t


UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549








FORM 10-K








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


For the fiscal year ending December 31, 2011





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: 333-124704


ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.
 (Exact name of registrant as specified in its charter)





Delaware

32-0294481(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer 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: None
  Securities registered under Section 12(g) of the Exchange Act:
 Common Share, Par Value, $.0001
 (Title of Class)


Securities registered under Section 12(g) of the Exchange Act:  None










Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.YesoNox





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.YesoNox





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:  YesxNoo





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 oNoo





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o





Indicate by check mark whether the registrant is 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.





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





Table of Contents




Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  YesoNox





Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter: $2,293,574 on June 30, 2011
 
 Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date. There were 1,129,729 shares of the Company's common stock and 6,948,810 shares of the Company’s preferred stock outstanding on April 16, 2012.
 DOCUMENTS INCORPORATED BY REFERENCE:  None.




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ENVIRONMENTALINFRASTRUCTURE HOLDINGS CORP.
 ANNUAL REPORT ON FORM 10-K
 
 For Year Ended December 31, 2011
 
 INDEX
 
 Page No:PART IITEM 1.
BUSINESS
4ITEM 1A
RISK FACTORS
7ITEM 2.
PROPERTIES
17ITEM 3.
LEGAL PROCEEDINGS
17ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDEDRS
18PART IIITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
19ITEM 6
SELECTED FINANCIAL INFORMATION
21ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
21ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
F-1ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
26ITEM 9A(T).
CONTROLS AND PROCEDURES
26ITEM 9B.
OTHER INFORMATION
26PART III

29ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
27ITEM 11.
EXECUTIVE COMPENSATION
28ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
29ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
30ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
30PART IVITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
31Signatures

32
 
 
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  ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.
 
 INTRODUCTORY COMMENT
 
 Throughout this Annual Report on Form 10-K, the terms "we," "us," "our," and "our company" refer to ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP. ("EIHC"), a Delaware corporation and, unless the context indicates otherwise, includes our wholly-owned subsidiary Equisol, LLC (“Equisol.
 
 FORWARD-LOOKING STATEMENTS
 
 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 7.
 
 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.
 
 PART I
 
 Item1.  BUSINESS
 
 
 ABOUT OUR COMPANY
 
 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.
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  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, and a net profit gain of $2,551,066, all attributed to the discontinued operation.
 
 Subsequent Events
 
 On February 1 2012, the Company initiated a 1:200 reverse split of its common stock.
 
 Description of Our Company
 
 Equisol is an equipment solutions provider, delivering environmentally friendly products, services and engineering solutions to its customers.  Equisol has a broad range of services, including those identified below, and a national presence that makes it different from any other consulting, manufacturing, distribution, engineering or service company in the environmental industry.
 
 Consulting- On-site system reviews/audits and phone consultation services to answer questions on existing equipment systems to help customers determine the best available technology for their application needs.
 
 Design - Equipment solutions that meet both customer's application needs and their budgets. These solutions can range from simple feed and control systems to full turn-key equipment packages.
 
 Sales - Access to a wide range of products that represent the best available technology in the water industry. Equisol’s model is unique because Equisol can procure from many different suppliers instead of being tied to a few key principle suppliers that may not have the best solution for an application. Equisol can sell complete equipment systems, basic Maintenance, Repair, and Operations (MRO) components, or spare parts depending upon the need of a customer.
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  Fabrication - In order to eliminate the need to build equipment systems on-site from many different pieces and parts, Equisol can have systems fabricated as a complete turn-key skid and delivered to the plant. This provides a way to test the equipment prior to delivery and decrease the time needed for installation. Complete documentation, drawings, and system P&IDs are provided for each system.
 
 Installation - Equisol uses its expertise to make sure the right equipment is installed correctly every time. With installation, Equisol also offer start-up and commissioning services as well as operator training.  Equisol also has certified tank installers on staff to meet storage compliance and certification needs of customers.
 
 Services - Both preventative maintenance and emergency response services to ensure customers’ automation and instrumentation equipment is functioning properly.
 
 Where you can find us
 
 Our corporate offices are located at Four Tower Bridge, 200 Barr Harbor Drive, Ste. 400,West Conshohocken, PA  19428.The main telephone number is (866) 629-7646. Any information contained on our website should not be considered as part of this prospectus.  The information contained on our website is used for disseminating sales and marketing purposes.
 
 BUSINESS OF THE COMPANY – PRINCIPAL PRODUCTS AND SERVICES
 
 Environmental Infrastructure Holdings Corp was founded to acquire and manage diverse entities and subsidiaries specializing in environmentally related companies focused on the improvement of our nation’s and world’s infrastructure.  Currently the company has one wholly owned subsidiary in Equisol, LLC.
  Equisol, LLC was founded to address the recurring need of industrial and commercial businesses to maximize efficiencies and meet environmental compliance requirements.  These include the need to accurately treat their water and process systems through filtration and/or chemical injection as well as comply with the Clean Air and Clean Water Acts through air and monitoring.  Equisol is a nationally recognized equipment solutions provider delivering environmentally friendly products, services and engineering solutions to our customers.  Specializing in the Water & Wastewater Industry, the company provides:
  ·
Turnkey Solutions
  ·
Systems design, fabrication, and sales
  ·
Equipment and Systems Service and Repair
  ·
Optimization, Calibration & Maintenance
  ·
24 Hour Environmental Engineering and Consulting
  Equisol’s primary customer is the industrial end user; the Company works in conjunction with water treatment chemical companies, industry consultants, original equipment manufacturers (OEMs) and equipment distributors to market its services and expand its customer base.  Equisol’s major customers are refineries, power plants, engineering firms, and manufacturing facilities in addition to supporting commercial, municipal, as well as governmental facilities.  Additionally, the top five major water treatment companies, including GE, Nalco, and Siemens, now use Equisol to support their equipment needs.  Currently, the company has approximately 10 teammates, the majority of which are in the Gulf Coast Region between Houston and New Orleans and all have significant experience in the industry, specifically with electrical, mechanical, instrumentation skills.  The company’s other geographical strength is in the New York to DC corridor.  Because of the company’s national focus, Equisol has been able to compete and win at the corporate level in addition to our successes at the local, plant level.  Our competition are the billion dollar engineering firms and the thousands of small, regional, mom & pop firms (which we consider potential acquisition targets). Equisol has grown rapidly through acquisitions and organic growth.  Equisol was selected by Entrepreneur Magazine as one of the nation’s Top 100 Fastest Growing New Entrepreneurial Companies for 2004. According to Inc.com Magazine, the company was the 7th fastest growing privately held environmental services company in America for 2008, when it was the 601st fastest growing privately held company and we expect that ranking to continue to improve, as it did from 2007, when Equisol was the 620th fastest growing privately held company. The Entrepreneurs Forum of Greater Philadelphia named Equisol, LLC to the Philly 100 list of fastest growing companies in the region in 2009.
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  While Equisol sells nationally and has worked in most states, Canada, and internationally, part of the Company’s growth needs are to acquire on-site assets in the West and strengthen our Midwest and Southeast presence.
  Employees:
 
 As of December 31, 2011, we employed approximately 12 people.  None of our employees are covered by collective bargaining agreements.  We believe that our relations with our employees are good.
 
 Item1A. RISK FACTORS
 
 RISK FACTORS
  An investment in our common stock involves a high degree of risk.  You should carefully consider the risks and uncertainties described below and all other information contained in this prospectus before deciding to invest in shares of our common stock.  While all risks and uncertainties that we believe to be material to our business and therefore the value of our common stock are described below, it is possible that other risks and uncertainties that affect our business will arise or become material in the future.
 
 If we are unable to effectively address these risks and uncertainties, our business, financial condition or results of operations could be materially and adversely affected.  In this event, the value of our common stock could decline and you could lose part or all of your investment.
  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 December 31, 2011, we had an accumulated deficit of $9.6 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, 2011, with a “going concern” explanatory paragraph.
  Our independent registered public auditors issued their report on their audit of our financial statements as of and for the fiscal year ended December 31, 2011. The independent registered auditor’s report contains 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.
  We continue to need to obtain significant additional capital to fund our operations, and we may be unable to obtain such financing at all or on acceptable terms.  If we are unable to obtain the funds necessary to do so, we may be required to delay, scale back or eliminate our product development or may be unable to continue our business.
  The development of our products will require a commitment of substantial funds, to conduct the costly and time-consuming research, necessary to fully commercialize our products. Our future capital requirements will depend on many factors, including:
 
 •the cost of prosecuting, defending and enforcing patent claims and other intellectual property rights;
 •the cost of manufacturing our products;
 •competing technological and market developments; and
 •our ability to establish and maintain collaborative and other arrangements with third parties to assist in bringing our products to market and the cost of such arrangements.
 
 There can be no assurance that we will not need additional capital sooner than currently anticipated. We will need to raise substantial additional capital to fund our future operations.  We cannot be certain that additional financing will be available on acceptable terms, or at all.  In recent years, it has been difficult for companies to raise capital due to a variety of factors, which may or may not continue.  To the extent we raise additional capital through the sale of equity securities, the ownership position of investors in this offering and our existing stockholders could be substantially diluted.  If additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock.  Fluctuating interest rates could also increase the costs of any debt financing we may obtain.
  To date, we have incurred significant expenses in product development and administration in order to ready our products for market. There is no assurance that actual cash requirements will not exceed our estimates, in which case we will require additional financing to bring our products into commercial operation, finance working capital and pay for operating expenses and capital requirements until we achieve a positive cash flow. Additionally, more capital may be required in the event that:
 
 •we incur unexpected costs in completing the development of our technology or encounter any unexpected
 technical or other difficulties;
 •we incur delays and additional expenses as a result of technology failure;
 •we are unable to create a substantial market for our product and services; or
 •we incur any significant unanticipated expenses.
 
