Environmental Infrastructure (EIHC) 10-Q 2009 Q1 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________

FORM 10-Q

__________________________

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2009
	or

o 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: 333-71748

___________________________

XIOM Corp.

(Exact name of small business issuer as specified in its charter)

Delaware

(State or other jurisdiction of Incorporation or organization)

11-3460949

(IRS Employee Identification No.)

78 Lamar Street

West Babylon, New York 11704

(631) 643-4400

 (Address of principal executive offices)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [  ] 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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer		Accelerated Filer	
Non-accelerated filer		Smaller reporting company	ý

(Do not check if a smaller reporting company)

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

The number of shares outstanding of the Registrant’s Common Stock, $.0001 par value, as of May 18, 2009 was 14,847,857.

XIOM Corp.

Form 10-Q

Index

	Page
Part I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	F-1
Consolidated Balance Sheets	F-1
Consolidated Statements of Operations	F-2
Consolidated Statement of Stockholders’ Equity (Deficit)	F-3
Consolidated Statements of Cash Flows	F-4
Notes to Consolidated Financial Statements	F-5
Item 2. Management’s Discussion and Analysis or Plan of Operation	3
Item 3. Quantitative and Qualitative Disclosures About Market Risks	5
Item 4. Controls and Procedures	5
Part II. OTHER INFORMATION
Item 6.  Exhibits	7
Signatures	7
Certifications

2

Part I: Financial Information

Item 1.  Financial Statements

XIOM Corp.

Consolidated Balance Sheets

	March 31,			September 30,
	2009			2008
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	88,824		$	289,857
Accounts receivable, net of allowance for doubtful accounts of $27,000 and $30,000, respectively		87,375			158,232
Inventory		224,398			307,107
Loan receivable		156,875			153,125
Prepaid expenses		639,465			16,816
Other current assets		18,700			17,200
Total current assets		1,215,637			942,337
Fixed assets, net of accumulated depreciation		193,660			215,343
Other assets:
Intangible assets, net of accumulated amortization		441,287			433,040
Retainage receivable		51,851			47,288
Security deposits		11,445			11,445
Total other assets		504,583			491,773
Total assets	$	1,913,880		$	1,649,453
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	820,746		$	656,903
Current portion of convertible notes payable, net of unamortized discounts		504,497			-
Notes payable		14,646			12,702
Total current liabilities		1,339,889			669,605
Long-term liabilities:
Convertible notes payable, net of unamortized discounts		540,918			1,090,888
Shareholder loan		33,281			15,437
Total liabilities		1,914,088			1,775,930
Common stock subject to rescission rights		670,399			670,399
Stockholders' equity (deficit):
Common stock, $.0001 par value, 50,000,000authorized shares, 14,194,139 and 10,425,000shares, respectively, issued and outstanding (excluding 563,718 shares subject to rescission rights)		1,420			1,043
Additional paid-in capital		8,058,239			6,598,723
Retained earnings (deficit)		(8,730,266	)		(7,396,642	)
Total stockholders' equity (deficit)		(670,607	)		(796,876	)
Total liabilities and stockholders' equity (deficit)	$	1,913,880		$	1,649,453

See accompanying notes to consolidated financial statements

F-1

XIOM Corp.

Consolidated Statements of Operations

(Unaudited)

	For the Three Months						For the Six Months
	Ended March 31,						Ended March 31,
	2009			2008			2009			2008
Sales	$	297,408		$	609,692		$	589,764		$	918,973
Cost of sales		160,474			410,123			342,823			656,399
Gross Profit		136,934			199,569			246,941			262,574
Selling, general and administrative expenses		635,126			1,144,657			1,425,686			1,842,984
Operating income (loss)		(498,192	)		(945,088	)		(1,178,745	)		(1,580,410	)
Other income (expense):
Gain on conversion of debt		-			-			30,942			-
Interest expense		(90,064	)		(61,823	)		(185,821	)		(117,234	)
Total other income (expense)		(90,064	)		(61,823	)		(154,879	)		(117,234	)
Net income (loss)	$	(588,256	)	$	(1,006,911	)	$	(1,333,624	)	$	(1,697,644	)
Basic and diluted income (loss) per share	$	(0.04	)	$	(0.11	)	$	(0.10	)	$	(0.20	)
Weighted average number of shares outstanding, basic and diluted		13,137,673			8,766,556			12,757,636			8,615,776

See accompanying notes to consolidated financial statements

F-2

XIOM Corp.

