UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSSION


WASHINGTON,
      D.C. 20549





FORM
      10-KSB





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


For
      the fiscal year ending September 30,
      2006




o
                TRANSITION
                    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF 1934:


For
      the transition period from _________ to
      _________




Commission
      file number: 333-124704





**XIOM
      CORP.**


(Name
      of
      small business issuer in its charter)





Delaware
            11-3460949(State
                or other jurisdiction of incorporation
            (I.R.S.
                Employeror
                organization)
            Identification
                No.)




78A
      Lamar Street, West Babylon, New York 11704


(Address
      of Principal executive offices)  (Zip
      Code)





Issuer’s
      telephone number: (631) 643-4400









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


Common
      Share, Par Value, $.0001


(Title
      of
      each Class)





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





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such a 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.  xYes o No







Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-K is not contained in this form, and no disclosure will be
      contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part II of this Form 10-KSB
      or any amendment to this Form 10-KSB. x





The
      issuer’s revenues for its most recent fiscal year: $ 629,336





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates based on the average bid and asked price of such common equity,
      as of January 16, 2007, was approximately $3,625,000.





The
      number of shares of Common Stock outstanding, as of January 16, 2007 was:
      7,533,260





Transitional
      Small Business Disclosure Format (check one): Yes o; No x










**XIOM
      CORP.**


ANNUAL
      REPORT ON FORM 10-KSB





For
      Fiscal Year Ended September 30, 2006





INDEX


Page
                  No:PART
                  I
              
              3ITEM
                  1.
              DESCRIPTION
                  OF BUSINESS
              3Plan
                  of Operations
              8Results
                  of Operations
              9ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
              10ITEM
                  3.
              LEGAL
                  PROCEEDINGS
              10ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITYHOLDEDRS
              10PART
                  II
              
              11ITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATEDSTOCKHOLDER
                  MATTERS
              11ITEM
                  6.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OFOPERATION
              12Off
                  Balance Sheet Arrangements
              15ITEM
                  7.
              FINANCIAL
                  STATEMENTS
              F-1ITEM
                  8.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTSON
                  ACCOUNTING AND FINANCIALDISCLOSURE
              16ITEM
                  8A.
              CONTROLS
                  AND PROCEDURES
              16ITEM
                  8B.
              OTHER
                  INFORMATION

        16PART
                  III
              
              16ITEM
                  9.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS ANDCONTROL
                  PERSONS; COMPLIANCE WITH SECTION 16 (a) OFTHE
                  EXCHANGE ACT
              16ITEM
                  10
              EXECUTIVE
                  COMPENSATION
              18ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERSAND
                  MANAGEMENT
              20ITEM
                  12.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS
              21ITEM
                  13.
              EXHIBITS
                  AND REPORTS ON FORM 8-K
              22ITEM
                  14.
              PRINCIPAL
                  ACCOUNTING FEES AND SERVICES
              22Signatures
              
              23


**XIOM
      CORP.**





**Part
      I**





**Item
      1. Description of Business**





FORWARD
      LOOKING STATEMENTS




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








**ABOUT
      OUR COMPANY**




How
      our
      company is organized


XIOM
      Corp, formerly Panama Industries, Ltd., (“XIOM”), was incorporated in Delaware
      on March 2, 1998. The company formally changed its name to XIOM in August
      2004.




**Spin-off
      from the former parent company**




The
      former parent of XIOM, ThermalTec International, Corp. (“TTI”), now
      Accountabilities, Inc. and publicly traded under the symbol “ACTB”, was
      incorporated in 1994 under the laws of the State of Delaware. XIOM was spun-out
      of TTI in July of 2001 to its shareholders of record as of June 22, 2001, upon
      which each shareholder of TTI received one (1) share of XIOM common stock for
      every three (3) shares of TTI common stock. XIOM was spun-off because it had
      a
      specific technical focus that needed further development and TTI had intended
      to
      focus on specific target merger candidates involved in a totally unrelated
      business. In May and June of 2001, TTI was seeking to enter into a series of
      transactions to acquire up to eleven separately owned Comprehensive Outpatient
      Rehabilitation Facilities (“CORF”) that were managed by a Florida based company
      named Total Health Care Consulting, Inc. At that time, TTI management decided
      that the combination of XIOM and these businesses would have been difficult
      to
      integrate, cause numerous management problems as well as accounting and
      financial reporting issues. As such, it was decided by the management of TTI
      that XIOM, as a wholly-owned subsidiary, would be better off as a separate
      stand
      alone company, able to focus on its own specific operations and business plan
      objectives. XIOM has been, since inception, engaged in the thermal spray coating
      industry. Its primary business objective is to continually refine and market
      their polymer based thermal spraying coating technology.





3


**Where
      you can find us**




Our
      corporate offices and manufacturing facility are located at 68A Lamar Street,
      West Babylon, New York. The main telephone number is (631) 643- 4400. Our
      website is http://www.xiom-corp.com .
      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**




Materials
      used with XIOM 1000 System are produced from various formulas of plastic
      powders. The powder mixture is melted and projected onto a substrate via a
      mixture of air and flammable gases that produce the actual coating. The air,
      flammable gases and powder mixture are brought together through a specialized
      and patented gun with a flame nozzle where the powder material is melted and
      sprayed forward onto the surface to be coated. The gases and heated coating
      are
      cooled by the surface that it adheres to.