 Failure to successfully address ongoing liquidity requirements will have a material adverse effect on our business.  If we are unable to obtain additional capital on acceptable terms when needed, we may be required to take actions that harm our business and our ability to achieve cash flow in the future, including possibly the surrender of our rights to some technologies or product opportunities, curtailing or ceasing operations.
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  We may not successfully establish and maintain collaborative and licensing arrangements, which could adversely affect our ability to develop and commercialize our products.
  Our technological strategy includes developing our powder technology as well as establishing collaborations and licensing agreements with other companies. We may not be able to maintain or expand these licenses and collaborations or establish additional licensing and collaboration arrangements necessary to develop and commercialize our products. Even if we are able to maintain or establish licensing or collaboration arrangements, these arrangements may not be on favorable terms and may contain provisions that will restrict our ability to develop, test and market our products.  Any failure to maintain or establish licensing or collaboration arrangements on favorable terms could adversely affect our business prospects, financial condition or ability to develop and commercialize our products.
  We expect to rely at least in part on third-party collaborators to perform a number of activities relating to the development and commercialization of our products, including the manufacturing of product materials and the design for our products.  Our collaborative partners may also have or acquire rights to control aspects of our product development.  As a result, we may not be able to conduct these programs in the manner or on the time schedule we currently contemplate. In addition, if any of these collaborative partners withdraw support for our programs or products or otherwise impair their development, our business could be negatively affected.  To the extent we undertake any of these activities internally, our expenses may increase.
  In addition, our success depends on the performance of our collaborators of their responsibilities under these arrangements.  Some potential collaborators may not perform their obligations in a timely fashion or in a manner satisfactory to us. Because such agreements may be exclusive, we may not be able to enter into a collaboration agreement with any other company covering the same field during the applicable collaborative period.  In addition, our collaborators’ competitors may not wish to do business with us at all due to our relationship with our collaborators.  If we are unable to enter into additional product discovery and development collaborations, our ability to sustain or expand our business will be significantly diminished.
 
 If we are unable to create and maintain sales, marketing and distribution capabilities or enter into agreements with third parties to perform those functions, we will not be able to commercialize our products.
  We currently have limited sales, marketing or distribution capabilities.  Therefore, to commercialize our products, if and when such products are ready for marketing, we expect to collaborate with third parties to perform these functions.  We have limited experience in developing, training or managing a sales force and will incur substantial additional expenses if we decide to market any of our future products directly.  Developing a marketing and sales force is also time consuming and could delay launch of our future products.  In addition, we will compete with many companies that currently have extensive and well-funded marketing and sales operations.  Our marketing and sales efforts may be unable to compete successfully against these companies.
  The industry in which we operate is highly competitive, and competitive pressures from existing and new companies could have a material adverse effect on our financial condition and results of operations.
  The industry in which we operate is highly competitive and influenced by the following:
 
 •advances in technology;
 •new product introductions;
 •evolving industry standards;
 •product improvements;
 •rapidly changing customer needs;
 •intellectual property invention and protection;
 •marketing and distribution capabilities;
 •competition from highly capitalized companies;
 •ability of customers to invest in information technology; and
 •price competition.
  We can give no assurance that we will be able to compete effectively in our markets.  Many of our competitors have substantially greater capital resources, research and development resources and experience, manufacturing capabilities, regulatory expertise, sales and marketing resources, established relationships with business and consumer products companies and production facilities than us.
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  We may encounter difficulties managing our growth, which could adversely affect our business.
  Our strategy includes entering into and working on simultaneous technology discovery and development programs across multiple markets as well as acquiring potential new sales channels and geographic businesses.  We expect to continue to grow to meet our strategic objectives.  If our growth continues, it will continue to place a strain on us, our management and our resources.  Our ability to effectively manage our operations, growth and various projects requires us to continue to improve our operational, financial and management controls, reporting systems and procedures, and to attract and retain sufficient numbers of talented employees.  We may not be able to successfully implement these tasks on a larger scale and, accordingly, we may not achieve our research, development and commercialization goals.  If we fail to improve our operational, financial and management information systems, or fail to effectively monitor or manage our new and future employees or our growth, our business would suffer significantly.
  Compliance with the Sarbanes-Oxley Act of 2002 will result in increased expenditures.
  We are exposed to significant costs and risks associated with complying with increasingly stringent and complex regulation of corporate governance and disclosure standards. Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and new SEC regulations require a growing expenditure of management time and external resources. In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requires management’s annual review and evaluation of our internal controls, and attestations of the effectiveness of our internal controls by our independent registered auditors.  Although we are not currently required to comply with all of the requirements of Section 404, we have begun the process of documenting and testing our internal controls. This process could result in our needing to implement measures to improve our internal controls. Any failure by us to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price. This process may also require us to hire additional personnel and outside advisory services and will result in significant accounting and legal expenses.
  Risks Related To Our Industry
  Our products may become obsolete and unmarketable if we are unable to respond adequately to rapidly changing technology and customer demands.
 
 Our industry is characterized by rapid changes in technology and customer demands. As a result, our products may quickly become obsolete and unmarketable. Our future success will depend on our ability to adapt to technological advances, anticipate customer demands, develop new products and enhance our current products on a timely and cost-effective basis. Further, our products must remain competitive with those of other companies with substantially greater resources. We may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new products or enhanced versions of existing products. Also, we may not be able to adapt new or enhanced products to emerging industry standards, and our new products may not be favorably received.
  If we are unable to attract and retain key personnel and advisors, it may adversely affect our ability to obtain financing, pursue collaborations or develop our products.
  We are highly dependent on Michael Parrish, our chairman and chief executive officer, Kurt Given, the CEO of our subsidiary, Equisol, LLC, and Don Gibson and Michael Cooper, President of our subsidiary, Equisol, LLC and President of Equisol Energy Services, LLC respectively.  Our future success depends on our ability to attract, retain and motivate highly qualified management and scientific, development and commercial personnel and advisors.  To pursue our business strategy, we will need to hire or otherwise engage qualified personnel and managers, including personnel with expertise in discovery, development, manufacturing, marketing and sales.  Competition for qualified personnel is intense among companies, academic institutions and other organizations.  If we are unable to attract and retain key personnel and advisors, it may negatively affect our ability to successfully develop, test and commercialize our products and could have a material adverse effect on our proposals, financial condition and results of operations.
  We may be sued for product liability, which could adversely affect our business.
  Because our business strategy involves the development and sale by either us or our collaborators of commercial products incorporating our powder coating technology, we may be sued for product liability. We may be held liable if any product we develop and commercialize, or any product our collaborators commercialize that incorporates any of our technology, causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing, sale or consumer use.
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  If we and our collaborators commence sale of commercial products we will need to obtain additional product liability insurance, and this insurance may be prohibitively expensive, or may not fully cover our potential liabilities.  Inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or inhibit the commercialization of products developed by us or our product discovery and development collaborators.  We may be obligated to indemnify our product discovery and development collaborators for product liability or other losses they incur.  Any indemnification we receive from such collaborators for product liability that does not arise from our technology may not be sufficient to satisfy our liability to injured parties. If we are sued for any injury caused by our products or products incorporating our technology or any other products we develop, our liability could exceed our total assets.
  Risks Related To Intellectual Property and Technology
  If our products are not effectively protected by valid, issued patents or if we are not otherwise able to protect our proprietary information, it could harm our business.
  The success of our operations will depend in part on our ability and that of our licensors to:
 
 •obtain any necessary patent protections for new technologies both in the United States and in other countries with substantial markets;
 •defend patents once obtained;
 •maintain trade secrets and operate without infringing upon the patents and proprietary rights of others; and
 •obtain appropriate licenses upon reasonable terms to patents or proprietary rights held by others that are
 necessary or useful to us in commercializing our technology, both in the United States and in other countries with substantial markets.
 
 In the event we are not able protect our intellectual property and proprietary information, our business will be materially harmed.
  We may not have adequate protection for our unpatented proprietary information, which could adversely affect our competitive position.
  In addition to any patents that we may apply for in the future, we will substantially rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our competitive position.  However, others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology.  To protect our trade secrets, we may enter into confidentiality agreements with employees, consultants and potential collaborators.  However, these agreements may not provide meaningful protection of our trade secrets or adequate remedies in the event of unauthorized use or disclosure of such information.  Likewise, our trade secrets or know-how may become known through other means or be independently discovered by our competitors.  Any of these events could prevent us from developing or commercializing our products.
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  Our ability to compete in the environmental services market may decline if we do not adequately protect our proprietary technologies.
  Because of the substantial length of time and expense associated with the development of new products, we, along with the rest of the industry, place considerable importance on obtaining and maintaining patent protection for new technologies, products and processes.  Our success will depend in part on our ability to obtain and maintain intellectual property that protects our technologies and technology products.  Patent positions may be highly uncertain and may involve complex legal and factual questions for which we seek patent protection.  No consistent standard regarding the allowance or enforceability of claims in many of our pending patent applications has emerged to date.  As a result, we cannot predict the breadth of claims that will ultimately be allowed in any future patent applications, if any, including those we have in-licensed or the extent to which we may enforce these claims against our competitors. The degree of future protection for our proprietary rights is therefore highly uncertain and we cannot assure you that:
 
 •we will be the first to file patent applications or to invent the subject matter claimed in patent applications that we file, if any, which relate to the technologies upon which we rely;
 •others will not independently develop similar or alternative technologies or duplicate any of our
 technologies;
 •any of our potential patent applications will result in issued patents;
 •any of our potential patent applications will not result in interferences or disputes with third parties regarding priority of invention;
 •any patents that may be issued to us, our collaborators or our licensors will provide a basis for commercially viable products or will provide us with any competitive advantages or will not be challenged by third parties;
 •we will develop any proprietary technologies that are patentable;
 •the patents of others will not have an adverse effect on our ability to do business; or
 •new proprietary technologies from third parties, including existing licensors, will be available for licensing to us on reasonable commercial terms, if at all.
 
