Total		13,200

As a result of the Chapter 7 filing of the Xiom subsidiary, ~~it is expected that~~ all Xiom related options and warrants are immediately ~~terminated.~~terminated on October 13, 2011.

11) INCOME TAXES

For 2009 and prior years, EIHC, Equisol, GSCP, and XIOM have filed separate federal and state income tax returns; returns for 2010 have not yet been filed. Equisol filed its returns as a partnership and as such their federal taxable income (loss) has been allocated and taxed to their members and were not taxable to Equisol. For income taxes, GSCP has used February 28 as its year end.

For the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 and 2010, the income tax provision consisted of:

	2011		2010
GSCP - Federal income tax	$	-	$	-
GSCP – State income tax		-		-
Equisol – State income tax		-		-
Total	$	-	$	-

As of March 31, 2012, EIHC had net operating loss carryforwards of approximately $500,000 which expire in 2029, 2030 and 2031.

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For the nine months ended September 30, 2011 and 2010, the income tax provision differed from the amount computed by applying the statutory United States federal income tax rate of 35% to income (loss) from continuing operations before income tax provision. The sources of the difference follow:

2011 2010
Expected tax at 35% $ (468,210 ) $ (106,238 )
Nondeductible stock-based expense 213,308 79,716
Nondeductible amortization of debt discounts 19,151 520
Change in valuation allowance and other 235,751 26,002
Actual income tax provision $ - $ -

~~As of September 30, 2011, EIHC had net operating loss carryforwards of approximately $1,100,000~~ ~~which expire in 2029, 2030 and 2031.~~

~~As of September 30, 2011 and December 31, 2010, XIOM had net operating loss carryforwards of approximately $7,450,000 and $7,300,000, respectively, which expire at various dates through 2031.~~

Changes in the ownership of EIHC ~~or XIOM~~ that have occurred in the past or that could occur in the future may limit the future utilization of these net operating loss carryforwards pursuant to federal and state tax statutes and regulations. The amount of such limitations, if any, have not been quantified by the Company.

At ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, the Company maintained a full valuation allowance against the gross deferred tax asset arising from the net operating and capital loss carry forwards because, in management’s opinion at this time, it is more likely than not, such benefits will not be realized during the respective carryforward periods.

At ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, the net deferred tax asset consists of:

							2012			2011
	2011			2010
Deferred tax asset relating to net operating loss carry forwards of EIHC	$	385,000		$	175,000		$	385,000		$	175,000

Deferred tax asset relating to net operating loss carry forwards of Xiom		2,607,500			2,555,000

Valuation Allowance		(2,992,500	)		(2,730,000	)		(385,000	)		(175,000	)

Deferred tax asset, net	$	-		$	-		$	-		$	-

12) COMMITMENTS AND CONTINGENCES

LEASES

The Company’s subsidiaries lease office, manufacturing and warehouse space pursuant to various leases on a month-to-month basis. Rent expense for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ was approximately ~~$32,771~~$8,509 and ~~$46,158,~~$13,048, respectively.

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On January 13, 2010, GSCP executed a lease agreement for office and warehouse space in Baton Rouge, Louisiana for a term of five years from February 1, 2010 to January 31, 2015 at a base rent of $1,950 per month. Under the lease agreement, GSCP has an option to renew the lease for two additional terms of three years each at base rent plus 4% increases per year. On April 1, 2011, Equisol’s subsidiary, GSCP subleased it’s Baton Rouge facility to a third party who assumed the obligations of the master lease.

In June 2011, Equisol moved its gulf coast offices to a new facility in Kemah, Texas for a term of five years with a base rent of $2,500 per month.

At ~~September 30, 2011,~~March 31, 2012, the minimum payments under operating leases for the next three years and thereafter are as follows:

Year ending December 31,	Year ending December 31,			Year ending December 31,
2011		$	7,500
2012			30,000		$	30,000
2013			30,000			30,000
2014			15,000			15,000
Thereafter			-			-
TOTAL		$	82,500		$	75,000

EMPLOYMENT AGREEMENTS

Coincident with the acquisition of GSCP on March 1, 2006, Equisol executed two employment agreements with the seller and his brother (the “Executives”) to serve as officers of the acquired company for initial terms of five years. The agreements automatically renew for one year terms unless either party provides 60 days prior written notice not to renew. Each of the two agreements provides for a base salary of at least $60,000 per year and annual payments equal to 25% of Net Income of the acquired company, as defined. Under the agreements, the Executives have agreed during the term of the agreements and for a period of two years following the Date of Termination not to compete or interfere with the Company’s business. As discussed below under LEGAL PROCEEDINGS, the Executives filed a complaint on August 4, 2010 to terminate their employment agreements for good cause and unspecified damages.