The
      company is a technology business offering delivery of plastic powder coatings
      at
      on-site locations utilizing the XIOM 1000 System. Powder coating currently
      is a
      process in which metal parts are brought into a factory environment where they
      are cleaned and prepared to receive a powder coating. Plastic in powder form
      is
      then applied to the various metal parts by means of an electrostatic charge
      that
      causes the powder to adhere to the surface. The coated part is then heated
      in an
      oven for a period of time to cause the plastic to melt and adhere to the
      substrate. Our process operates differently. Although we use plastic powder,
      we
      do not electrostatically charge that powder in order for it to adhere to a
      substrate. We use a different mechanism which simultaneously applies and fuses
      the powder to a substrate. The advantage of this process is that the coating
      process is totally portable and can be applied anywhere, not necessarily in
      a
      factory setting, and can be applied without use of an oven to cure the coating.,
      and can be applied to most substrates in addition to the metal substrate to
      which powder coatings are traditionally applied in a factory, using an
      oven.





The
      company’s plastic spray technology is unique and has patents pending. The
      patents cover technology and processes to apply and deliver powder coatings
      through a specialized spray system that allows those coatings to be applied
      both
      on site and in a factory. The patents will last, upon issuance for a period
      of
      17 years, unless other patents are applied for. With our process, the on-site
      plastic powder coating process, you can deposit coatings on wood, steal,
      fiberglass, concrete and plastic - a variety of substrates not all available
      to
      traditional powder coating. Our process is quick, does not use an expensive
      oven
      for curing and can be used both outside and inside a building.





The
      technology associated with the XIOM 1000 Thermal Spray system was developed
      personally by the two operating officers of the Company, who, in August 2004,
      irrevocably transferred all rights title and interest in all current patents,
      patents pending and any future intellectual property rights that may be derived
      from this technology in exchange for restricted common shares on the Company.
      This technology was developed and enhanced over time with funding from contacts
      with the New York State Energy Research & Development Authority (“NYSERDA”).
      The refinements made to the technology pursuant to these contracts have resulted
      in the XIOM 1000 Thermal Spray system that is currently marketed for commercial
      sale.





4





**HISTORY
      OF THE TECHNOLOGY**




The
      history of applying polymer coatings dates back to the early 1950’s starting
      with the fluidized bed process and then in the 1960’s to the Electrostatic
      Powder Sprayer (EPS). Today EPS is the standard for applying organic polymer
      coatings. It is commonly referred to as “Powder Coating” which to this familiar
      with the process means EPS applied plastic powder coatings followed by oven
      curing at approximately 400 F, where melting and film formation takes
      place.





EPS
      is a
      large business today as polymer coatings, thermoplastic and thermoses are
      applied to a variety of substrates. They can be applied to cold surfaces before
      being cured to film thickness typically between 1 to 4 mils (50-200 microns).
      There are little Volatile Organic Compounds (VOC) and reduced Hazardous Air
      Pollutants (HAP). For these reasons EPS has captured substantial business form
      the established liquid coating processes (Painting).





The
      company’s products contain no VOCs (volatile organic compounds). There is a
      current trend by the EPA to ban VOCs for products sold to the public for safety
      and health purposes, but there is no guarantee that our VOC-less products,
      although safer, will prove to be any more functionally effective than those
      alternative coating products such as paints that do have VOCs.





The
      traditional powder coating industry, directly competitive to the company’s
      products, usually requires a large investment in ovens and production lines,
      sophisticated preparation and cleaning equipment, and in many cases operates
      with sophisticated in-line computerized production control systems to manage
      the
      powder coating process. The XIOM system is designed to do powder coating outside
      a traditional factory setting. The company’s system enables a plastic coating to
      be directly sprayed onto a surface, contains no preparation equipment and
      requires no oven with which to cure powder coatings. The company’s system has no
      computerized control whatsoever and, in fact, does not even use electricity
      but
      relies on air, propane and oxygen to achieve a coating result.





Traditional
      powder coaters who do coating inside a factory environment could possibly try
      to
      re-engineer their systems to prevent the company from selling its systems.
      But
      it would require them to manufacture smaller, more portable ovens as well as
      develop more portable production and control systems in order to compete with
      the company’s on-site coating capability. The company acknowledges that in the
      event that enough traditional powder coaters alter their existing operations
      and
      create portable systems and ovens that could be mounted on mobile units equipped
      with power systems for operation, might compromise our ability to sell our
      $8,000 systems.





5




There
      can
      be no assurance that the company’s technology will ever supplant traditional
      powder coating technology and become commercially successful. However, our
      technical data on our coatings gives us grounds to be optimistic (see attached
      test results from an independent laboratory). Because Xiom coatings are actually
      solid plastic coatings, they have the possibilities of being more durable and
      weather-resistant than conventional painting systems which are another large
      alternative to the company’s powder coating systems.