 In addition, patent law outside the United States is uncertain and in many countries intellectual property laws are undergoing review and revision. The laws of some countries do not protect intellectual property rights to the same extent as domestic laws. It may be necessary or useful for us to participate in opposition proceedings to determine the validity of our competitors’ patents or to defend the validity of any of our or our licensor’s future patents, which could result in substantial costs and would divert our efforts and attention from other aspects of our business.
  Technologies licensed to us by others, or in-licensed technologies, are important to our business. In particular, we depend on certain technologies relating to technology licensed to us, as well as our relationships with various communications, software and integrator companies.  In addition, we may in the future acquire rights to additional technologies by licensing such rights from existing licensors or from third parties.  Such in-licenses may be costly.  Also, we generally do not control the patent prosecution, maintenance or enforcement of in-licensed technologies.  Accordingly, we are unable to exercise the same degree of control over this intellectual property as we do over our internally developed technologies. If we cannot maintain the confidentiality of our technologies and other confidential information in connection with our collaborations, our ability to protect our proprietary information or obtain patent protection in the future may be impaired, which could have a significant adverse effect on our business, financial condition and results of operations.
  Disputes concerning the infringement or misappropriation of our proprietary rights or the proprietary rights of others could be time consuming and extremely costly and could delay our research and development efforts.
  Our commercial success, if any, will be significantly harmed if we infringe the patent rights of third parties or if we breach any license or other agreements that we have entered into with regard to our technology or business.
  We are aware of other companies and academic institutions that have been performing research in the areas of powder coating technology and water treatment.  To the extent any of these companies or academic institutions currently have, or obtain in the future, broad patent claims, such patents could block our ability to use various aspects of our discovery and development process and might prevent us from developing or commercializing newly discovered technologies or otherwise conducting our business.  In addition, it is possible that some of the new technologies that are discovered using our technology may not be patentable or may be covered by intellectual property of third parties.
 
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  We are not currently a party to any litigation, interference, opposition, protest, reexamination or any other potentially adverse governmental, ex parte or inter-party proceeding with regard to our patent or trademark positions.  However, the technology industries are characterized by extensive litigation regarding patents and other intellectual property rights.  Many technology companies have employed intellectual property litigation as a way to gain a competitive advantage.  If we become involved in litigation, interference proceedings, oppositions, reexamination, protest or other potentially adverse intellectual property proceedings as a result of alleged infringement by us of the rights of others or as a result of priority of invention disputes with third parties, we might have to spend significant amounts of money, time and effort defending our position and we may not be successful.  In addition, any claims relating to the infringement of third-party proprietary rights or proprietary determinations, even if not meritorious, could result in costly litigation, lengthy governmental proceedings, divert management’s attention and resources, or require us to enter into royalty or license agreements that are not advantageous to us.
  Should any person have filed patent applications or obtained patents that claim inventions also claimed by us, we may have to participate in an interference proceeding declared by the relevant patent regulatory agency to determine priority of invention and, thus, the right to a patent for these inventions in the United States.  Such a proceeding could result in substantial cost to us even if the outcome is favorable.  Even if successful on priority grounds, an interference action may result in loss of claims based on patentability grounds raised in the interference action.  Litigation, interference proceedings or other proceedings could divert management’s time and efforts.  Even unsuccessful claims could result in significant legal fees and other expenses, diversion of management’s time and disruption in our business.  Uncertainties resulting from initiation and continuation of any patent proceeding or related litigation could harm our ability to compete and could have a significant adverse effect on our business, financial condition and results of operations.
  An adverse ruling arising out of any intellectual property dispute, including an adverse decision as to the priority of our inventions, could undercut or invalidate our intellectual property position.  An adverse ruling could also subject us to significant liability for damages, including possible treble damages, prevent us from using technologies or developing products, or require us to negotiate licenses to disputed rights from third parties.  Although patent and intellectual property disputes in the technology area are often settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and could include license fees and ongoing royalties.  Furthermore, necessary licenses may not be available to us on satisfactory terms, if at all.  Failure to obtain a license in such a case could have a significant adverse effect on our business, financial condition and results of operations.
  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.
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  If we acquire products, technologies or other businesses, we will incur a variety of costs, may have integration difficulties and may experience numerous other risks that could adversely affect our business.
  To remain competitive, we plan to acquire additional businesses, products and technologies and we currently are actively seeking material acquisitions that complement our business.  We have limited experience in identifying acquisition targets, successfully acquiring them and integrating them into our current infrastructure.  We may not be able to successfully integrate any businesses, products, technologies or personnel that we might acquire in the future without a significant expenditure of operating, financial and management resources, if at all.  In addition, future acquisitions could require significant capital infusions and could involve many risks, including, but not limited to, the following:
 • we may have to issue convertible debt or equity securities to complete an acquisition, which would dilute our stockholders and could adversely affect the market price of the common stock;
 • an acquisition may negatively impact our results of operations because it may require us to incur large one-time charges to earnings, amortize or write down amounts related to goodwill and other intangible assets, or incur or assume substantial debt or liabilities, or it may cause adverse tax consequences, substantial depreciation or deferred compensation charges;
 •we may encounter difficulties in assimilating and integrating the business, technologies, products, personnel or operations of companies that we acquire;
 •certain acquisitions may disrupt our relationship with existing collaborators who are competitive to the acquired business;
 •acquisitions may require significant capital infusions and the acquired businesses, products or technologies may not generate sufficient revenue to offset acquisition costs;
 •an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management;
 •acquisitions may involve the entry into a geographic or business market in which we have little or no prior experience; and
 •key personnel of an acquired company may decide not to work for us.
 
 Any of the foregoing risks could have a significant adverse effect on our business, financial condition and results of operations.
  To the extent we enter markets outside of the United States, our business will be subject to political, economic, legal and social risks in those markets, which could adversely affect our business.
  There are significant regulatory and legal barriers in markets outside the United States that we must overcome to the extent we enter or attempt to enter markets in countries other than the United States.  We will be subject to the burden of complying with a wide variety of national and local laws, including multiple and possibly overlapping and conflicting laws.  We also may experience difficulties adapting to new cultures, business customs and legal systems.  Any sales and operations outside the United States would be subject to political, economic and social uncertainties including, among others:
 
 •changes and limits in import and export controls;
 •increases in custom duties and tariffs;
 •changes in currency exchange rates;
 •economic and political instability;
 •changes in government regulations and laws;
 •absence in some jurisdictions of effective laws to protect our intellectual property rights; and
 •currency transfer and other restrictions and regulations that may limit our ability to sell certain products or repatriate profits to the United States.
  Any changes related to these and other factors could adversely affect our business to the extent we enter markets outside the United States.
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  Risks Related to our Common Stock; Liquidity Risks
  The price of our common stock is expected to be volatile and an investment in common stock could decline in value.
  The market price of our common stock, and the market prices in general for securities of companies in our industry, are expected to be highly volatile.  The following factors, in addition to other risk factors described in this filing, and the potentially low volume of trades in common stock, may have a significant impact on the market price of common stock, some of which are beyond our control:
 
 •announcements of technological innovations and discoveries by us or our competitors;
 •developments concerning any research and development, manufacturing, and marketing collaborations;
 •new products or services that we or our competitors offer;
 •actual or anticipated variations in operating results;
 •the initiation, conduct and/or outcome of intellectual property and/or litigation matters;
 •changes in financial estimates by securities analysts;
 •conditions or trends in technology or software industries;
 •changes in the economic performance and/or market valuations of other technology companies;
 •our announcement of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
 •additions or departures of key personnel;
 •global unrest, terrorist activities, and economic and other external factors; and
 •sales or other transactions involving our common stock.
 
 The stock market in general has recently experienced relatively large price and volume fluctuations.  In particular, market prices of securities of technology companies have experienced fluctuations that often have been unrelated or disproportionate to the operating results of these companies.  Continued market fluctuations could result in extreme volatility in the price of common stock, which could cause a decline in the value of common stock.  Prospective investors should also be aware that price volatility may be worse if the trading volume of common stock is low.
  We do not expect to pay cash dividends in the foreseeable future.
  We currently intend to retain any future earnings to finance the growth and development of our business; therefore, we do not expect to pay any cash dividends in the foreseeable future. Any future dividends will depend on our earnings, if any, and our financial requirements.
  It is not anticipated that there will be an active public market for shares of our common stock in the near term, and you may have to hold your shares of common stock for an indefinite period of time. You may be unable to resell a large number of your shares of common stock within a short time frame or at or above their purchase price.
  There is not an active public or other trading market for our common stock, and there can be no assurance that any market will develop or be sustained after the completion of this offering.  Because our common stock is expected to be thinly traded, an investor cannot expect to be able to liquidate its investment in case of an emergency or if it otherwise desires to do so.  Large transactions in common stock may be difficult to conduct in a short period of time.  Further, the sale of shares of common stock may have adverse federal income tax consequences.
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  It is more difficult for our shareholders to sell their shares because we are not, and may never be, eligible for the Nasdaq Stock Market or any National Stock Exchange.
  We are not presently, nor is it likely that for the foreseeable future we will be, eligible for inclusion in the Nasdaq Stock Market or for listing on any United States national stock exchange.  To be eligible to be included in the Nasdaq Stock Market, a company is required to have not less than $4,000,000 of stockholders’ equity, a public float with a market value of not less than $5,000,000, and a minimum bid price of $4.00 per share. At the present time, we are unable to state when, if ever, we will meet the Nasdaq Stock Market application standards.  Unless we are able to increase our net worth and market valuation substantially, either through the accumulation of surplus out of earned income or successful capital raising financing activities, we will not be able to meet the eligibility requirements of the Nasdaq Stock Market.  As a result, it will more difficult for holders of our common stock to resell their shares to third parties or otherwise, which could have a material adverse effect on the liquidity and market price of our common stock.
  Substantial future issuances of our common stock could depress our stock price.
  The market price for our common stock could decline, perhaps significantly, as a result of issuances of a large number of shares of our common stock in the public market or even the perception that such issuances could occur.  Sales of a substantial number of shares of common stock, or the perception that holders of a large number of shares intend to sell their shares, could depress the market price of our common stock.
  Directors and officers of the Company will have a high concentration of our common stock ownership.
  Based on the aggregate number of shares of our common stock that are outstanding as of March 30, 2012, our officers and directors beneficially own approximately 52.09% of our outstanding common stock and 100% of our outstanding preferred stock.  Such a high level of ownership by such persons may have a significant effect in delaying, deferring or preventing any potential change in control of the Company.  Additionally, as a result of their high level of ownership, our officers and directors might be able to strongly influence the actions of our Board of Directors, and the outcome of actions brought to our stockholders for approval. Such a high level of ownership may adversely affect the voting and other rights of our stockholders.
  We do not expect to make dividend payments in the foreseeable future.
  The Company has never declared or paid any cash dividends on its common stock. For the foreseeable future, the Company intends to retain any earnings to finance the development and expansion of its business, and it does not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including the Company's financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the board of directors consider relevant.
  The bankruptcy of our wholly-owned subsidiary, XIOM Corp may have unforeseen consequences for our stock price.
  On March 25, 2011, the XIOM Corp subsidiary of Environmental Infrastructure Holdings Corp. 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. As of the date of the filing, XIOM had estimated assets of $340,745 and liabilities of $4,044,878. As a result of the bankruptcy filing, 12 XIOM noteholders decided to exercise the convertibility provision of their notes, and entered into a Debt Conversion agreement with EIHC.  The agreements convert $1,140,373 of principal and interest into 4,561,496 shares of the Company’s common stock at a conversion price of $0.25 per share. Other noteholders may convert their XIOM notes into EIHC stock, resulting in further dilution of your shares.
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  The fact that we are subject to Penny Stock Regulation may make it less appealing for a broker-dealer to engage in transactions involving our securities.
  The Commission has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. As a result, our common stock is subject to rules that impose additional sales practice requirements on broker dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by such rules, the broker dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Commission relating to the penny stock market. The broker dealer must also disclose the commission payable to both the broker dealer and the registered representative, current quotations for the securities and, if the broker dealer is the sole market maker, the broker dealer must disclose this fact and the broker dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Broker-dealers must wait two business days after providing buyers with disclosure materials regarding a security before effecting a transaction in such security. Consequently, the “penny stock” rules restrict the ability of broker dealers to sell our securities and affect the ability of investors to sell our securities in the secondary market and the price at which such purchasers can sell any such securities, thereby affecting the liquidity of the market for our common stock.
  Stockholders should be aware that, according to the Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:
 