In December 2009 and January 2010, the Company, Equisol and XIOM executed three employment agreements with the three chief executive officers of EIHC, XIOM, and Equisol respectively.

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The Equisol subsidiary executed two employment agreements with its executives which, among other items, provides for EIHC stock grants in the amounts of $25,000 and $29,000 annually. Such grants are accounted for internally as intercompany obligations between Equisol and EIHC.

The agreement with EIHC’s chief executive officer has a term of two years and provides for a base salary of $198,276 per year, annual stock grants equal to $100,000, a fixed bonus of no less than $198,276 per year, and two fully vested exercisable stock options to purchase 10% of the then issued and outstanding common stock of the Company on each of the two dates that the Company attains annual revenues of $20,000,000 and $30,000,000 (at an exercise price equal to the market price on the date of the grant). The agreement provides for fringe benefits such as Company paid life insurance and 401(K) plan participation. It also contains provisions related to termination of the executive, whom may be entitled to a cash payment over 24 months equal to twice his base pay under certain circumstances.

The agreement with Equisol’s chief executive officer has a term of three years and provides for a base salary of $100,000 per year and annual stock grants equal to $50,000. The agreement also provides for certain fringe benefits.

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The agreement with XIOM’s chief executive officer has a term of three years and provides for a base salary of $120,000 per year, annual stock grants equal to $30,000, a bonus of no less than 1% of XIOM’s net income per year, and signing grants of 250.000 stock options (to vest 20% per year of service), and 500,000 additional stock options (to vest 20% each year that XIOM gross revenues exceed $10,000,000). The agreement also provides for certain fringe benefits. It also contains provisions related to termination of the executive, whom may be entitled to receive a quarter of his base compensation under certain circumstances.

On May 9, 2011, the Company issued 880,000 shares of its common stock in lieu of accrued compensation pursuant to a release agreement with a former employee. The $17,600 excess of the liability settled ($40,000) over fair value of the shares was included in other income in the three months ended March 31, 2011.

An analysis of compensation expense charged to operations for the nine months ended ~~September 30, 2011~~March 31, 2012 and accrued compensation payable at ~~September 30, 2011~~March 31, 2012 under the three employment agreements with the three executive officers of EIHC, Equisol, and XIOM follows:

	Continuing Operations						Discontinued Operation				Continuing Operations
	EIHC		Equisol		SUBTOTAL		XIOM		TOTAL		EIHC		Equisol		TOTAL

Cash Compensation
Base Salary	$	148,707	$	75,000	$	223,707	$	18,704	$	242,411	$	203,070	$	100,000	$	303,070
Minimum Bonus		148,707		-		148,707		-		148,707		198,275		-		198,275
		297,414		75,000		372,414		18,704		391,118		401,345		100,000		501,345
Other		5,568		-		5,568		-		5,568		5,568		-		5,568
Total Cash Compensation		302,982		75,000		377,982		18,704		396,686		406,913		100,000		506,913

Stock Compensation
Total Stock Compensation		75,000		37,500		112,500		7,500		120,000		100,000		50,000		150,000

Total Compensation Expense	$	377,982	$	112,500	$	490,482	$	26,204	$	516,686	$	506,913	$	150,000	$	656,913

Accrued Compensation Payable at September 30, 2011	$	457,703	$	75,000	$	532,703	$	63,942	$	571,645
Accrued Compensation Payable at March 31, 2012											$	736,034	$	122,000	$	848,034

~~Due to Xiom’s March 25, 2011 bankruptcy filing, the company has ceased accrual~~

Table of ~~any compensation expense relating to the Xiom employment agreement commencing April 1, 2011.~~Contents

CONSULTING AGREEMENT

On November 19, 2010, the Company executed a Consulting Agreement with two entities to perform certain investor relations and public relations services. The agreement provided for an initial term of three months from December 12, 2010 to March 12, 2011 and the delivery of a total of 500,000 shares of Company common stock and 1,000,000 warrants exercisable into common stock at a price of $0.25 per share to December 31, 2013 to the two entities as compensation. On December 30, 2010, the Company issued a total of 150,000 shares of its common stock to the two entities (see Note 9). On February 23, 2011, the Company issued an additional total of 150,000 shares of its common stock to the two entities (See Note 9).