The
      company, believes, but cannot prove that its coatings are superior to paint.
      The
      company would have to conduct long term tests of its solid plastic coatings
      versus liquid paints in many environments over a period of many years using
      an
      independent agency to monitor such tests to prove its belief/. The expense
      to do
      so would be extremely high since some plastic coatings are reputed to last
      many
      years. The company would have to continue to pay its overhead during such tests
      and possibly not sell anything because customers may want such proof and might
      not want to rely on our assertions, or the assertions of other plastic feed
      stock manufacturer’s as to the efficacy of plastic after it passes through our
      system. In that case the company would run out of funds long before such tests
      were completed. Investors would be well advised not to invest in the company
      if
      they need the assurance of long term testing on coatings from our process being
      able to outlast paint coatings. In this case the company would strongly advise
      such investors not to invest in the company.





Unlike
      most painting systems, Xiom’s coatings have no dripping and overspray problems
      and absolutely no VOCs. Xiom materials cure instantly after being applied and
      no
      curing ovens are needed.





Due
      to
      the fact that the entire Xiom system weighs just 70 pounds, the entire system
      can be easily used onsite. The company is acting on its belief that there is
      a
      demand for plastic coatings applied outside a factory setting; the company
      cannot prove that its belief is accurate.





Xiom
      coatings can be applied at thicknesses from 3 mls up to 1 inch as compared
      to
      traditional powder coatings which usually vary from 1 to 4 mls thick. The
      company believes that thicker coatings generally give greater protection against
      corrosion than thin coatings. The company does not have definitive data to
      conclusively prove this assertion.





EPS
      applied plastic coatings are further characterized by their wide use in OEM
      and
      production applications for decorative purposes where appearance and durability
      are required. While there is some use of functional EPS coatings, by and large
      the vast majority of use for decorative applications. Large numbers of
      relatively small components can best take advantage of the economic benefits
      from EPS powder processing thus conforming to the limits of batch processing
      and
      over size restrictions.




**UNIQUE
      THERMAL SPRAY TECHNOLOGY**




The
      XIOM
      powder spray process uses the rich history of EPS Powder Coatings but takes
      the
      technology a step further to meet the field requirements of on-site liquid
      painting, thus bridging the gap between “in house” EPS and “on-site” liquid
      painting developing a true portable on-site polymer coating system.





6




Two
      major
      advances account for XIOM’s coating technology;





First,
      The XIOM 1000 Thermal Spray system is currently the Company’s only equipment
      product for on-site portability. It permits spraying of relatively low melting
      point polymer powder without over heating and generation of combustion (with
      no
      VOC’s). High deposit rate and efficiency further characterize the XIOM 1000
      system.





Second,
      XIOM plastic powders are designed specifically for Thermal Spraying. New
      materials technology utilizing multiplex combinations, blends, additives and
      composites, this taking advantage of synergy and covalent bonding to produce
      exceptionally high adhesion to most substrates and functional properties
      heretofore not possible with polymers (plastic coatings). For instance XIOM
      is
      the first to produce thermal sprayed polymer/zinc primer coats, which deliver
      very high quantities of zinc to the substrate for corrosion control. These
      polymer/zinc primer coatings not only bond securely to steel substrate, but
      they
      facilitate bonding of sprayed top coatings as well.





Many
      XIOM
      powders are unique and therefore patentable, with patents pending. Substrates
      such as wood, plastic, masonry and fiberglass - not processable via EPS - are
      now readily sprayable with the XIOM 1000 system, along with steel, aluminum
      and
      non-ferrous substrates.





The
      new
      powder coatings properties produced with the XIOM 1000 system are manifested
      in
      the wide variety of applications both functional and decorative now
      solvable.





The
      Company currently has 15 varied material formulations to create spray coatings.
      The Coating functionality includes any-corrosions; wear resistance,
      architectural, anti-foul, anti-microbial, anti-graffiti, glow-in-the-dark,
      and
      grip and release. The Company’s materials come in over 100 different colors. The
      completely portable delivery system consists of a 70 pound combination of a
      patent pending spray gun, patent pending powder feeder and control console
      retailing for a total of $7,900. Material costs for the powder range from
      anywhere from $4 to $18 a pound, depending on their functionality. The Company
      can mix ceramics and metals, if desired, for added wear, into its plastic
      coatings and can add anti-microbial formulations into the coatings. The system
      sprays eight pounds of plastic material an hour using different spray nozzles,
      allowing for both round patters and a 4-inch fan spray pattern. The system
      is
      electrically controlled. The fuel system is oxygen and propane with air as
      a
      cooling gas. Preparation of surfaces is the same as for painting. Since these
      are plastic coatings, all solids with no hollows and voids, they will last
      longer than paint-based coating systems. They can be applied thick or thin
      and
      have no volatile organic compounds as part of their makeup.