Consolidated Statements of Stockholders' Equity (Deficit)

For The Six Months Ended March 31, 2009

(Unaudited)

	Common Stock				Additional		Retained			Total
	Number of		Par		Paid-In		Earnings			Shareholders'
	Shares		Value		Capital		(Deficit)			Equity (Deficit)
Balance, September 30, 2008		10,425,000	$	1,043	$	6,598,723	$	(7,396,642	)	$	(796,876	)
Issuance of shares in connection with professional service agreements		2,400,000		240		985,260		-			985,500
Issuance of shares under Employee Stock Ownership Plan for past performance		308,333		31		135,636		-			135,667
Conversion of notes maturing in 2012		320,191		32		128,044		-			128,076
Issuance of shares in connection with severance agreement		12,500		1		18,749		-			18,750
Issuance of shares in connection with payment of accrued interest		121,048		12		18,145		-			18,157
Issuance of shares under Employee Stock Ownership Plan in lieu of salaries		541,667		54		73,679		-			73,733
Issuance of shares in connection with payment of amount due to vendor		65,400		7		16,343		-			16,350
Issuance of options to employees and independent contractors		-		-		60,000		-			60,000
Issuance of options in connection with professional service agreements		-		-		2,500		-			2,500
Amendment to existing option agreements		-		-		21,160		-			21,160
Net (Loss) for the six months ended March 31, 2009		-		-		-		(1,333,624	)		(1,333,624	)
Balance, March 31, 2009		14,194,139	$	1,420	$	8,058,239	$	(8,730,266	)	$	(670,607	)

See accompanying notes to consolidated financial statements

F-3

XIOM Corp.

Consolidated Statements of Cash Flow

For The Six Months Ended March 31, 2009 and 2008

(Unaudited)

	2009			2008
Cash flows from operating activities:
Net income (loss)	$	(1,333,624	)	$	(1,697,644	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		37,044			32,680
Amortization of prepaid expenses originally established through the issuance of common shares		439,258			-
Issuance of common stock for services		-			469,583
Issuance of common stock under the Employee Stock Ownership Plan		135,667			-
Issuance of common stock as severance payment		18,750			-
Value of stock options issued to employees and independent contractors		62,500			349,997
Value of stock option amendment		21,160			-
Amortization of convertible note discounts		103,463			66,156
Gain upon conversion of debt into common stock		(30,942	)		-
Loss on investment in wholly-owned subsidiary		-			176,352
Changes in operating assets and liabilities:
Accounts receivable, net		70,857			(108,907	)
Inventory		82,709			(88,098	)
Prepaid expenses		(2,674	)		(5,515	)
Other current assets		(1,500	)		(18,049	)
Retainage receivable		(4,563	)		-
Accounts payable and accrued expenses		208,432			164,076
Total adjustments		1,140,161			1,038,275
Net cash provided (used) in operating activities		(193,463	)		(659,369	)
Cash flows from investing activities:
Additions to intangibles		(22,983	)		(56,740	)
Purchase of fixed assets		(625	)		(29,437	)
Investment in wholly-owned subsidiary, net		-			(43,852	)
Increase in loan receivable		(3,750	)		-
Net cash provided (used) by investing activities		(27,358	)		(130,029	)
Cash flows from financing activities:
Sale of restricted common stock		-			394,000
Proceeds from Officer' Convertible Notes		-			535,964
Proceeds from (repayment of) notes payable, net		1,944			(25,269	)
Proceeds from shareholder loan		17,844			7,448
Net cash provided (used) by financing activities		19,788			912,143
Net increase (decrease) in cash and cash equivalents		(201,033	)		122,745
Cash & cash equivalents, beginning of period		289,857			312,718
Cash & cash equivalents, end of period	$	88,824		$	435,463
Supplemental disclosures
Non-cash financing and investing activities:
Issuance of shares upon conversion of convertible notes	$	128,076			-
Issuance of shares for accrued expenses	$	34,507		$	72,000
Issuance of shares for services to be provided and recorded as an addition to prepaid expenses	$	1,059,233		$	300,000
Issuance of common stock under Employee Stock Ownership Plan	$	135,667			-
Value of stock option grants	$	62,500		$	123,917
Value of stock option amendment	$	21,160			-
Interest and Taxes Paid:
Interest Expense		-		$	31,505
Income Taxes		-			-