On April 5, 2011, the Company entered into a Consulting Services Agreement with an entity to perform certain website and other services for the Company for a term of 60 days commencing May 16, 2011. The agreement provided for stock compensation to the consultant equal to 3,800,000 shares of Company common stock, 2,000,000 Retainer Shares payable at inceptions (the 2,000,000 shares were issued and delivered on May 16, 2011: the $59,400 fair value was expensed in the three months ended September 30, 2011) and 1,800,000 Additional Shares payable upon consultant's timely delivery of a new Company website satisfactory to management of the Company. The 1,800,000 shares were issued and delivered on July 19, 2011. The $70,200 fair value was expensed in the three months ending September 30, 2011.

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On April 25, 2011, the Company entered into an agreement with an investor relations firm to perform specified investor relations services for the Company for a term of one year. The agreement provides for quarterly compensation to the investor relations firm of $2,500 cash and 400,000 shares of Company Common Stock (400,000 shares were issued and delivered on May 16, 2011: the $14,400 fair value was expensed in the three months ending September 30, 2011). The Company has the option to terminate the agreement prior to commencement of any quarter after the first quarter with no additional quarterly compensation due the investor relations firm.

LEGAL PROCEEDINGS

From time to time, the Company and its subsidiaries are parties to legal proceedings that arise in the normal course of business. We accrue for these items as losses become probable and can be reasonably estimated. While the outcome of these proceedings cannot be predicted with certainty, management believes that the outcome will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

On August 4, 2010, two former officers of GSCP filed a complaint seeking to terminate their employment agreements for good cause and unspecified damages. On October 5, 2010, Equisol filed a Reconventional Demand against the former officers alleging, among other things, breach of contract and amended the same on October 27, 2010. Discovery has been initiated and depositions are ongoing. GSCP revenues during the first three ~~quarters~~months ended ~~September 30, 2011~~March 31, 2012 were much lower than those experienced in any quarter of the year ended December 31, 2010 as GSCP has implemented a new gross profit pricing strategy for customers.

The Company had been a party to an action commenced against EIHC and its subsidiary XIOM relating to defaulted notes of XIOM with a face value totaling $820,000. On or about November 18, 2010, the plaintiffs filed for a stipulation of dismissal. On March 25, 2011, XIOM filed for bankruptcy protection. Also on March 25, 2011, the noteholders representing the $820,000 executed Conversion Agreements with EIHC and XIOM to convert their notes payable and accrued interest into common stock in full and complete satisfaction of the notes. On April 6, 2011, 4,561,496 shares were issued.

In early 2010, Equisol closed and exited its Electrical and Instrumentation Division (E&I) located in Lake Charles, LA, because of the economic environment and resulting lack of profitability. As a result, over the year, various vendors filed liens and threatened litigation proceedings due to the lack of payment by E&I of their bills due which was a result of their customers withholding payment. Additionally, the former officer of E&I filed a complaint alleging breach of contract of his employment agreement and seeking compensation which Equisol disputes.

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13) GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements as of ~~September 30, 2011,~~March 31, 2012, the Company has a total Stockholders’ Deficit of ~~$4,434,398~~$4,894,339 and negative working capital of $~~1,492,978~~.$1,492,978. Additionally, the Company incurred a Net Loss of ~~$1,398,478~~$319,850 for the ~~nine~~three months ended ~~September 30, 2011.~~March 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The Company will continue seeking to raise money through a series of equity and debt transactions in ~~2011.~~2012.

14) DISCONTINUED OPERATIONS

As described in Note 1, the board of directors determined in November 2010 that it would be in the best interests of the stockholders to sell XIOM Corp. On March 25, 2011, Xiom filed a petition in the United States Bankruptcy Court (District of Delaware) under Chapter 7 of the United States Bankruptcy Code requesting liquidation of its assets and liabilities and effectively ceased all operations. ~~Accordingly, this operation has been presented as~~. On October 13, 2011, the U.S. Bankruptcy Court approved the trustees report of no distribution and abandonment of Xiom’s assets and closed the bankruptcy proceedings the effect of which on the consolidated financials of the Company is the cancellation of 5,305,000 Xiom options and 3,653,916 Xiom warrants, a net profit gain of $2,551,066, and a reduction of accumulated shareholders deficit of $9,076,948 all attributed to the discontinued ~~operation in the accompanying consolidated financial statements for the periods presented.~~

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For the nine months ended September ~~30,~~ 2011 and 2010, loss from discontinued operations consisted of:

	2011			2010

Revenues		16,897			436,337

Cost of revenues		4,989		$	281,070

Gross profit		11,908			155,267
Selling, general and administrative expenses		43,274			559,567

Operating income		(31,366	)		(404,300	)

Interest expense		(123,868	)		(396,684	)

Loss before income tax provision		(155,234	)		(800,984	)
Income tax provision

Loss from discontinued operation		(155,234	)	$	(800,984	)

Due to Xiom’s March 25, 2011 bankruptcy filing, the Company has ceased accrual of interest expense and other contractual obligations commencing April 1, 2011.