7


**PLAN
      OF OPERATIONS**




**Liquidity,
      Capital Resources and Operations:**




During
      the fiscal years ended September 30, 2006 and 2004, net cash used by operating
      activities was $513,035 and $146,657, respectively. The Company incurred net
      losses of $801,321 and $413,802 for the fiscal years ended September 30, 2006
      and 2005, respectively. Additionally, at September 30, 2006, the Company had
      a
      Stockholders’ (Deficit) of approximately $245,000.





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.
 It is also the intention of the Company’s management to improve
      profitability by significantly increasing sales of its patented thermal spray
      process in fiscal 2007 while maintaining reasonable levels general and
      administrative expenses as the company grows.




As
      disclosed elsewhere in this filing, the Company completed a private placement
      of
      equity in March 2006 whereby it raised $342,000 of additional financing. The
      Company closed another private placement offering in September where it raised
      $302,000 of additional financing. However, there is no assurance that these
      financings, nor any future financing, if successful, will be sufficient to
      allow
      the Company to operate profitably or successfully. Furthermore, the Company
      eliminated $280,000 of current liabilities and $155,000 of shareholder loan
      by
      exchanging these obligations in lieu of payment for the exercise of certain
      stock options in March and September of 2006.




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





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





8




**Results
      of Operations:**


**For
      the Fiscal Years Ended September 30, 2005 vs. September 30,
      2004**




For
      the
      fiscal year ended September 30, 2006, the Company had $629,336 in sales and
      cost
      of sales of $423,415. This is in comparison to total sales of $184,445 and
      cost
      of sales of $145,601 for fiscal year ended September 30, 2005. The increase
      in
      sales and cost of sales in fiscal 2006 results primarily from a significant
      increase in system and powder sales compared to fiscal 2005. Sales and cost
      of
      sales for fiscal 2005 resulted primarily from the Company’s development contract
      with NYSERDA. Sales related to the patented thermal spray technology only began
      to ramp up in the second half of fiscal 2005. Gross profit for fiscal 2006
      was
      $205,921, an increase of $167,077, or 430%, compared to the gross profit in
      fiscal 2005 of $38,844.




General
      and administrative expenses increased by approximately $ 555,000 from fiscal
      2005 to fiscal 2006.  This increase was due to additional consulting
      engineering expense to refine the thermal spray process as well as sales
      consulting, marketing expenses and general overhead increases necessary to
      accommodate the anticipated customer demand from the formal product roll-out
      that commenced at the end of the third quarter of fiscal 2005. The Company
      also
      expanded into an additional 7,000 square foot facility that is better equipped
      to handle the increased volume of spray system assemblies and powder formula
      mixing. This also required that additional employees be hired for the
      manufacturing and warehouse operations.




The
      net
      loss increased from $413,805 ($.07 per share) to $805,821($.13 per share) from
      2005 to 2006, respectively. This increase of approximately $392,000 was directly
      related to the increase in general and administrative expenses described
      above.





We
      have,
      in our history, generated limited income from operations, have incurred
      substantial expenses and have sustained losses. In addition, we expect to
      continue to incur significant operating expenses. As a result, 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 planned expansion.
      Even if we do achieve profitability, we may be unable to sustain or increase
      profitability on a quarterly or annual basis in the future. We expect to have
      quarter-to-quarter fluctuations in revenues, expenses, 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.





**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.





9




**Employees:**




As
      of
      December 31, 2006, we employed approximately 10 persons. None of our employees
      are covered by collective bargaining agreements. We believe that our relations
      with or employees are good.




**Item
      2. Description of Property**




XIOM
      leases approximately 9,000 square feet of manufacturing and warehouse facility
      in West Babylon, New York pursuant to a four-year lease at $6,000 per month.
      This location also serves as Corporate Headquarters. The Company also leases
      separate office space in Westbury, New York on a month-to-month for $1,450
      per
      month. Rent expense, net of sub-lease income, for fiscal 2006 and 2005 was
      approximately $60,000 and $29,500, respectively. 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.





**Item
      3. Legal Proceedings**




We
      are
      not aware of any litigation, pending, or threatened at this time.








**Indemnification
      of Officers and Directors**




At
      present we have not entered into individual indemnity agreements with our
      Officer or Director. However, our 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. Submission of Matters to a Vote of Security Holders**





None




10


**Part
      II**





**Item
      5. Market for Common Equity and Related Stockholder
      Matters**





**General:**


The
      authorized capital stock consists of 10,000,000 shares of common stock, par
      value $.0001 per share. As of January 16, 2007, there were 7,533,260 shares
      of
      Common 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 10,000,000 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 such 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.




**Price
      Ranges of XIOM CORP. Common Stock:**




Market
      Information


The
      Company’s Common Stock is traded on the NASD OTC Bulletin Board under the symbol
“XMCP” commencing on or about December 18, 2006.





There
      is
      currently a limited trading market for the Company’s Common Stock with the price
      being very volatile. Inasmuch as the stock has been trading only since December
      18, 2006, there is not sufficient information to indicate with this filing.
      The
      price has been between $2.75 and $.75





**Liquidation:**




In
      the
      event of a liquidation of the Company, all stockholders are entitled to a pro
      rata distribution after payment of any claims.