See accompanying notes to consolidated financial statements

F-4

XIOM Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended March 31, 2009

(Unaudited)

1)           BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America. However, in the opinion of management, the accompanying unaudited financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of XIOM Corp. (“XIOM”, or the “Company”) as of March 31, 2009 and the related statements of operations and of cash flows for the three months then ended. For further information, refer to the audited financial statements and related disclosures that were filed by the Company with the Securities and Exchange Commission on Form 10-KSB/A-2 for the fiscal year ended September 30, 2008, Annual Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934, File No. 333-124704.

2)           PREPAID EXPENSES

During the six months ended March 31, 2009, activity in prepaid expenses included an increase of $1,059,233 relating to professional service agreements and the issuance of common stock as described in Note 4 below.  During the three and six months ended March 31, 2009, operating results included $233,633 and $439,258, respectively, of expense related to the amortization of such costs leaving a balance of $619,975 within prepaid expenses at March 31, 2009 related to those agreements and arrangements.

3)           CONVERTIBLE NOTES PAYABLE

In October 2008, several holders of Convertible Notes Payable maturing in April 2012 with an aggregate face value of $740,000 demanded immediate payment thereof as a result of the registration statement registering the underlying common shares and warrants not being declared effective by the Securities and Exchange Commission within one year from the final closing date of the Offering, which was in June 2007.  Pursuant to the Note Agreement, these holders have elected to accelerate the maturity date and declare these Notes immediately due and payable.  Consequently, these Notes have been classified in current liabilities, net of the related unamortized discount of $235,503, and they currently accrue interest at the annual rate of 15%.

In November 2008, other holders of Convertible Notes Payable maturing in April 2012 with an aggregate face value of $232,000 elected to convert such Notes and accrued interest into 320,191 shares of the Company's common stock.  As an incentive for these holders to make this conversion, the conversion price was reduced from $1.50 to $0.75.  Additionally, the exercise prices of warrants issued with those Notes for the purchase of 154,667 shares of common stock at $2.00 per share and 154,667 shares of common stock at $2.50 per share were reduced to $1.00 and $1.25 per share, respectively.  On the date of conversion, the book value of these Notes, the related unamortized discount, and accrued interest aggregated $159,018, the fair market value of the common shares issued totaled $128,076 and the Company recorded a gain of $30,942 as other income.

F-5

4)           COMMON STOCK

In October 2008, the Company issued 1,175,000 common shares with a fair market value of $822,500, to several independent contractors in connection with professional service agreements for financial and legal services to be provided to the Company through September 2009. The fair market value of these issuances have been recorded as additions to prepaid expenses and amortized over the applicable period. See Note 2 for additional information regarding the accounting for these additions to prepaid expenses.

In November 2008, the Company issued 308,333 common shares with a fair market value of $135,667 to employees under the Company's Employee Stock Ownership Plan.  As this award was in recognition of past performance and fully vested upon issuance, the fair market value was recorded as a non-cash expense on the date of issuance.

In November 2008, the Company issued 320,191 restricted common shares with a fair market value of $128,056 in connection with the conversion of Convertible Notes Payable as described in Note 3.

In February 2009, the Company issued 12,500 restricted common shares with a fair market value of $18,750 to an employee in connection with a severance agreement.  As this award was in recognition of prior performance and fully vested upon issuance, the fair market value was recorded as a non-cash expense on the date of issuance.