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The assets and liabilities of XIOM at ~~September 30, 2011~~March 31, 2012 and December 31, 2010 consisted of:

	(a) 2011			2010
Assets
Cash and cash equivalents	$	132		$	2,141
Accounts receivable, net		-			-
Inventory		-			-
Prepaid expenses and other current assets		2,000			2,000
Total current assets		2,132			4,141
Property and equipment, net		-			-
Other assets, net		36,446	(b)		36,446
Total assets	$	38,578		$	40,587

Liabilities
Current portion of debt	$	879,311	(c)		1,699,311
Accounts payable		607,160			585,307
Accrued expenses		408,648			408,648
Accrued Interest		694,525			891,030
Total liabilities	$	2,589,644		$	3,584,296

Net Assets (Liabilities)	$	(2,551,066	)	$	(3,543,709	)

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(a) Due to Xiom’s March 25, 2011 bankruptcy filing, the Company has ceased accrual of interest expense and other contractual obligations commencing April 1, 2011. Any gain from the discharge of indebtedness will be recognized upon order of the United States Bankruptcy Court.

(b) Includes a $158,500 delinquent 5% note receivable due April 10, 2010 from and investment in Structural Enhancement Technologies Corp. (451,192 shares at September 30, 2011 and December 31, 2010) at estimated net recoverable value of $25,000 at September 30, 2011 and December 31, 2010.

(c) Excludes $1,589,994 and $433,116 payable to EIHC at September 30, 2011 and 2010, respectively, eliminated in consolidation.

15) BUSINESS SEGMENTS AND MAJOR CUSTOMERS

EIHC is a holding company that operates through its wholly owned subsidiary Equisol, LLC. The Company operates in one business segment: water treatment systems equipment sales.

Substantially all revenues for ~~the nine~~thethree months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ were derived from customers located in the United States.

In the three months ended ~~September 30, 2011,~~March 31, 2012, two customers accounted for 27% and 54% of consolidated revenues.

In the nine months ended ~~September 30, 2011,~~March 31, 2012, three customers accounted for 12%, 29%, and 31% of consolidated revenues.

16) SUBSEQUENT EVENTS

~~On October 7, 2011, the company issued 2,352,941 shares of its common stock in satisfaction of $12,000 of its debt obligations to Asher Enterprises, Inc. (See Note 7).~~

~~On October 19, 2011, the company issued 4,007,633 shares of its Series A preferred stock to two company officers as settlement of $105,000 of the back salary owed to the officers.~~ The Certificate of Origination of the preferred shares provides for preferred shareholders to receive 75% of all pooled dividends. Additionally, each preferred share has a voting right equivalent to 50 votes of Common Stock and each preferred share can be converted to two shares of Common Stock at the request of the preferred shareholders or upon liquidation, dissolution, or winding up of the Company.None

~~On November 7, 2011, the company issued 4,844,444 shares of its common stock in satisfaction of $6,000 of its debt obligations and $2,720 of interest to Asher Enterprises, Inc. (See Note 7).~~

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Item 2 – Management’s Discussion and Analysis of Financial Condition And Results of Operations

SAFE HARBOR STATEMENT

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This document contains forward-looking statements, which reflect the views of our management with respect to future events and financial performance. These forward-looking statements are subject to a number of uncertainties and other factors that could cause actual results to differ materially from such statements. Forward-looking statements are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “targets” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the information available to management at this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a discussion of some of the factors that may cause actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information under “Risk Factors” beginning on page 19 and the Risk Factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2009.

The identification in this document of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Overview

The Company is the successor issuer of XIOM for purposes of the Securities Act of 1933, as amended, and the filings made by XIOM hereunder. Pursuant to Rule 12(g)-3(a) promulgated under the Securities and Exchange Act of 1934, as amended,(the “Act”), the Company is the successor issuer of XIOM with respect to XIOM Common Shares, which were registered pursuant to Section 12(g) of the Act. Pursuant to such rule, the Company Common Shares may be deemed to be registered pursuant to Section 12(g) of the Act.