11




**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, 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




**Item
      6. Management’s Discussion and Analysis or Plan of
      Operation.**





**Forward-looking
      Information**




Certain
      statements in this document are forward-looking in nature and relate to trends
      and events that may affect the Company’s future financial position and operating
      results. The words “expect” “anticipate” and similar words or expressions are to
      identify forward-looking statements. These statements speak only as of the
      date
      of the document; those statements are based on current expectations, are
      inherently uncertain and should be viewed with caution. Actual results may
      differ materially from the forward-looking statements as a result of many
      factors, including changes in economic conditions and other unanticipated events
      and conditions. It is not possible to foresee or to identify all such factors.
      The Company makes no commitment to update any forward-looking statement or
      to
      disclose any facts, events or circumstances after the date of this document
      that
      may affect the accuracy of any forward-looking statement.





**XIOM,
      Corp.’s plans for the next twelve months**





The
      company is pursuing an advertising and promotion expense-to-sales ratio that
      would allow it to act profitably. At the present time, the company’s operations
      expenses are approximately $24,000 a month. With the addition of advertising
      and
      promotion expenditures, these expenses would increase to $30,000 per month.
      Other significant recent expenses over and above our monthly run rate are
      expenses for patents on equipment and materials, and for professional fees
      expended during the SB-2 registration process, which would not be
      recurring.





Gross
      profit on each XIOM system is approximately $5,000, which would require us
      to
      sell six systems directly and/or nine systems a month indirectly through
      distributors to cover our operating costs.





It
      is too
      early for us to calculate an accurate figure on the number of pounds of powder
      coating materials we will sell for each system sold. The more XIOM materials
      used per gun, the more revenue would be made by the company. The company however
      cannot be sure that it can sell the required number of systems and powder
      materials each month to help the company remain viable and that the servicing
      of
      each system sold might not become very expensive. If this occurred it would
      cause the company to lose profits on those systems’ sales. If this situation
      occurred and could not be corrected in a timely fashion, the company could
      ultimately become insolvent.





12




In
      addition to a Canadian distributor (Jaddack Creations, Inc.), the company has
      two other small distributors in the U.S. The U.S. distributors are located
      in
      Texas and New York. The terms of the Distribution Agreements state that the
      distributor has the right to distribute the XIOM products in a certain
      territory. The agreements set a price for the product. There are no other
      financial terms or minimum amounts that the Distributor is required to
      meet.





We
      are
      currently in preliminary negotiation to launch a distributorship in Europe,
      although there are no specific terms or parties agreed upon at this time. There
      is no guarantee that these negotiations will be successful. If such negotiations
      were successful, there still can be no assurance that a distributor could sell
      the company’s system successfully in Europe. The company has sold one system to
      date in Europe. That sale was unforeseen and not expected by the company.





We
      shipped approximately 70 units in fiscal 2006, and we currently continue to
      have
      a back order of approximately 35 units. With the potential orders from
      interested parties and the new Agreement with the Department of the Navy, we
      expect that number to increase. Based on the current status of orders and
      expected orders we can maintain operations almost indefinitely.





The
      company has shipped more than 40 of its spray systems in the last 8 months
      since
      it introduced the XIOM 1000 system, including re-orders for the spray systems,
      and is currently receiving orders for slightly more than
      two
      systems a week as well
      as corresponding orders for the spray powders. There is no guarantee that the
      company can continue to make sales in the future; unforeseen problems could
      occur and slow or completely halt sales. If after 12 months such unforeseen
      problems occurred and the company stopped making sales, the company would be
      effectively out of business with no assurance that it could raise new funds
      to
      keep its endeavors going and remain solvent.





The
      company shipped 15 systems in April, another 12 in May, and another 15 in June,
      and continues to receive additional orders. Even though the company currently
      has approximately 70 orders to ship, and is optimistic about its future, it
      cannot guarantee these results will continue because the company cannot judge
      whether customers who are placing orders for its system are indicative of long
      term sustained demand. The company can only predict sales when it actually
      has
      an order at this time.





The
      Company expects that its expenses will be a total of $200,000 for the next
      six
      months, not counting promotional expenses for the selling of the guns or cost
      of
      manufacturing the products. The Company expects that it can cover these expenses
      with the revenue for its current contract with New York State. After six months,
      the Company would have to depend on system sales to cover the monthly expenses.
      The Company expects that selling five systems per month, it can sustain itself
      indefinitely.





13




We
      are
      able to manufacture the full line of equipment and manufacture and delivery
      of
      XIOM materials to those same customers. The company’s planning has not gone
      further than this until it could raise working capital for the seminars planned.
      Lack of success with the promotional seminars would signal impaired general
      viability of the process. If the promotional seminars are a success, the system
      would become self-financing without the need of future cash infusions. The
      company cannot say with assurance what the results of those intended seminars
      might be. Our sale of 20 guns was achieved with promotional revenues of
      approximately $10,000. Based on this small and admittedly inconclusive sample,
      the company believes that it can generate sustained revenues by means of the
      promotional seminars.