 ·
control of the market for the security by one or more broker-dealers that are often related to the promoter or issuer;
 ·
manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
 ·
“boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;
 ·
excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
 ·
the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
 ·
Our management is aware of the abuses that have occurred historically in the penny stock market.
 
 Item2. PROPERTY
 
 Equisol, LLC leases approximately 2,000 square feet of manufacturing and warehouse facility in Kemah, TX pursuant to a five-year lease at $2,500 per month and a corporate office in West Conshohocken, PA for $180 per month on a two year lease. Rent expense for fiscal 2011 and 2010 was approximately $9,246 and $60,993, respectively, per annum. The manufacturing and warehouse facility is adequate for the needs of the Company at this time. However, if it were necessary to expand the manufacturing and warehouse capacity, the Company would need to relocate its facilities, at an additional cost per month. Such location would be relatively easy to locate, however the initial cost of moving might be substantial.
 
 Item3. 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.
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  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 ended September 30, 2011 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. 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, and a net profit gain of $2,551,066, all attributed to the discontinued operation.
 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.
 
 We are not aware of any other litigation, pending, or threatened at this time. We may occasionally become subject to legal proceedings and claims that arise in the ordinary course of our business. It is impossible for us to predict with any certainty the outcome of pending disputes, and we cannot predict whether any liability arising from pending claims and litigation will be material in relation to our consolidated financial position or results of operations.
 
 Indemnification of Officers and Directors
 
 At present we have not entered into individual indemnity agreements with our Officer or Director.  However, our revised By-Laws and Certificate of Incorporation provide a blanket indemnification that we shall indemnify, to the fullest extent under Delaware law, our directors and officers against certain liabilities incurred with respect to their service in such capabilities.  In addition, the Certificate of Incorporation provides that the personal liability of our directors and officers and our stockholders for monetary damages will be limited.
 
 Item 4.  SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS
 None.
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 Part II
 
 Item 5.  MARKETFOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 General:
 
 The authorized capital stock consists of 125,000,000 shares of common stock, par value $.0001 per share and 25,000,000 shares of preferred stock, par value $.0001 per share. As of March 30, there were 1,129,729 shares of Common Stock and 6,948,810 shares of the Company’s preferred stock issued and outstanding.  This does not include shares underlying warrants or options yet to be exercised.  The following summary description of the Common Stock is qualified in its entirety by reference to the Company's Certificate of Incorporation and all amendments thereto.
 Common Stock:
 
 Our authorized capital stock consists of 125,000,000 shares of common stock, par value $.0001 per share. Each share of Common Stock entitles its holder to one non-cumulative vote per share and, the holders of more than fifty percent (50%) of the shares voting for the election of directors can elect all the directors if they choose to do so, and in such event the holders of the remaining shares will not be able to elect a single director.  Holders of shares of Common Stock are entitled to receive 25% of such pooled dividends, as the board of directors may, from time to time, declare out of Company funds legally available for the payment of dividends.  Upon any liquidation, dissolution or winding up of the Company, holders of shares of Common Stock are entitled to receive pro rata all of the assets of the Company available for distribution to stockholders.
 
 Stockholders do not have any pre-emptive rights to subscribe for or purchase any stock, warrants or other securities of the Company.  The Common Stock is not convertible or redeemable.  Neither the Company's Certificate of Incorporation nor its By-Laws provide for pre-emptive rights.
 
 Preferred Stock:
 
 Our authorized capital stock consists of 25,000,000 shares of preferred stock, par value $.0001 per share. 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.
 
 Stockholders do not have any pre-emptive rights to subscribe for or purchase any stock, warrants or other securities of the Company.  The Preferred Stock is not convertible or redeemable.  Neither the Company's Certificate of Incorporation nor its By-Laws provide for pre-emptive rights.
  Price Ranges of Our Common Stock:
 
 Market Information:
 
 The Company’s Common Stock is traded on the NASD OTC Bulletin Board under the symbol “EIHC.OB” commencing on or about January 27, 2010.
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  There is currently a limited trading market for the Company’s Common Stock with the price being very volatile.  The following table shows the reported high and low closing prices per share, accounting for the 1:200 reverse split effective 3 March 2012, for our common stock through December 31, 2011.  Since that date through March 30, 2012, the closing price per share has been between $0.075 and $0.026.
 
 High


LowFiscal 2011:Fourth quarter

$
2.58


$
0.24Third quarter


9.00


$
2.64Second quarter


11.00



3.12First quarter


15.00



5.26Fiscal 2010:Fourth quarter

$
20.00



4.00Third quarter


18.00


$
2.00Second quarter


33.00



14.00First quarter


60.00



28.00
 
 Liquidation:
 
 In the event of a liquidation of the Company, all stockholders are entitled to a pro rata distribution after payment of any claims.
 
 Dividend Policy:
 
 The Company has never declared or paid cash dividends on its common stock and anticipates that all future earnings will be retained for development of its business.  The payment of any future dividends will be at the discretion of the Board of Directors and will depend upon, among other things, funds legally available, future earnings, capital requirements, the financial condition of the Company and general business conditions.
 
 Stock Transfer Agent:
 
 Our transfer agent and registrar of the Common Stock is Manhattan Transfer Registrar Company, P.O. Box 756, Miller Place, NY  11764, (631) 928-7655,(631) 928-6171 Fax
  Sales of Unregistered Securities
 
 On 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 and the Company committed to issue 150,000 shares of its common stock (issued September 15, 2010) to a consultant for services rendered.  On 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.  On January 31, 2010, February 28, 2010, and June 30, 2010, the Company committed to issue a total of 253,382 shares of its common stock (issued September 15, 2010) pursuant to the three employment agreements discussed in Note 13.  On September 20, 2010, the Company issued 250,000 shares of its common stock for consulting services rendered.  Of the 9,268,797 shares committed to be issued at June 30, 2010, 1,123,855 shares were issued in September 2010. The remaining 8,144,942 shares committed to be issued were issued on 23 March 2011. In April, 2010, the Company issued 750,000 shares to an investor for an investment of $125,000.
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  Purchase of Equity Securities by the Small Business Issuer and Affiliated Purchasers
 
 We did not repurchase any shares of our common stock during the year ending December 31, 2011.
 
 Equity Compensation Plan Information
 
 None
 
 Item6. SELECTED FINANCIAL INFORMATION
 
 Not required
 
 Item7.MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION.
 
 Overview
 
 We currently do not plan to conduct any business other than the business in which EIHC and its subsidiary EQUISOL are engaged..
 
 Plan of Operations:
 
 The Company’s plans to move into an expansion phase were adversely affected by the weakened economy during fiscal 2011.  The Company focused on removing unprofitable lines and customers while divesting impaired assets as well as underperforming employees with the goal of reducing selling, general, and administrative costs.  As a result, the overall annual revenue decreased from $3.3 million in 2010 to $1.8 million in 2011, while the Company’s gross profit declined from $1.5 million to $839 thousand. Going forward, the focus of the Company is to expand organically through increased sales and improved productivity by holding down selling, general, and administrative costs.  The parent company will begin to acquire other entities focused on environmental equipment manufacturing, engineering, services, and consulting as well as geographic expansion throughout North America.  Longer term, we anticipate to pursue such acquisitions internationally.
 The Company has approximately $1.5 million of firm contracts in house. The Company needs to raise additional funds to operate for the next 3 months even if it does not sell any systems or services.
 