On December 7, 2009, EIHC acquired Equisol, LLC (“Equisol”), a Pennsylvania limited liability company established on April 25, 2003. EIHC is the product of a reorganization as a holding company structure whereby the operating company XIOM became a direct wholly owned subsidiary of the Company. EIHC issued 18,563,693 shares to the owners of Equisol and committed to issue 8,084,942 additional shares so that the former owners of Equisol would own 40% of the fully diluted shares of EIHC. Because outstanding shares were 24,372,407 at the time of the acquisition, the sellers received the equivalent of 52% of the outstanding shares of EIHC. In addition, most of the board members and management of EIHC resigned at the time of the acquisition. Accordingly, the acquisition was accounted for as a reverse merger of EIHC into Equisol. Results of operations prior to the merger presented in these financial statements are those of Equisol. Equisol’s equity prior to the merger has been retroactively restated for the equivalent number of shares received in the merger. As part of the merger agreement, Equisol spun off to its members a wholly-owned subsidiary as of December 7, 2009. As a result, this subsidiary has been accounted for as a discontinued operation in the comparative financial statements. Also, in connection with the merger, the Company’s fiscal year end was changed from September 30 to December 31.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based upon historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates.

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We believe our critical accounting policies affect our more significant estimates and judgments used in the preparation of our consolidated financial statements. Our Annual Report on Form 10-K for the year ended December 31, 2010 contains a discussion of these critical accounting policies. There have been no significant changes in our critical accounting policies since December 31, 2010, except as noted below. See our Note 1 in our unaudited consolidated financial statements for the nine months ended ~~September 30, 2011,~~March 31, 2012, as set forth herein, and our Note 2 of those unaudited consolidated financial statements for the summary of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.

Results of Operations

For the nine months ended ~~September 30, 2011,~~March 31, 2012, the Company recorded $1,290,173 in sales and cost of sales of $673,663. This is in comparison to total sales of $2,305,281 and cost of sales of $1,133,924 for the nine months ended September 30, 2010. These amounts exclude the results of operations of the Company’s discontinued operations. Gross profit for the nine months ended ~~September 30, 2011~~March 31, 2012 was $616,510 or 47.8%. This decrease in sales and increase in gross profit from fiscal 2010 resulted primarily from general economic conditions and the Company's decision to pursue profitable sales while reducing unprofitable lines.

Selling, general and administrative expenses increased from $1,434,603 for the nine months ended September 30, 2010 to $1,642,016 for the nine months ended ~~September 30, 2011.~~March 31, 2012.

Other expense increased from $40,291 for the nine months ended September 30, 2010 to $162,238 for the nine months ended ~~September 30, 2011,~~March 31, 2012, principally due to the $94,500 excess of the fair market value of shares issued for the settlement of debt.

Loss from continuing operations for the nine months ended ~~September 30, 2011~~March 31, 2012 was ~~$1,337,744~~$319,850 compared to $303,537 for the ~~nine~~three months ended ~~September 30, 2010,~~March 31, 2011, an increase of $1,034,177. The increase in loss from continuing operations was principally due to the parent holding company selling, general, and administrative expenses, in addition to the acquisition costs of Tower Turbines Inc. which increased Equisol’s operating expenses by $150,000 in June 2011. For the third quarter, Equisol experienced reduced sales due to the fact that several jobs expected to be completed prior to quarter end were delayed until the fourth quarter. In addition, a few large new contracts that were planned to start in the third quarter have been deferred by Equisol’s customers which further reduced our revenue recognition for the quarter and into the fourth quarter.

The Company recorded a loss from discontinued operations in for the nine months ended September 30, 2011 of $155,234. As described in Note 1, the board of directors determined in November 2010 that it would be in the best interests of the stockholders to sell XIOM Corp. On March 25, 2011, Xiom filed a petition in the United States Bankruptcy Court (District of Delaware) under Chapter 7 of the United States Bankruptcy Code requesting liquidation of its assets and liabilities and effectively ceased all operations. The Company’s results of operations showed a loss of $7,187,000 in 2009 and a net loss of $1,389,000 in fiscal 2010. This decreased loss was attributable to the goodwill impairment charge in 2009 of $7,099,110, offset by a full year's selling, general, and administrative expenses of $814,000 in 2010 compared to a one month period amount of $70,000 in 2009 and interest expense in 2010 of $539,000 compared to a one month period amount of $34,000 in 2009; an impairment of property and equipment of $32,000, and a write down of a minority investment in a publicly traded entity of $25,000 in 2010.

We will need to generate significant revenues to achieve profitability, which may not occur. We expect our operating expenses to increase as a result of our plans for growth. If we do achieve profitability, we may be unable to sustain or increase profitability on a quarterly or annual basis in the future. We expect to have quarter-to-quarter fluctuations in revenues, expenses, losses and cash flow, some of which could be significant. Results of operations will depend upon numerous factors, some beyond our control, including regulatory actions, market acceptance of our products and services, new products and service introductions, and competition.