The
      Company expects it has enough cash resources and revenue to cover expenses
      for
      the foreseeable future as long as it continues to slowly make sales and
      manufacture the guns and products. However, without increased revenues or
      additional capital, it is extremely likely that our marketing plan will not
      be
      able to be completed. This would significantly hamper out efforts to enter
      into
      the product niche as and when we would like.





The
      company believes that it has enough funds to operate for the next 12 months
      even
      if it does not sell any systems, the company bases that statement on the
      following facts and assumptions: (a) It has a $500,000 New York State contract
      to create a sophisticated spray unit that will apply XIOM’s patent-pending
      powder coatings for printing and paper rolls as well as oil and gas pipelines.
      (b) It has received from the U.S. Navy that within the next few months it will
      be receiving a U.S. Navy contract, for research to develop spray systems and
      powder coatings to finish and re-finish the exteriors and interiors of
      vessels.





On
      May
      17, 2006, we received a Phase I contract with The Department of the Navy for
      $70,000 to explore the technical feasibility of modifying standard XIOM
      equipment to operate on propane and air eliminating oxygen; to reduce the weight
      and physical size of the system; to simplify the functions; and to increase
      the
      spray pattern up to 9 to 12 inches. The option portion is to effect the lead
      into the Phase II contract whereby a deliverable system will be fabricated
      for
      the Navy’s testing at its warfare facility in Washington, D.C. The Navy is
      highly interested in the use of this system for applying XIOM coatings to the
      interior of difficult to reach areas on ship board spaces, hence the reasons
      for
      a smaller, lighter, more portable system.





The
      Phase
      II portion of this contract will be up to $750,000, if exercised by the
      Navy.





The
      company acknowledges, however, that it has never had a U.S. Navy contract before
      and that it may have to consult with experienced companies whose expertise
      is to
      perform on such government contracts





The
      source of liquidity would come from two sources. Internally, as we slowly
      increase sales, we would be able to increase the acquisition of raw materials
      and increase production. This would increase the short-term liquidity of the
      Company. Externally, we would gain long-term liquidity from the sale of common
      stock and from the exercise of warrants by the shareholders from the recent
      private placements.





14




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 exercise of the warrants by the
      shareholders.




**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.




15




**Item
      7. Financial Statements**




XIOM,
      Corp.  FINANCIAL
      STATEMENTS  AS
      OF AND
      FOR THE FISCAL YEARS ENDED  September
      30, 2006 and 2005


F-1




**N.
        Blumenfrucht CPA PC**
 **1040
        East 22** **nd** **Street**
 **Brooklyn
        New York 11210**
 **Tel.-
        718-692-2743**
 **Fax
        -718-692-2203**
  To
        The
        Board of Directors and Stockholders of XIOM Corp.
 
 We
        have
        audited the accompanying balance sheets of XIOM Corp. as of September 30,
        2006
        and 2005 and the related statements of operations, stockholders’ equity and cash
        flows for the years ended September 30, 2006 and 2005. These financial
        statements are the responsibility of the Company’s management. Our
        responsibility is to express an opinion on these financial statements based
        on
        our audits.
 
 We
        conducted our audits in accordance with standards of the Public Company
        Oversight Board (United States) Those standards require that we plan and
        perform
        the audit to obtain reasonable assurance about whether the financial statements
        are free of material misstatement. An audit includes examining, on a test
        basis,
        evidence supporting the amounts and disclosures in the financial statements.
        An
        audit also includes assessing the accounting principles used and significant
        estimates made by management, as well as evaluating the overall financial
        statement presentation. We believe that our audits provide a reasonable basis
        for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of XIOM Corp., as of the September
        30,
        2006 and 2005 and the results of its operations and its cash flows for the
        years
        ended September 30, 2006 and 2005 in conformity with accounting principles
        generally accepted in the United States.
 
 The
        accompanying financial statements have been prepared assuming that XIOM Corp.
        will continue as a going concern. As discussed in Note 16 to the financial
        statements, the Company has an accumulated deficit of approximately $245,000.
        The Company incurred a net loss for the period ended September 30, 2006 of
        approximately $800,000 and has working capital of approximately $130,000
        These
        factors raise substantial doubts about its ability to continue as a going
        concern. Management’s plans in regard to these matters are also described in
        Note 16. The financial statements do not include any adjustments that might
        result from the outcome of this uncertainty
 
 Brooklyn
        New York
 January
        10, 2007
 
 /s
        / N.
        Blumenfrucht CPA PC
  F-2


**XIOM,
        Corp.**
 **Balance
        Sheets**
  **As
                  Of September 30,****2006**
              
              **2005****Assets****Current
                  Assets****Cash
                  and Cash Equivalents**
              
              **$**
              **90,495**
              
              **$**
              **20,077****Accounts
                  Receivable, Net of****Allowance
                  for Doubtful Accounts**
              
              
              **126,191**
              
              
              **13,882****Inventory**
              
              
              **54,800**
              
              
              **11,010****Prepaid
                  Expenses**
              
              
              **99,378**
              
              
              **0****Other
                  Current Assets**
              
              
              **21,117**
              
              
              **0****Total
                  Current Assets**
              
              
              **391,981**
              
              
              **44,969****Fixed
                  Assets, Net of Accumulated****Depreciation
                  & Amortization**
              
              
              **98,953**
              
              
              **45,882****Other
                  Assets****Patents
                  Pending, Net of****Accumulated
                  Amortization**
              