In February 2009, Company issued 121,048 restricted common shares at a price of $0.15 per share to one holder of the Convertible Notes Payable in satisfaction of accrued interest due in the amount of $18,157.

In March 2009, the Company issued 1,225,000 restricted common shares with a fair market value of $163,000 to several independent contractors in connection with professional service agreements for financial and legal services to be provided to the Company through various dates through February 2011. The fair market value of these issuances have been recorded as additions to prepaid expenses and amortized over the applicable period. See Note 2 for additional information regarding the accounting for these additions to prepaid expenses.

In March 2009, the Company issued 541,667 common shares with a fair market value of $73,733 to employees under the Company's Employee Stock Ownership Plan in lieu of salaries. As this award relates to services to be provided to the Company through various dates throughout the balance of calendar 2009, the fair market value of these issuances have been recorded as additions to prepaid expenses and are being amortized over the applicable period. See Note 2 for additional information regarding the accounting for these additions to prepaid expenses.

In March 2009, the Company issued 65,400 restricted common shares at a price of $0.25 per share to a vendor in satisfaction of an invoice due in the amount of $16,350.

F-6

5)           STOCK OPTIONS

In February 2009, the Company granted options for the purchase of 1,500,000 shares of restricted common stock at $0.25 per share for a period of five years to two officers of the Company and two independent contractors. These options were 100% vested upon issuance. The Company estimated the fair value of these options to be $60,000 and, as these awards were in recognition of past performance and fully vested upon issuance, recorded a non-cash expense of that amount on the date of grant.

In February 2009, the Company granted options for the purchase of 1,250,000 shares of restricted common stock at $0.50 to $0.75 per share for a period of one to two years to several independent contractors in connection with professional services agreements. These options were 100% vested upon issuance. The Company estimated the fair value of these options to be $2,500 and, reflecting the terms of the agreements, recorded a non-cash expense of that amount on the date of grant.

In February 2009, the Company amended outstanding options for the purchase of 1,936,500 shares of common stock at exercise prices ranging from $0.75 to $1.50 per share at various dates from September 2010 through February 2013 and reduced the exercise prices to range from $0.25 to $0.58. These options were 100% vested upon issuance. The Company estimated the fair value of these options immediately before and after the amendment in accordance with the provisions of Statement of Financial Accounting Standards No. 123(R), Share Based Payment, determined the fair value to have increased by $21,160, and recorded a non-cash expense of that amount on the date of the amendment.

6)           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, the Company has a stockholders’ deficit of $670,607 as of March 31, 2009 and incurred a net loss of $588,256 and $1,333,624 for the three and six months, respectively, then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The 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.

However, the Company has seen steady sales orders for the patented industrial thermal spray technology and related powder formulas. Furthermore, the Company plans to continue raising capital through a series of private placement transactions for the balance of fiscal 2009. It also plans to continue to expand sales by significantly increasing domestic marketing efforts, including pursuing major contracts through its network of strategic alliance relationships.  As a result of these factors, management believes it will have sufficient resources to meet the Company’s cash flow requirements for at least twelve months following the date of these financial statements.

F-7

Item 2.   Management’s Discussion and Analysis and Plan of Operations.

Forward Looking Statements

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on our behalf. We are ineligible to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 because we are a “penny stock issuer”.

Results of Operations:

For the three months ended March 31, 2009 versus March 31, 2008

The Company reported sales of $297,408 and cost of sales of $160,475 for the quarter ended March 31, 2009. This is in comparison to sales of $609,692 and cost of sales of $410,123 for the quarter ended March 31, 2008. Gross profit for the quarter ended March 31, 2009 was $136,934, or 46%, a decrease of $62,635 but an increase in gross margin as a percentage of sales compared to the gross profit for the quarter ended March 31, 2008 of $199,569, or 33%.  While sales have declined due to general economic factors, the increase in gross profit as a percentage of sales is attributable to reductions in system manufacturing costs and increased margins on powder sales compared to the prior period.