Liquidity and Capital Resources

At ~~September 30, 2011,~~March 31, 2012, we had cash and cash equivalents of ~~$20,284,~~$1,923, compared to $18,323 at December 31, ~~2010.~~2011. Working capital was a negative $1,637,110 at ~~September 30, 2011~~March 31, 2012 and negative $1,134,252 at December 31, ~~2010.~~2011. To date, we have funded our operations, including our research and development activities, through funds derived from several private placements of an aggregate of approximately $3.5 million of equity securities and convertible debt issues.

Based on our current plan of operations and the cash on hand, we believe that our current cash balances will not be sufficient to fund operations through December 31, ~~2011.~~2012.

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As of ~~September 30, 2011,~~March 31, 2012, we had an accumulated deficit of approximately ~~$12.5~~$10 million. Our ability to continue our operations as a going concern is subject to our ability to obtain required additional capital to fund our operations until our sales efforts result in positive cash flow, and there can be no assurance that we will be able to do so.

~~As of September 30, 2011, we had convertible debt obligations of our XIOM subsidiary with a face value of $850,000 which have matured and not been paid.~~ We have no capital lease obligations, no operating lease obligations other than the rent on the premises we occupy, and no material purchase obligations.

We do not believe that inflation has had a material impact on our business or operations.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, and we do not engage in trading activities involving non-exchange traded contracts. In addition, we have no financial guarantees, debt or lease agreements or other arrangements that could trigger a requirement for an early payment or that could change the value of our assets, other than those disclosed above.

Item 4 – Controls and Procedures

Item 4T – Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) that are designed to ensure t~~hat~~that information required to be included in reports submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure and to ensure that information required to be disclosed in our reports was recorded, processed, summarized and reported within the required time periods.

Our principal executive and principal financial officer concluded our disclosure controls and procedures were effective at ~~September 30, 2011.~~March 31, 2012.

Changes in Internal Control Over Financial Reporting

During the quarter ended ~~September 30, 2011,~~March 31, 2012, there were no changes in internal controls over financial reporting which materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II— OTHER INFORMATION

Item 1 – Legal Proceedings

On August 4, 2010, two former officers of GSCP, filed a complaint seeking to terminate their employment agreements for good cause and unspecified damages. On October 5, 2010, Equisol filed a Reconventional Demand against the former officers alleging, among other things, breach of contract and amended the same on October 27th, 2010. Discovery has been initiated and depositions are ongoing. GSCP revenues during the first quarter ended March 31, 2011 were much lower than those experienced in any quarter of the year ended December 31, 2010 as GSCP is reevaluating its gross profit pricing strategy for customers.

The Company has been a party to an action commenced against EIHC and its subsidiary XIOM relating to defaulted notes of XIOM with a face value totaling $820,000. On or about November 18, 2010, the plaintiffs filed for a stipulation of dismissal. On March 25, 2011, XIOM filed for bankruptcy protection. Also on March 25, 2011, the noteholders representing the $820,000 executed Conversion Agreements with EIHC and XIOM to convert their notes payable and accrued interest into common stock in full and complete satisfaction of the notes (See Note 16). . On October 13, 2011, the U.S. Bankruptcy Court approved the trustees report of no distribution and abandonment of Xiom’s assets and closed the bankruptcy proceedings the effect of which on the consolidated financials of the Company is the cancellation of 5,305,000 Xiom options and 3,653,916 Xiom warrants, a net profit gain of $2,551,066, and a reduction of accumulated shareholders deficit of $9,076,948 all attributed to the discontinued operation.

Item 1A – Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, subsection “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 which could materially affect our business, financial condition, or future results of operations. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and future results of operations. Other than as set forth below, there have been no material changes from the risk factors previously disclosed in Item 1A, subsection “Risk Factors” to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Risks Related To Our Business

EIHC has incurred losses since inception and expects to incur significant net losses in the foreseeable future and may never become profitable.

Since our inception, we have incurred significant losses and negative cash flows from operations. As of ~~September 30, 2011,~~March 31, 2012, we had an accumulated deficit of ~~$12.5~~$12.5 million,, and may incur additional losses in the next several years. We expect to spend significant resources over the next several years to enhance our technologies and to fund research and development of our pipeline of potential products. In order to achieve profitability, we must develop products and technologies that can be commercialized by us or through future collaborations. Our ability to generate revenues and become profitable will depend on our ability, alone or with potential collaborators, to timely, efficiently, and successfully complete the development of our products, which may include manufacturing and marketing our products. There can be no assurance that any such events will occur or that we will ever become profitable. Even if we do achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time, we may be unable to continue our business.