              
              **163,445**
              
              
              **114,100****Retainage
                  Receivable**
              
              
              **22,377**
              
              
              **6,258****Security
                  Deposits**
              
              
              **6,815**
              
              
              **2,148****Total
                  Other Assets**
              
              
              **192,637**
              
              
              **122,506****Total
                  Assets**
              
              **$**
              **683,571**
              
              **$**
              **213,357****Liabilities
                  and Stockholders' Equity (Deficit)****Current
                  Liabilities****Accounts
                  Payable and****Accrued
                  Expenses**
              
              **$**
              **204,889**
              
              **$**
              **33,196****Accrued
                  Compensation**
              
              
              **0**
              
              
              **120,000****Notes
                  Payable**
              
              
              **53,578**
              
              
              **14,000****Total
                  Current Liabilities**
              
              
              **258,467**
              
              
              **167,196****Long-Term
                  Liabilities****Shareholder
                  Loan**
              
              
              **0**
              
              
              **138,937****Total
                  Liabilities**
              
              
              **258,467**
              
              
              **306,133****Common
                  Stock, Subject To Rescission Rights**
              
              
              **670,399**
              
              
              **0****Stockholders'
                  Equity (Deficit)****Common
                  Stock**
              
              
              **653**
              
              
              **584****Additional
                  Paid-In Capital**
              
              
              **1,444,415**
              
              
              **791,182****Retained
                  Earnings (Deficit)**
              
              
              **(1,690,363**
              **)**
              ****
              **(884,542**
              **)****Total
                  Stockholders' Equity (Deficit)**
              
              
              **(245,295**
              **)**
              ****
              **(92,776**
              **)****Total
                  Liabilities and****Stockholders'
                  Equity Deficit)**
              
              **$**
              **683,571**
              
              **$**
              **213,357**
 **See
          accompanying notes to financial statements**
  F-3
  **XIOM,
          Corp.**
 **Statements
          of Operations**
  **For
                    The Years Ended September 30,****2006**
                
                **2005****Sales**
                
                **$**
                **629,336**
                
                **$**
                **184,445****Cost
                    of Sales**
                
                
                **423,415**
                
                
                **145,601****Gross
                    Profit**
                
                
                **205,921**
                
                
                **38,844****General
                    and Administrative Expenses**
                
                
                **1,007,242**
                
                
                **452,646****Operating
                    Income (Loss)**
                
                
                **(801,321**
                **)**
                ****
                **(413,802**
                **)****Other
                    Income (Expenses)**
                
                
                **(4,500**
                **)**
                ****
                **0****Net
                    Income (Loss)**
                
                
                **($805,821**
                **)**
                ****
                **($413,802**
                **)****Basic
                    and Diluted Income (Loss) per Share**
                
                
                **($0.13**
                **)**
                ****
                **($0.07**
                **)****Weighted
                    Average Number of Shares Outstanding**
                
                
                **6,374,448**
                
                
                **5,715,399**
  **See
        accompanying notes to financial statements**
  F-4
  **XIOM,
          Corp.**
 **Statements
          of Stockholders' Equity (Deficit)**
 **For
          The Years Ended September 30, 2006 and 2005**
  **Common
                    Stock**
                
                **Additional**
                
                **Retained**
                
                **Total****Per
                    Share**
                
                **Number
                    of**
                
                **Par**
                
                **Paid-In**
                
                **Earnings**
                
                **Shareholders'****Amount**
                
                **Shares**
                
                **Value**
                
                **Capital**
                
                **(Deficit)**
                
                **Equity
                    (Deficit)****Balance,
                    September 30, 2004**
                
                
                
                
                
                **5,576,373**
                
                **$**
                **557**
                
                **$**
                **551,930**
                
                
                **($470,740**
                **)**
                
                **81,747****Shares
                    issued pursuant to a private placement****of
                    restricted common stock in March 2005**
                
                **$**
                **0.75**
                
                
                **157,062**
                
                
                **16**
                
                
                **117,783**
                
                
                
                
                
                **117,799****Non-employee
                    option grant in March 2005**
                
                
                
                
                
                
                
                
                
                
                
                **40,000**
                
                
                
                
                
                **40,000****Shares
                    issued for services during the year****ended
                    September 30, 2005**
                
                **$**
                **0.75**
                
                
                **98,640**
                
                
                **10**
                
                
                **73,970**
                
                
                
                
                
                **73,980****Shares
                    issued to purchase fixed assets****in
                    July 2005**
                
                **$**
                **0.75**
                
                
                **10,000**
                
                
                **1**
                
                
                **7,499**
                
                
                
                
                
                **7,500****Net
                    (Loss) for the year ended September 30, 2005**
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                **(413,802**
                **)**
                
                **(413,802**
                **)****Balance,
                    September 30, 2005**
                
                
                