 The Company is not able to accurately forecast sales for fiscal 2011. The Company does not have sufficient cash resources and revenue to adequately support overseas marketing plans for the foreseeable future. Therefore, without increasing revenues or acquiring additional capital, it is likely that our overseas marketing plans will have to proceed at a slower rate.
  Critical Accounting Policies
 
 Management’s 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 financial statements requires management 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, management evaluates its estimates, including those related to impairment of long-lived assets, finite lived intangible assets, accrued liabilities and certain expenses. We base our estimates on historical experience and on 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. Actual results may differ materially from these estimates under different assumptions or conditions.
 
 Our significant accounting policies are summarized in Note 3 of our audited financial statements for the year ended December 31, 2011. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:
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  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 is satisfied through credit approvals. Delivery criteria is 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 grossprofit 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.
 
 INVENTORY
 
 Inventory consists primarily of various parts, materials and supplies utilized in the assembly of water treatment systems and is valued at the lower of cost (first-in, first-out) or market.
 
 PROPERTY, EQUIPMENT AND DEPRECIATION
 
 Property and equipment is stated at cost. 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.
 
 SHARE BASED PAYMENTS
 
 Share based payments are made primarily to 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. These compensation costs are capitalized as prepaid expenses and expensed over the remaining term of the respective contracts.
 
 Common stock options granted to employees are issued for past services from time to time, at the discretion of the Board of Directors, and the value of each 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.
  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. Management believes that there are no impaired long-lived assets at December 31, 2011 and 2010.
  22
 Table of Contents
  Recently Adopted 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.
 
 Results of Operations:
 
 For the Fiscal Years Ended December 31, 2011 Versus December 31, 2010
 
 For the fiscal year ended December 31, 2011, the Company recorded $1,784,631 in sales and cost of sales of $944,340. This is in comparison to total sales of $3,272,183 and cost of sales of $1,877,951 for the fiscal year ended December 31, 2010. These amounts exclude the results of operations of the Company’s discontinued operations. Gross profit for fiscal 2011 was $839,291 or 47%, an decrease of $554,941 compared to the gross profit in fiscal 2010 of $1,394,232 (which was 43% of revenue).  This decrease in sales and increase in gross profit in fiscal 2011 resulted primarily from general economic conditions and the Company's decision to pursue profitable sales.
 
 Selling, general and administrative expenses decreased from $2,350,302 in fiscal 2010 to $2,229,131 in fiscal 2011. This decrease resulted primarily from reduction in overhead and payroll.
 
 Other expense increased from $83,000 in fiscal 2011 to show a gain (Other Income) of $591,931in fiscal 2011, principally due to the gain on settlement of debt and other liabilities.
 
 Loss from continuing operations for the year ended December 31, 2011 was $947,909 compared to $1,039,150 for the year ended December 31, 2010, a decrease of $91,241.
 
 The Company recorded a gain from the disposition of discontinued operations in fiscal 2011 of $2,551,066,. In November 2010, the Company’s board of directors determined that a sale of its XIOM subsidiary was in the best interests of the Company’s shareholders.  The Company’s results of operations showed a net gain of $1,447,923 in 2009 as compared to a net loss of $2,428,584 in fiscal 2010. This increased gain was attributable to the discharge of the Xiom Chapter 7 liquidation as well as the gain on settlement of the conversion of debt to shares of the Company’s common stock.
 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.
  23
 Table of Contents
  Liquidity, Capital Resources and Operations:
 
 Our liquidity comes from two sources.  Internally, if we increase sales, we would be able to increase the acquisition of raw materials and increase our production as well as hire more employees to increase our billable services.  This would in turn increase the short-term liquidity of the Company.  Externally, we may gain long-term liquidity from the sale of common stock and from the exercise of warrants by the shareholders from the recent private placements.
 
 There are no known trends, events or uncertainties that have or are reasonably likely to have a material impact on the Company’s short-term or long-term liquidity, other than the inability to sell our products, or the failure to sell any of future shares of common stock or the lack of exercise of the warrants by the shareholders.  Near term the current turmoil in financial markets may make new fund raising more difficult than in the recent past.
 
 At December 31, 2011, the Company had negative working capital of $1,134,000. During the fiscal years ended December 31, 2011, net cash used by operating activities was $176,000; in fiscal 2010, operating activities used $277,000. The Company incurred net losses of $2,429,000 for the fiscal year ended December 31, 2011 an improvement from the fiscal year ended December 31, 2010 when net losses were $7,835,000. Additionally, at December 31, 2011, the Company had a Stockholders’ Deficit of $4,894,000.
 
 These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company anticipates 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. The Company raised $68,000 from a borrowing from a private investor in February, 2011 convertible into common stock of the Company with a maturity date of November 2011 and 8% interest per annum. It is also the intention of the Company’s management to improve profitability by significantly increasing sales of its environmental services in fiscal 2011 while maintaining reasonable levels of general and administrative expenses as the company grows.
 
 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 $670,000. 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.
 
 In connection with the acquisition of Equisol, LLC, the Company raised $705,000 in a private placement. These funds were used to pay for costs of the acquisition and working capital needs such as outstanding and overdue payables.
 
 24
 Table of Contents
 
 Inflation
 
 The amounts presented in the financial statements do not provide for the effect of inflation on the Company’s operations or its financial position. Amounts shown for machinery, equipment and leasehold improvements and for costs and expenses reflect historical cost and do not necessarily represent replacement cost. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
 
 Off-Balance Sheet Arrangements
 
 We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
  25
 Table of Contents
 
 
 Item8.FINANCIAL STATEMENTS
 
 Index To Consolidated Financial Statements
 
 Consolidated Balance Sheets as of December 31, 2010 and 2009
F-2Consolidated Statements of Operations for the years endedDecember 31, 2010 and 2009
F-3Consolidated Statements of Changes in Stockholders’Deficit for the years ended December 31, 2010 and 2009
F-4Consolidated Statements of Cash Flows for the years endedDecember 31, 2010 and 2009
F-5Notes to Consolidated Financial Statements
F-6
 
 F-1
 Table of Contents
   EnvironmentalInfrastructure Holdings Corp. Consolidated Balance Sheets As of December 31, 2011 and 2010 Unaudited
 Unaudited2011


2010ASSETSCurrent AssetsCash and cash equivalents


61,177



18,323Accounts receivable, net of allowance for doubtful accounts of $205,000 and $205,000, respectively


185,844



481,337Inventory


25,000



94,841Prepaid expenses and other current assets


-



-Total Current Assets


272,021



594,501Property and equipment, net of accumulated depreciation and amortization


685



8,099Intangible assets, net of accumulated amortization and impairment allowances


32,000



275,464Assets of discontinued operation held for sale


-



40,587Total Assets


304,706



918,651LIABILITIES AND STOCKHOLDERS' DEFICITCurrent LiabilitiesCurrent portion of debt


470,956



376,612Current portion of secured promissory note payable to related party


98,201



107,202Accounts payable


574,181



626,616Accrued expenses


130,352



70,121Accrued compensation


625,454



417,358Accrued interest


179,902



130,844Total Current Liabilities


2,079,046



1,728,753Long term portion of debt


218,008



199,941Long term portion of secured promissory note payable to a related party


300,000



300,000Liabilities of discontinued operation held for sale


-



3,584,296Total Liabilities


2,597,054



5,812,990COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' DEFICITPreferred stock, $.0001 par value; authorized 25,000,000 shares, 6,948,810 issued


695



-Common stock, $.0001 par value; authorized 125,000,000 shares: issued and outstanding 538,039 and 48,509,795 shares respectively


54



4,851Committed to be issued 0 and 67,383 shares respectively


7



2,537Additional paid in capital


7,290,711



6,130,010Deficit


(9,583,814
)


(11,031,737
)Total Stockholders' Deficit


(2,292,348
)


(4,894,339
)Total Liabilities and Stockholder's Deficit


304,706



918,651
  See accompanying notes to consolidated financial statements.
  F-2
 Table of Contents
  EnvironmentalInfrastructure Holdings Corp. Consolidated Statements of Operations For the Years Ended December 31,
 Unaudited2011


2010Revenues


1,783,631



3,272,183Cost of Revenues


944,340



1,877,951Gross Profit


839,291



1,394,232Operating ExpensesMarketing Costs associated with future product development and sales incured on acquisition of Tower Turbines, Inc.


150,000Selling, general and administrative expenses


2,229,131



2,350,302Operating Loss


(1,539,840
)


(956,070
)Other (Expense) IncomeInterest Expense


(116,437
)


(83,235
)Interest Income


530



155Impairment of goodwill related to Gulf State Corporation Subsidiary


(237,464
)Excess of fair market value of shares over debt settled


(94,500
)Gain on settlement of former employee compensation liability based on terms of Mutual Termination and Release Agreement


1,039,802Total Other (Expense) Income


591,931



(83,080
)Loss from Continuing Operations before Income Tax Provision


(947,909
)


(1,039,150
)Income tax provision


-



-Loss from Continuing Operations


(947,909
)


(1,039,150
)Loss from Discontinued Operations, net of income tax


(155,234
)


(1,389,434
)Gain on disposition of discontinued operations


2,551,066Net Gan/(Loss)


1,447,923



(2,428,584
)Loss per common share, basic and diluted:Loss from continuing operations


(2
)


(7
)Loss from discontinued operations


(0
)


-Net Loss


(3
)


(7
)Weighted average number of common shares outstanding, basic and diluted (post 1:200 reverse split)


395,586



343,731
  See accompanying notes to consolidated financial statements.
  F-3
 Table of Contents
  EnvironmentalInfrastructure Holdings Corp. Consolidated Statements of Stockholders' Deficit For the Years Ended December 31, 2011 and 2010 (Adjusted to retroactively reflect 1 for 200 reverse stock split effective February 1, 2012) (Unaudited)
 Series A Preferred Stock