Our independent registered public auditors issued their report for the fiscal year ended December 31, 2010, with a “going concern” explanatory paragraph.

The independent registered public auditors report on their audit of our financial statements as of and for the fiscal year ended December 31, 2010 contained an explanatory paragraph indicating that the net losses we have incurred and our working capital deficit raise substantial doubt about our ability to continue as a going concern. Our going concern uncertainty may affect our ability to raise additional capital, and may also affect our relationships with suppliers and customers. Investors should carefully read the independent registered public auditor’s report and examine our financial statements.

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If we obtain additional financing, you may suffer significant dilution.

Because we have generated only limited revenues since commencing operations, we are dependent on raising additional financing through private and public financing sources and strategic alliances with larger companies to fund our short and long-term operations. As a result, we have been and likely will be required to issue securities to obtain such funds, which issuances have in the past and will in the future dilute the percentage ownership of our stockholders. In an effort to preserve cash and to better align the long term interests of our consultants and those with whom we conduct business with our long term interests, we have been issuing securities as payment in lieu of cash, which also has a dilutive effect on outstanding securities. This dilution could also have an adverse impact on our earnings per share and reduce the price of our common stock. In addition, the new securities may have rights, preferences or privileges senior to those of our common stock. In March 2010, we issued 1,880,000 shares to investors in a private placement of our common stock.

Risks Related to Our Fluctuating Operating Results, Possible Acquisitions and Management of Growth

We expect that our results of operations will fluctuate from period to period, and this fluctuation could cause our stock price to decline, causing investor losses.

Our operating results could vary significantly in the future based upon a number of factors, including many factors over which we have little or no control. We operate in a highly dynamic industry and future results could be subject to significant fluctuations. These fluctuations could cause us to fail to meet or exceed financial expectations of securities analysts or investors, which could cause our stock price to decline rapidly and significantly. Revenue and expenses in future periods may be greater or less than revenue and expenses in the immediately preceding period or in the comparable period of the prior year. Therefore, period-to-period comparisons of our operating results are not necessarily a good indication of our future performance. Some of the factors that could cause our operating results to fluctuate include:

•our ability to develop technology;

•our ability or the ability of our product discovery and development collaborators to incorporate our technology;

•our receipt of milestone payments in any particular period;

•the ability and willingness of collaborators to commercialize products incorporating our technology on expected timelines, or at all;

•our ability to enter into product discovery and development collaborations and technology collaborations, or to extend the terms of any existing collaboration agreements, and our payment obligations, expected revenue and other terms of any other agreements of this type;

•the demand for our future products and our collaborators’ products containing our technology; and

•general and industry specific economic conditions, which may affect our collaborators’ research and

development expenditures.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

On February 23, 2011, we issued 1,590,997 shares to various consultants and officers per their employment agreements. On March 24, 2011, we issued 23,728,238 to the former members of Equisol, LLC per the purchase agreement dated December 7, 2009.

~~Item~~ Item 6 –Exhibits

(a)

Exhibits

31.1

Certification of President Pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)

32.1

Certification of President Pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)

32.2

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)

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SIGNATURES

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

	ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.
	(Registrant)

Date: May 21, 2012		By:	/s/ Michael D. Parrish
			Michael D. Parrish
			Chief Executive Officer
			(duly authorized officer and principal
			executive officer)

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INDEX TO EXHIBITS

Exhibit Number		Description

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)
32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)
32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)

~~101.INS XBRL~~	~~Instance Document~~
~~101.SCH XBRL~~	~~Taxonomy Extension Schema Document~~
~~101.CAL XBRL~~	~~Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF XBRL~~	~~Taxonomy Extension Definition Linkbase Document~~
~~101.LAB XBRL~~	~~Taxonomy Extension Label Linkbase Document~~
~~101.PRE XBRL~~	~~Taxonomy Extension Presentation Linkbase Document~~

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~~SIGNATURES~~

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

	~~ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.~~
	~~(Registrant)~~

~~Date: November 21, 2011~~		~~By:~~	~~/s/ Michael D. Parrish~~
			~~Michael D. Parrish~~
			~~Chief Executive Officer~~
			~~(duly authorized officer and principal~~
			~~executive officer)~~