General and administrative expenses decreased to $635,126 for the quarter ended March 31, 2009 from $1,144,657 for the quarter ended March 31, 2008.  This decrease of $509,531, or 45%, was due reductions in consulting engineering expense to refine the thermal spray process and coatings as well as cost containment measures in the areas of marketing expenses and general overhead.

Other expense increased to $90,064 for the quarter ended March 31, 2009 from $61,823 for the quarter ended March 31, 2008. This increase of $28,241, or 46%, is related to Convertible Notes Payable and is directly attributable to the increase in the average outstanding balance of such indebtedness during fiscal 2009 compared to the prior period.

The net loss decreased to $588,256, or $0.04 per share, during the quarter ended March 31, 2009 from a net loss of $1,006,911, or $0.11 per share, during the quarter ended March 31, 2008.  This decrease of $418,655, or 42%, related to the changes in gross profit, general and administrative expenses, and other expenses as described above.

3

For the six months ended March 31, 2009 versus March 31, 2008

The Company reported sales of $589,764 and cost of sales of $342,824 for the six months ended March 31, 2009. This is in comparison to sales of $918,973 and cost of sales of $656,399 for the six months ended March 31, 2008. Gross profit for the six months ended March 31, 2009 was $246,941, or 42%, a decrease of $15,633 but an increase in gross margin as a percentage of sales compared to the gross profit for the six months ended March 31, 2008 of $262,574, or 29%.  While sales have declined due to general economic factors, the increase in gross profit as a percentage of sales is attributable to reductions in system manufacturing costs and increased margins on powder sales compared to the prior period.

General and administrative expenses decreased to $1,425,686 for the six months ended March 31, 2009 from $1,842,984 for the six months ended March 31, 2008.  This decrease of $417,298, or 23%, was due reductions in consulting engineering expense to refine the thermal spray process and coatings as well as cost containment measures in the areas of financial consulting related to marketing expenses and general overhead.

Other expense increased to $154,879 for the six months ended March 31, 2009 from $117,234 for the six months ended March 31, 2008. This increase of $37,645, or 32%, was due to: a) An increase of $68,587, or 59%, in interest expense related to Convertible Notes Payable and is directly attributable to a comparable increase in the average outstanding balance of such indebtedness during fiscal 2009 compared to the prior period; and was offset by b) The recording of a gain of $30,942 related to the conversion of a portion of the Convertible Notes Payable into common stock during the quarter ended December 31, 2008.

The net loss decreased to $1,333,624, or $0.10 per share, during the six months ended March 31, 2009 from a net loss of $1,697,644, or $0.20 per share, during the six months ended March 31, 2008.  This decrease of $364,020, or 21%, related to the changes in gross profit, general and administrative expenses, and other expenses as described above.

Liquidity, Capital Resources and Operations:

We have, in our history, generated limited income from operations, have incurred substantial expenses and have sustained losses. In addition, we expect to continue to incur significant operating expenses through fiscal 2009. As a result, we will need to generate significant revenues to achieve profitability, which may not occur. Even 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 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.

4

During the six months ended March 31, 2009, net cash used by operating activities was $193,463 and the Company incurred a net loss of $1,333,624. Additionally, at March 31, 2009, the Company had negative working capital of $124,252 and a stockholders’ deficit of $670,606. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company recognizes that in order to fulfill its plan of operations, it will need to seek financing from outside sources.  To this end, the Company is constantly pursuing private debt and equity sources.  However, there is no assurance that any future financing, if successful, will be sufficient to allow the Company to operate profitably or successfully. It is also the intention of the Company’s management to improve profitability by significantly increasing sales of its patented thermal spray process in fiscal 2009 while maintaining reasonable levels general and administrative expenses.

Under the federal securities laws, any offering of securities must be registered unless an exemption from registration is available, and, with limited exceptions, no exemption from registration is generally available for a private placement transaction which is made concurrently with a public offering.  We may be considered to have commenced a public offering of securities on May 6, 2005, when we first filed the registration statement on Form SB-2.