Common Stock, $.0001 Par Value


Additional





TotalIssued Shares


Issued Shares


Shares Committed to be Issued


Paid In


Accumulated


Stockholders'Shares


Par Value


Shares


Par Value


Shares


Par Value


Capital


Deficit


DeficitBalance, 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



-



109,990Conversion of debt and accrued interest at January 22, 2010


-



-



3,018



-



-



-



162,972



-



162,972Sale of shares in May 2010


-



-



3,750



-



-



-



125,000



-



125,000Exercise 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



-



181,900Issuance of shares and shares committed to be issued pursuant to employment agreements


-



-



10,619



1



6,455



1



179,759



-



179,761Interest expense charge resulting from reduction in conversion price of convertible notes and exercise price of warrants pursuant to December 3, 2010 agreement


-



-



-



-



-



-



26,826



-



26,826Net 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



-



26,520Issuance of shares to former employee pursuant to Mutual Termination and Release Agreement


-



-



750



-



-



-



4,500



-



4,500Conversion of debt and accrued interest on March 25, 2011


-



-



22,808



2



-



-



150,985



-



150,987Issuance of shares and shares committed to be issued  for consulting services


-



-



34,750



4



3,600



-



205,812



-



205,816Issuance of shares to former employee pursuant to Mutual Termination and Release Agreement


-



-



4,400



-



-



-



26,400



-



26,400Benficial conversion feature relating to issuance of debt on May 5, 2011 and June 17, 2011


-



-



-



-



-



-



29,250



-



29,250Shares issued in connection with acquisition of Tower Turbines, Inc. on June 1, 2011


-



-



10,000



1



-



-



99,999



-



100,000Shares 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



-



112,000Shares 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



-



37,500Conversion of EIHC debt due Asher Enterprises, Inc. into Company common stock


-



-



55,860



6



-



-



70,714



-



70,720Benficial conversion feature relating to issuance of debt on July 14, 2011


-



-



-



-



-



-



58,375



-



58,375Issuance of Series A Preferred Stock in satisfaction of accrued salaries payable to two officers


6,948,810



695



-



-



-



-



114,305



-



115,000Issuance of shares and shares committed to be issued pursuant to employment agreements


-



-



13,576



1



62,783



6



216,993



-



217,000Net loss for year ended December 31, 2011


-



-



-



-



-



-



-



1,447,923



1,447,923Balance, December 31, 2011


6,948,810


$
695



538,039


$
54



67,383


$
7


$
7,290,711


$
(9,583,814
)

$
(2,292,348
)
 
 See accompanying notes to consolidated financial statements.
  F-4
 Table of Contents
   Environmental Infrastructure Holdings Corp. ConsolidatedStatements of Cash Flows For the Years Ended December 31,
   Unaudited2011


2010Cash Flow from Operating ActivitiesNet Income (Loss)

$
1,447,923


$
(2,428,584
)Loss from discontinued operations


(155,234
)


1,389,434Gain on disposition of discontinued operations


(2,551,066
)


-Adjustments to reconcile net loss to cash used in operating activities:Provision for doubtful accounts


-



45,000Depreciation and amortization


15,685



9,393Amortization of debt discounts


54,718



5,332Issuance of stock for services


581,951



361,661Excess of 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
)


-Issuance of Series A Preferred Stock in satisfaction of accrued salaries payable to two officers


115,000



-Net change in operating assets and liabilities:Accounts Receivable


(295,493
)


(81,252
)Inventory


(69,841
)


78,814Prepaid expenses and other current assets


-



11,664Accounts payable


(52,435
)


182,921Accrued expenses


60,231



(26,212
)Accrued compensation


208,096



417,358Accrued interest


49,058



42,561Net cash provided by (used in) operating activities - continuing operations


(364,507
)


8,090Net cash used in operating activities - discontinued operations


(2,009
)


(184,017
)Net cash used in operating activities


(366,516
)


(175,927
)Cash Flow from Investing ActivitiesIntangible assets additions


-



-Property and equipment additions


-



(1,573
)Net cash provided by (used in) investing activities - continuing operations


-



(1,573
)Net cash provided by (used in) investing activities - discontinued operations


-



(5,075
)Net cash provided by (used in) operating activities


-



(6,648
)Cash Flow from Financing ActivitiesIncreases in debt


269,731



-Repayment of  debt


(48,208
)


(685,878
)Loans from related party


(9,000
)


407,202Loans to XIOM (discontinued operation)


-



(168,644
)Proceeds from private placement and private offerings of common stock, net of offering costs


-



234,990Net cash provided by (used in) financing activities - continuing operations


212,523



(212,330
)Net cash provided by (used in) financing activities - discontinued operations


-



168,644Net cash provided by (used in) financing activities


212,523



(43,686
)Increase (decrease) in cash and cash equivalents


40,713



(226,261
)Cash and cash equivalents, beginning of year


20,464



246,725Cash and cash equivalents, end of year


61,177



20,464Less cash and cash equivalents of discontinued operations at end of year


-



2,141Cash and cash equivalents of continuing operations at end of year

$
61,177


$
18,323Supplemental disclosures of cash flow information:Interest paid





$
40,674Income taxes paid





$
3,963Supplemental noncash disclosures:Conversion of accrued compensation payable to Equisol chief executive officer to note payable convertible into Company commonstock effective January 1, 2011

$
55,000


$
-Conversion of accrued compensation payable to former employee into the Company common stock based on Mutual Terminationand Release Agreement

$
44,000


$
-Conversion of debt and accrued interest to common stock

$
1,140,373


$
162,972
   F-5
 Table of Contents
 
 
 ENVIRONMENTALINFRASTRUCTURE HOLDINGS CORP.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For The Years Ended December 31, 2011 and 2010
 (Unaudited and unreviewed with respect to year ended Dec 31, 2011)
 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, and a net profit gain of $2,551,066, all attributed to the discontinued operation.
  F-6
 Table of Contents
  2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 PRINCIPLES OF CONSOLIDATION
 
 The consolidated balance sheet at December 31, 2011 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 years ended December 31, 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.
 
 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).
  F-7
 Table of Contents
  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).
  At December 31, 2011 the discontinued operations of XIOM include impairment charges of $56,552 relating to:
  Property and Equipment

$
31,552Note receivable from and minority investment in publicly traded entity


25,000Total

$
56,552
 EARNINGS (LOSS) PER SHARE
 
 The Company follows Financial Accounting Standards Board 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 years ended December 31, 2011 and 2010, the diluted loss per common share calculation excluded the following potentially dilutive securities:
   Common Shares Equivalent (post 1:200 reverse split)Year Ended December 31,2011

2010Convertible notes payable (see Note 7)


38,175



38,715Stock options  (see Note 10)


0



27,595Common stock purchase warrants (see Note 10)


13,200



25,470Total


51,915



91,240
 F-8
 Table of Contents
 
 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.
 
 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 months ended September 30, 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 years ended December 30, 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 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 financial statements.  In connection with the merger, Equisol members received 42,291,931 shares (pre-reverse split).
 F-9
 Table of Contents
  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

$
348,028Accounts receivable(net of allowance for doubtful accounts of $85,000)


17,614Stock subscription receivable (collected December 8, 2009)


204,975Inventory


178,584Prepaid expenses and other current assets


22,562Property and equipment, net


167,263Patents


2,400Retainage receivable


51,851Investment in and advances to investee


50,000Security deposits


11,445Total assets


1,054,722Current portion of debt


1,819,311Accounts payable


416,783Accrued expenses


276,107Accrued compensation


150,000Accrued interest


373,426Total liabilities


3,035,627Identifiable 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 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, and a net profit gain of $2,551,066 all attributed to the discontinued operation.
  4) INVENTORY
  Inventory consisted of finished goods of $81,496 and $94,841, at December 31, 2011 and 2010, respectively.
  F-10
 Table of Contents
  5) PROPERTY AND EQUIPMENT
 
 Property and equipment, net, consisted of the following as of December 31, 2011 and 2010:
 
 Useful Life- Years


2011


2010Machinery and equipment


5-10


$
66,072


$
66,072Vehicles


3-5



28,587



28,587Furniture and fixtures


5-7



5,522



5,522100,181



100,181Less accumulated depreciation and amortization






(99,496
)


(92,082
)Property and equipment, net





$
685


$
8,099
 
 Depreciation and amortization of property and equipment for the years ended December 31, 2011 and 2010 was $685 and $3,393, respectively.
 
 6) GOODWILL AND OTHER INTANGIBLE ASSETS
 
 Intangible assets, net, consisted of the following as of December 31, 2011 and 2010:
 
 2011

2010Goodwill:Acquisition of EIHC (formerly XIOM) on December 7, 2009

$
7,099,110


$
7,099,110Impairment recognized on acquisition of EIHC

(formerly  XIOM)


(7,099,110
)


(7,099,110
)Net


-



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


237,464



237,464Other Intangible Assets:Trade name and customer accounts:Acquisition of intangible assets of KerriganDupree, Inc. on April 17, 2007


60,000



60,000Accumulated amortization


(28,000
)


(22,000
)Net


32,000



38,000Intangible assets, net

$
269,464


$
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 December 31, 2012, 2013, 2014, 2015, and 2016 is $6,000.
 
 F-11
 Table of Contents
 
 7) DEBT
 
 Debt consisted of the following at December 31, 2011 and 2010:
 
 2011


2010Equisol:Credit Card due


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.


-



16,508Convertible 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



162,067Convertible Debt to chief executive officer of Equisol, interest at 8%, due January 1, 2012, convertible at $0.20


22,000



-Loan payable to chief executive officer of the Company, interest at 8%, due on demand .


89,582



112,600Loan payable to former owners of E & I, interest at 0%, due on demand.

(see the related discussion above in thistable 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



43,357Convertible debt due to former owner of Tower Turbines, Inc., interest due at 12%, due on September 1, 2014


50,000



-
  F-12
 Table of Contents
  Gulf States:SBA guaranteed loan payable to financial institution,interest at prime rate plus 2.75%, due in monthlyinstallments 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 writtenconsent concerning transfer or disposal of Company

assets, payment of distributions, or changes in ownershipstructure during the period the loan is outstandingEIHC: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



-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



-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.