~~Table of Contents~~

~~INDEX TO EXHIBITS~~

~~Exhibit~~ ~~Number~~		~~Description~~

~~31.1~~		~~Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)~~
~~31.2~~		~~Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (filed herewith)~~
~~32.1~~		~~Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)~~
~~32.2~~		~~Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act (furnished herewith)~~

~~101.INS XBRL~~	~~Instance Document~~
~~101.SCH XBRL~~	~~Taxonomy Extension Schema Document~~
~~101.CAL XBRL~~	~~Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF XBRL~~	~~Taxonomy Extension Definition Linkbase Document~~
~~101.LAB XBRL~~	~~Taxonomy Extension Label Linkbase Document~~
~~101.PRE XBRL~~	~~Taxonomy Extension Presentation Linkbase Document~~

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	Three Months Ended						Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010

Revenues	$	315,645		$	729,325		$	1,290,173		$	2,305,281

Cost of Revenues		184,103			378,038			673,663			1,133,924

Gross Profit		131,542			351,287			616,510			1,171,357

Operating Expenses
Selling, general and administrative expenses		643,013			359,413			1,642,016			1,434,603
Marketing costs associated with future product development and sales incurred on acquisition of Tower Turbines, Inc. (Note 9)		-			-			150,000			-
Operating Loss		(511,471	)		(8,126	)		(1,175,506	)		(263,246	)

Other (Expense) Income
Interest Expense		(47,107	)		(14,028	)		(85,339	)		(40,445	)
Interest Income		-			-			1			154
Gain on settlement of former employee compensation liability based on terms of Mutual Termination and Release Agreement		-			-			17,600			-
Excess of the fair market value of the shares over debt settled		(94,500	)		-			(94,500	)		-
Total Other (Expense) Income		(141,607	)		(14,028	)		(162,238	)		(40,291	)

Loss from Continuing Operations before Income Tax Provision		(653,078	)		(22,154	)		(1,337,744	)		(303,537	)

Income tax provision		-			-			-			-

Loss from Continuing Operations		(653,078	)		(22,154	)		(1,337,744	)		(303,537	)
Loss from Discontinued Operations, net of income tax		-			(226,149	)		(155,234	)		(800,984	)

Net Loss	$	(653,078	)	$	(248,303	)	$	(1,492,978	)	$	(1,104,521	)

Loss per common share, basic and diluted:
Loss from continuing operations	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Loss from discontinued operations		(0.00	)		(0.00	)		(0.00	)		(0.02	)
Net Loss	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.03	)

Weighted average number of common shares outstanding, basic and diluted		90,858,373			46,946,195			85,008,858			44,635,673

Property and Equipment	$	31,552

Note receivable from and minority investment in publictly traded entity		25,000

Total	$	56,552

	2011		2010
Convertible notes sold to investors in 2007, interest at 7% (default rate of 15%), originally due April 2012 (but acceleratable since required Registration Statement was not declared effective by September 2008, one year from the final closing date of the related private offering), convertible at a conversion price of $1.50 per share	$	-	$	820,000

Convertible note sold to investor in April 2008, interest at 7%, due March 2010, convertible at a conversion price of $1.50 per share – in technical default		500,000		500,000

Convertible notes sold to investors from September 2009 to August 2009, interest at 100%, due from December 2009 to February 2010, convertible at a conversion price equal to 75% of the 30 day moving average of the closing price of the Company’s common stock immediately prior to such conversion – in technical default		350,000		350,000

Loan payable to former Chief Executive Officer of XIOM, interest at 0%, due on demand		29,311		29,311
Total	$	879,311	$	1,699,311

Issued in Year Ended	Number Outstanding		Exercise		Expiration
December 31,	and Exercisable		Price		Date

2007		666,666	$	2.00	June 2012
2007		666,666	$	2.50	June 2012
2007		154,667	$	1.00	June 2012
2007		154,667	$	1.25	Juner 2012
2008		250,000	$	1.50	March 2013
2008		250,000	$	1.80	March 2013
2008		6,250	$	2.00	March 2013
2008		5,000	$	2.50	March 2013
2009		1,100,000	$	0.75	December 31, 2012
2009		400,000	$	0.75	December 31, 2012
2010		440,000	$	0.75	December 31, 2012
2010		1,000,000	$	0.25	December 31, 2013
2011		1,200,000	$	0.10	July 8, 2014

Total		6,293,916

	2011			2010
Expected tax at 35%	$	(468,210	)	$	(106,238	)
Nondeductible stock-based expense		213,308			79,716
Nondeductible amortization of debt discounts		19,151			520
Change in valuation allowance and other		235,751			26,002
Actual income tax provision	$	-		$	-