In private placement transactions completed subsequent to the filing of our initial registration statement, from January 1, 2006 through October 20, 2006 (the effective date of the registration statement) we sold a total of 563,718 shares of restricted common stock from which we received gross offering proceeds of $670,399. These securities were offered and sold in reliance upon claimed private placement exemptions from registration. As a result, the purchasers of the shares may have the right to claim that the purchase transactions violated the federal securities laws. If any of these transactions did violate federal securities laws, the purchasers in those transactions may have claims against us for damages or for rescission and recovery of their full subscription price, plus interest. Although none of the purchasers of these shares has made or threatened any claim against us alleging violation of federal securities laws, in the event the purchasers of these securities successfully asserted claims for rescission it would have a substantial adverse effect on our business and on our ability to continue to operate. We may not have sufficient funds available to pay such claims, and there is no assurance that we would be able to obtain funds from other sources.  In that event, we may be forced to cease operations and liquidate our available assets to pay our liabilities, including, but not limited to, the rescission claims.

Item 3.   Quantitative and Qualitative Disclosures About Market Risks

Not applicable as we are a smaller reporting company.

 

Item 4.   Controls and Procedures

Disclosure Controls and Procedures

Management of the Company is responsible for the preparation and integrity of the consolidated financial statements appearing in our report on Form 10-Q.  The financial statements were prepared in conformity with generally accepted accounting principles appropriate in the circumstances and, accordingly, include certain amounts based on our best judgments and estimates.   Financial information in this report on Form 10-QSB is consistent with that in the financial statements.

5

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) under the Securities Exchange Act of 1934 (“Exchange Act”).  The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements.  Our internal control over financial reporting is supported by a program of reviews by management, written policies and guidelines, careful selection and training of qualified personnel, and a written Code of Business Conduct adopted by our Company’s Board of Directors, applicable to all Company Directors and all officers and employees of our Company and subsidiaries.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2009.  In making this assessment, management used the criteria set forth by [the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.  Based on our assessment as further discussed in the following paragraph, management believes that the Company maintained effective internal control over financial reporting as of March 31, 2009.

Based on this evaluation, management and the officers of the company concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by our company in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Commission rules and forms.  Additionally, management and the chief executive officer/chief financial officer concluded that our company's disclosure controls and procedures were effective to ensure that the information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is accumulated and communicated to management and its chief executive officer/chief financial officer to allow timely decisions about required disclosure.

During the six months ended March 31, 2009 we have instituted additional levels of review and have retained the services of additional financial professionals with the requisite background and experience that coordinate and are responsible for our disclosure controls and procedures.

Changes in Internal Controls over Financial Reporting

Our management, with the participation of our chief executive officer/chief financial officer, performed an evaluation as to whether any change in the internal controls over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934) occurred during the period covered by this report. Based on that evaluation, management and the chief executive officer/chief financial officer concluded that no change occurred in the internal controls over financial reporting during the period covered by this report that materially affected, or is reasonably likely to materially affect, the internal controls over financial reporting.

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Part II.  Other Information

Item 1.  Legal Proceedings

None

Item 1a.  Risk Factors

There have been no material changes to the risk factors disclosed in our Report on Form 10-K for the year ended September 30, 2008.

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

None

Item 3.  Defaults Upon Senior Securities

None

Item 4.  Submission of Matters To a Vote of Security Holders

None

Item 5.  Other Information

None
 

Item 6.  Exhibits

Index to Exhibits:

SEC
REFERENCE
NUMBER	TITLE OF DOCUMENT
31.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted, Pursuant to section 906 of the Sarbanes-Oxley act of 2002
31.2	Certifications pursuant to 18 U.S.C. Section 1350, as adopted, Pursuant to section 906 of the Sarbanes-Oxley act of 2002
32.1	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted, Pursuant to section 906 of the Sarbanes-Oxley act of 2002

Signatures

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

Date:  May 20, 2009	XIOM Corp.
		/s/ Andrew B. Mazzone
		Andrew B. Mazzone
		Chief Executive Officer/Chief Financial/Accounting Officer
		(Principal Executive Officer)

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