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


688,964



576,553Less current portion of debt


(470,956
)


(376,612
)Long term portion of debt

$
218,008


$
199,941
  F-13
 Table of Contents
 Maturities of the debt as of December 31, 2010 for the next five years and thereafter are as follows:
 
 Year endingDecember 31,
 
 2011


483,8142012


42,9722013


47,0032014


47,1142015


50,707Thereafter


12,145Total

$
683,755
 
 Accrued interest on debt consisted of the following at December 31, 2011 and 2010:
 
 2011


2010Equisol loan payable to chief executive officer of the Company


98,184



82,997EIHC Convertible debt


3,214



-Equisol convertible debt


22,725



35,866Accrued interest payable to a related party


43,870



11,981Total

$
167,993


$
130,844
 
 Interest expense incurred for the years ended December 31, 2011 and 2010 is summarized as follows:
 
 2011


2010Equisol

$
107,338


$
66,990EIHC (including debt discount of $


5,934



-Gulf States


13,595



16,245Total

$
126,867


$
83,235
  F-14
 Table of Contents
  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 (See Note 7).  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 $608,264 at December 31, 2011.
 
 The $398,202 balance of the note is due as follows:
 
 Year Ending December 31,2012

$
98,2022013


100,0002014


100,000Total

$
398,202
  9) COMMON STOCK (Before 1:200 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


18,722,357Shares 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


2,250,050Shares sold at $0.20 per share to a convertible note holder of  XIOM (a)


2,300,000Shares sold at $0.25 per share (b)


1,100,000Issued 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.
 
 (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.
 
 F-15
 Table of Contents
  Below is a summary of the private placement made by XIOM coincident to the reverse merger (before reverse split):
  Date deposited into Escrow

Shares of Common Stock Sold at $.25


Gross Proceeds of the Offering


Offering Costs


Net ProceedsPrior to  December 7, 2009


1,100,000


$
275,000


$
6,025


$
268,975From December 7, 2009 to December 31, 2009


400,000



100,000



39,650



60,350Through December 31, 2009


1,500,000



375,000



45,675



329,325January 1, 2010 to February 18, 2010


440,000



110,000



10



109,990Total


1,940,000


$
485,000


$
45,685


$
439,315
 
 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  noteholder of XIOM

$
204,975Shares  sold at $0.25 per share in private placement


60,350Total

$
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 committed to issue 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.
  F-16
 Table of Contents
  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.
  On May 20, 2010, the Company committed to issue 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.
  On November 19, 2010, the Company committed to issue a total of 500,000 (300,000 issued to date) shares 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 committed to issue 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, 2011  was included in the selling, general, and administrative expenses in the three months ended June 30, 2011.
  F-17
 Table of Contents
  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.
 
 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).
  F-18
 Table of Contents
  For the three months ended September 30, 2011, the Company committed to issue a total of 2,732,051 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 September 30, 2011.
 
 Of the 3,134,152 shares committed to be issued at September 30, 2011, 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.
 
 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.
 
 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).
 
 10) STOCK OPTIONS AND COMMON STOCK PURCHASE WARRANTS
 
 A summary of stock option and warrant activity for the years ended December 31, 2010 and 2011 follows (post 1:200 reverse split):


Common Shares EquivalentStock Options


WarrantsOutstanding at December 31, 2009


30,933



16,270Granted and issued


-



7,200Exercised


(2,281
)


-Forfeited/ expired/ cancelled


(1,057
)


-Outstanding at December 31, 2010


27,595



25,470Granted and issued (See Note 9)


-



6,000Exercised (See Note 9)


-



-Forfeited/expired/cancelled (See Note 9)


(26,525
)


(18,270
)Outstanding at December 31, 2011


0



13,200


F-19
 Table of Contents
  Stock options outstanding at December 31, 2011 follow:
 
 Granted in

Year Ended

Number

Outstanding

Exercise
ExpirationDecember 31,

and Exercisable

Price
DateTotal


0
 
 Warrants outstanding at December 31, 2011 follow (post 1:200 reverse split):




Issued in Year Ended

Number Outstanding


Exercise

ExpirationDecember 31,

and Exercisable


Price

Date2010


2,200


$
0.75

December 31, 20122010


5,000


$
0.25

December 31, 20132011


6,000


$
0.10

July 8, 2014Total


13,200




As a result of the Chapter 7 liquidation of the Xiom subsidiary, all Xiom related options and warrants were immediately terminated effective October 19, 2011.
 
 11) INCOME TAXES
 
 For 2010 and prior years, EIHC, Equisol, and GSCP have filed separate federal and state income tax returns; returns for 2011 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 years ended December 31, 2011 and 2010, the income tax provision consisted of:
  2011


2010GSCP - Federal income tax

$
-


$
-GSCP – State income tax


-



-Equisol – State income tax


-



-Total

$
-


$
-
  F-20
 Table of Contents
  For the years ended December 31, 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


2010Expected tax at 35%

$



$
(850,004
)Nondeductible impairment of  goodwill


-



-Tax effect of Equisol taxation as a partnership


-



-Change in valuation allowance






850,004State income tax


-



-Actual income tax provision

$
-


$
-
  As of December 31, 2011, EIHC had net operating loss carryforwards of approximately $500,000 which expire in 2029 and 2030.
  Changes in the ownership of EIHC 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 December 31, 2011 and 2010, 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 December 31, 2011 and 2010, the net deferred tax asset consists of:
  2011


2010Deferred tax asset relating to net operating loss carry forwards of EIHC

$
385,000


$
175,000Valuation Allowance


(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 2011 and 2010 was approximately $9,246 and $60,993, respectively.
  F-21
 Table of Contents
  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 December 31, 2011, the minimum payments under operating leases for the next three years and thereafter are as follows:
  Year ending December 31,
 
 2012


30,0002013


30,0002014


15,000Thereafter


-TOTAL


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 and Equisol executed two employment agreements with the two chief executive officers of EIHC and Equisol respectively.
 
 The agreement with EIHC’s chief executive officer has a term of two years and provides for a base salary of $175,000 per year, annual stock grants equal to $100,000, a fixed bonus of no less than $175,000 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.
 
 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.
 
 F-22
 Table of Contents
 
 An analysis of compensation expense charged to operations for the year ended December 31, 2011 and accrued compensation payable at December 31, 2011 under the two employment agreements with the two executive officers of EIHC and Equisol follows:
 
 Continuing OperationsEIHC


Equisol


TOTALCash CompensationBase Salary

$
203,070


$
100,000


$
303,070Minimum Bonus


198,275



-



198,275401,345



100,000



501,345Other


5,568



-



5,568Total Cash Compensation


406,913



100,000



506,913Stock CompensationTotal Stock Compensation


100,000



50,000



150,000Total Compensation Expense

$
506,913


$
150,000


$
656,913Accrued Compensation Payable at December 31, 2011

$
625,454


$
122,000


$
747,454
  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.
 
 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.
 
 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.
  F-23
 Table of Contents
  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 year ended December 31, 2011 were much lower than those experienced in 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.
 
 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 December 31, 2011, the Company has a total Stockholders’ Deficit of $4,894,339 and negative working capital of $1,134,252. Additionally, the Company incurred a Net Loss of $2,428,584 for the year ended December 31, 2011.  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. The Company will continue seeking to raise money through a series of equity and debt transactions in 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.  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.
 
 For the nine months ended September 30, 2011 and 2010, loss from discontinued operations consisted of:
 
 2011


2010Revenues


16,897



436,337Cost of revenues


4,989


$
281,070Gross profit


11,908



155,267Selling, general and administrative expenses


43,274



559,567Operating income


(31,366
)


(404,300
)Interest expense


(123,868
)


(396,684
)Loss before income tax provision


(155,234
)


(800,984
)Income tax provisionLoss from discontinued operation


(155,234
)

$
(800,984
)
  F-24
 Table of Contents
  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.
 
 The assets and liabilities of XIOM at September 30, 2011 and December 31, 2010 consisted of:
 
 (a) 2011


2010AssetsCash and cash equivalents

$
132


$
2,141Accounts receivable, net


-



-Inventory


-



-Prepaid expenses and other current assets


2,000



2,000Total current assets


2,132



4,141Property and equipment, net


-



-Other assets, net


36,446
(b)


36,446Total assets

$
38,578


$
40,587LiabilitiesCurrent portion of debt

$
879,311
(c)


1,699,311Accounts payable


607,160



585,307Accrued expenses


408,648



408,648Accrued Interest


694,525



891,030Total liabilities

$
2,589,644


$
3,584,296Net Assets (Liabilities)

$
(2,551,066
)

$
(3,543,709
)
 
 
 (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.
 (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 December 31, 2011 and 2010, respectively, eliminated in consolidation.
 
 F-25
 Table of Contents
  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 and services.
  Substantially all revenues for the years ended December 31, 2011 and 2010 were derived from customers located in the United States.
  In 2011, three customers accounted for 37.8%, 26% and 8.7% of consolidated revenues, respectively.
  16) SUBSEQUENT EVENTS
  On February 1, 2012 the Company initiated a 1:200 reverse split of its common stock.  The split became effective on March 3, 2012.
  F-26
 Table of Contents
  Item9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
 None.
 
 Item9A(T).    CONTROLS AND PROCEDURES
 
 Disclosure Controls and Procedures
 
 Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this Annual Report on Form 10-K, has concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
 
 Management’s Report on Internal Control Over Financial Reporting
 
 Management of the Company is responsible for the preparation and integrity of the consolidated financial statements appearing in our annual report on Form 10-K.  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 annual report on Form 10-K is consistent with that in the financial statements.
 
 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. Our internal control over financial reporting includes those policies and procedures that:
 
 ·      pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of EIHC;
 
 ·      provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of EIHC are being made only in accordance with authorizations of management and directors of EIHC; and
 
 ·      provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of EIHC’s assets that could have a material effect on the financial statements.
 
 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.
 
 Our management, with the participation of our chief executive officer/chief financial officer, performed an evaluation of our internal controls over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934) and concluded that our internal controls over financial reporting were effective as of December 31, 2010, and for the period then ended.
 
 Changes in Internal Controls over Financial Reporting
 
 During the first quarter of our fiscal year, and subsequently, we instituted additional levels of review over financial reporting and have retained the services of additional financial professionals with the requisite background and experience that will coordinate and be responsible for our disclosure controls and procedures. There were no other changes in internal controls over financial reporting which materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
 
 Item9B. OTHER INFORMATION
 
 None
  26
 Table of Contents
 
 Part III
 
 Item10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
 
 The directors and officers of the Company are listed below with information about their respective backgrounds.  Each Director is elected to serve a one year term, until the next annual meeting of the shareholders or until their successor is elected (or appointed) and qualified.
 
 Effective as of December 31,2011, the following individuals were elected to the Board of Directors of the Company:
 
 Name

Age

PositionMichael D. Parrish

48

Chairman of the Board of Directors/CEO, PresidentJames K. Weber

46

Secretary/DirectorKurt M. Given

47

Treasurer/Director
 ___________________
 
 Michael D. Parrish
 
 In connection with the Acquisition, the Company entered into an Employment Agreement dated as of December 7, 2009 (the “Employment Agreement”) with Michael D. Parrish, the President and CEO of Equisol and a Seller under the Purchase Agreement.  Under the terms of the Employment Agreement, Mr. Parrish will be employed as the President and CEO of the Company for an initial term of two (2) years, which term may be extended for an additional one-year.  The initial term of employment commenced on the closing date of the Acquisition.  Mr. Parrish will also serve as the Chairman of the Board of Directors of the Company.  Mr. Parrish will have an annual base salary of $175, 000, and he is also eligible to receive discretionary performance bonuses.
 
 Mr. Parrish has extensive operational and general management experience; his focus is on financial performance and strategic alliances.  Mr. Parrish has over 24 years of leadership and finance experience in a variety of global firms.  Prior to Equisol, Mr. Parrish held various executive positions in several General Electric Companies where he served in positions such as General Manager for global logistics and services for GE’s Water business, and, earlier, as Managing Director for GE Capital specializing in ecommerce, six sigma, and productivity of several of GE’s equipment management groups.  Prior to GE, Mr. Parrish served for 14 years active duty in the U.S. Army where he held various leadership positions of increasing responsibility as an Army Aviator culminating as a member of the Army Acquisition Corps.  Mr. Parrish has a Bachelor’s degree in Engineering from the U.S. Military Academy at West Point as well as a Masters Degree in Astronautical Engineering from Stanford University and an MBA with honors from the Wharton School at the University of Pennsylvania.   He is the current President of the West Point Society of Philadelphia and serves on the boards of the USO of SE PA/NJ and the Delaware Valley Industrial Resources Council.
 
 James K. Weber
 
 James Weber is a seasoned executive who joined Xiom Corp. with over 23 years of management and technical expertise in the thermal spray industry. Mr. Weber spent the bulk of his extensive career at Sulzer Metco (formerly Metco Perkin-Elmer), the largest global thermal spray company. During his 20-year tenure at the Company he served in a variety of engineering and management roles. Most recently, Mr. Weber was operations manager at Precision Pipeline Solutions, working with large electrical and gas utilities such as Consolidated Edison and National Grid, supplying them with corrosion control coating solutions. Mr. Weber holds several patents related to thermal spray technologies.  Mr. Weber is an active member of NACE International (National Association of Corrosion Engineers).
 
 Kurt M. Given
 
 Kurt M. Given, is responsible for the day-to-day business functions and operations of Equisol, including marketing, technology, and linking together sales, administration, and customer relationships. With 20 years of water treatment experience at GE Betz, he has held positions in engineering and management for both the chemical and feed equipment product lines. From 1999 to 2002, he was group Leader and Product Manager for the Equipment team, overseeing all activities including pricing, marketing, profitability, capital equipment, contracts and product management. He has a Bachelor of Science degree in Chemical Engineering from Pennsylvania State University and holds a patent for dust control foam generation.
  27
 Table of Contents
  Code of Ethics
 
 Our board of directors had adopted a code of ethics applicable to persons at our company who are responsible for financial management. A copy of the code of ethics has been previously filed as an attachment to the Annual Report for September 30, 2007 as Exhibit 14.1.
 
 Section 16(A) Beneficial Ownership Reporting Compliance
 
 Under section 16 of the Exchange Act, our directors and executive officers and beneficial owners of more than 10% of the our common stock are required to file certain reports, within specified time periods, indicating their holdings of and transactions in our common stock and derivative securities.
 
 Item11.EXECUTIVE COMPENSATION
 Summary Compensation Table
  Name and

Principal Position
Year
Salary ($)
Bonus ($)
Stock Awards ($)
Option Awards ($)
Non-equity Incentive Plan Compensation
Nonqualified Deferred Compensation Earnings ($)
All Other

Compensation ($)
Total ($)Michael D. Parrish, President,

Chairman & CEO
2011

2010
$198,276(1)

$175,000(1)
$198,276(1)

$175,000(1)
$100,000

$100,000
-0-

-0-
-0-

-0-
-0-

-0-
$12,358

$12,358
$508,910

$462,358Kurt M. Given,

President, Equisol LLC
2011

2010
$100,000(1)

$100,000
-0-

-0-
$50,000

$50,000
-0-

-0-
-0-

-0-
-0-

-0-
$833

$833
$150,833

$150,833
 (1)
Amounts accrued have been deferred and are shown in the accompanying balance sheet as accrued compensation.
 
 The following table details options granted to each executive officer in the last fiscal year ended December 31, 2011:
  Outstanding Equity Awards at Fiscal Year-End
  OPTION AWARDSName
Number of Securities Underlying

Unexercised Options (#) Exercisable
Number of Securities Underlying Unexercised Options (#) Unexercisable
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
Option Exercise

Price ($)
Option

Expiration DateMichael D. Parrish, President, Chairman & CEO
-0-
-0-
-0-
N/A
N/AKurt M. Given, President, Equisol LLC
-0-
-0-
-0-
N/A
N/A
 
 All directors hold office until the next annual meeting of stockholders and the election and qualification of their successors. Each executive officer is elected annually by the Board of Directors to hold their respective office until the annual meeting of shareholders and until their successors is chosen and qualified.
 
 Director and Officer Insurance:
 
 The Company has directors and officers (“D & O”) liability insurance.
  Stock Option Plan
 
 The Company plans to submit an Equity Incentive Plan to a vote of shareholders during 2012.
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 Item12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
 The following table sets forth information as of March 30, 2012 with respect to the beneficial ownership of the 1,129,729 outstanding shares of the Company's Common Stock by (i) each person known by the Company to beneficially own five percent or more of the outstanding shares; (ii) the Company's officers and directors; and (iii) the Company's officers and directors as a group.  A person is deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within sixty (60) days.
 
 Percentage ofIdentity of Shareholder

Number of Shares


Beneficial OwnershipMichael D. Parrish


382,714



33.88
%200 Barr Harbor Drive, Ste 400West Conshohocken, PA 19428Chairman and CEOKurt M. Given (2)


202,875



17.96
%200 Barr Harbor Drive, Ste 400West Conshohocken, PA 19428Executive VP and DirectorJames K. Weber


2,814



0.25
%114 N. Clinton AvenueBay Shore, NY 11706DirectorAll Officers and Directors as a Group (3 Persons)


588,403



52.09
%
 *           Less than 5%
 
 (1)
Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of Common Stock that an individual or entity has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or entity, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person or entity shown in the table.(2)
Including 5,511 owned by a member of his family
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  Item13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
 
 Transactions Between Us and Our Affiliates
 
 Director Independence
 
 None of our current directors is considered to be independent at this time.
 
 Item14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
 Michael T. Studer, CPA, P.C. as our independent accountants, audited our financial statements for the years ending December 31, 2011 and 2010, and performed reviews of our financial statements included in our Forms 10-Q during our fiscal year ended December 31, 2011.
 
 Audit Fees:  The aggregate fees billed by Michael T. Studer, CPA, P.C. during the fiscal years ended December 31, 2011 and 2010 for professional services for the audit of our financial statements and the review of financial statements included in our Forms 10-Q were $50,000 and $50,000, respectively.
 
 Audit-Related Fees:  Michael T. Studer, CPA, P.C. did not provide or bill for, and was not paid for, any audit-related fees in the fiscal years ended December 31, 2009 and 2008.
 
 Tax Fees:  Michael T. Studer, CPA, P.C. did not provide or bill for, and was not paid for, any audit-related fees in the fiscal years ended December 31, 2009 and 2008.
 
 All Other Fees:  Michael T. Studer, CPA, P.C. did not provide or bill for, and was not paid for, any other services in the fiscal years ended December 31, 2009 and 2008.
 
 The Company’s Board of Directors has annually reviewed and approved the engagement of the Company’s auditors and approved in advance the fee arrangements with regard to audit services and reviews of financial statements included in the Company’s Forms 10-Q, along with audit-related fees and tax fees. Substantially all such fees were approved in advance for 2011 and 2010.
 
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 PART IV
 
 Item15.  EXHIBITS
 
 Index to Exhibits:
  SEC REFERENCE NUMBER
TITLE OF DOCUMENT31.1
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)
 (1)      Filed herewith.
 
 Reports on Form 8-K:
 
 None.
 
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   SIGNATURES
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, XIOM CORP. has duly caused this Report to be signed on behalf of the undersigned thereunto duly authorized on April 16, 2012.
 
 ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP.By:
/s/ Michael D. ParrishMichael D. Parrish, President, Chairman and CEO
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons in the capacities indicated:
 
 Signature

Title

Date/s/ Michael D. Parrish

President, Principal

April 16, 2012Michael D. Parrish

Executive and Accounting Officer andDirector/s/ James K. Weber

Director

April 16, 2012James K. Weber/s/ Kurt M. Given

Director

April 16, 2012Kurt M. Given
 
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