                
                
                **5,842,075**
                
                **$**
                **584**
                
                **$**
                **791,182**
                
                
                **($884,542**
                **)**
                
                **($92,776**
                **)****Shares
                    issued for services during the year****ended
                    September 30, 2006**
                
                **$**
                **0.75**
                
                
                **15,030**
                
                
                **2**
                
                
                **11,271**
                
                
                
                
                
                **11,273****Shares
                    issued for services during the year****ended
                    September 30, 2006**
                
                **$**
                **1.30**
                
                
                **128,484**
                
                
                **13**
                
                
                **167,016**
                
                
                
                
                
                **167,029****Exercise
                    of non-quaified options in March 2006**
                
                **$**
                **0.75**
                
                
                **460,000**
                
                
                **46**
                
                
                **344,954**
                
                
                
                
                
                **345,000****Exercise
                    of non-quaified options in September 2006**
                
                **$**
                **0.75**
                
                
                **53,333**
                
                
                **5**
                
                
                **39,995**
                
                
                
                
                
                **40,000****Exercise
                    of non-quaified options in September 2006**
                
                **$**
                **1.50**
                
                
                **33,333**
                
                
                **3**
                
                
                **49,997**
                
                
                
                
                
                **50,000****Non-employee
                    option grant in March 2006**
                
                
                
                
                
                
                
                
                
                
                
                **40,000**
                
                
                
                
                
                **40,000****Net
                    (Loss) for the year ended September 30, 2006**
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                **(805,821**
                **)**
                
                **(805,821**
                **)****Balance,
                    September 30, 2006**
                
                
                
                
                
                **6,532,255**
                
                
                **653**
                
                
                **1,444,415**
                
                
                **(1,690,363**
                **)**
                
                **(245,295**
                **)**
  **See
        accompanying notes to financial statements.**
  F-5
  **XIOM,
          Corp.** **Statements
            of Cash Flow**
  **For
                    The Years Ended September 30,****2006**
                
                **2005****Cash
                    Flows from Operating Activities:****Net
                    Income (Loss)**
                
                
                **($805,821**
                **)**
                ****
                **($413,802**
                **)****Adjustments
                    to reconcile net income (loss) to****net
                    cash used in operating activities:****Depreciation
                    and Amortization**
                
                
                **21,530**
                
                
                **13,218****Issuance
                    of Shares for Services**
                
                
                **178,302**
                
                
                **73,980****Non-employee
                    option grant**
                
                
                **40,000**
                
                
                **40,000****(Increase)
                    decrease in:****Accounts
                    Receivable, Net**
                
                
                **(112,309**
                **)**
                ****
                **(2,002**
                **)****Inventory**
                
                
                **(43,790**
                **)**
                ****
                **(8,924**
                **)****Prepaid
                    Expenses**
                
                
                **(99,378**
                **)**
                
                **0****Other
                    Current Assets**
                
                
                **(2,476**
                **)**
                ****
                **1,316****Retainage
                    Receivable**
                
                
                **(16,119**
                **)**
                
                **20,076****Security
                    Deposits**
                
                
                **(4,667**
                **)**
                
                **0****Accounts
                    Payable and****Accrued
                    Expenses**
                
                
                **211,693**
                
                
                **9,481****Accrued
                    Compensation,****Before
                    Non-Cash Adjustments**
                
                
                **120,000**
                
                
                **120,000****Total
                    Adjustments**
                
                
                **292,786**
                
                
                **267,145****Net
                    cash provided (used) in operating activities**
                
                
                **(513,035**
                **)**
                ****
                **(146,657**
                **)****Cash
                    Flows from Investing Activities:****Purchase
                    of Additional Overseas Patents**
                
                
                **(58,132**
                **)**
                ****
                **0****Purchase
                    of Fixed Assets**
                
                
                **(65,814**
                **)**
                ****
                **(19,627**
                **)****Net
                    cash provided (used) by investing activities**
                
                
                **(123,946**
                **)**
                ****
                **(19,627**
                **)****Cash
                    Flows from Financing Activities:****Sale
                    of Restricted Common Stock,****Subject
                    to Rescission Rights**
                
                
                **670,399**
                
                
                **0****Sale
                    of Restricted Common Stock**
                
                
                **0**
                
                
                **117,799****Proceeds
                    from Notes Payable**
                
                
                **39,578**
                
                
                **14,000****Proceeds
                    from (repayment of) Shareholder Loan,****Before
                    Non-Cash Adjustments**
                
                
                **(2,578**
                **)**
                
                **51,236****Net
                    cash provided (used) by financing activities**
                
                
                **707,399**
                
                
                **183,035****Net
                    increase (decrease) in cash and cash equivalents**
                
                
                **70,418**
                
                
                **16,751****Cash
                    & Cash Equivalents, Beginning of Period**
                
                
                **20,077**
                
                
                **3,326****Cash
                    & Cash Equivalents, End of Period**
                
                **$**
                **90,495**
                
                **$**
                **20,077****(Continued)**
  F-6
 **XIOM,
            Corp.** **Statements
              of Cash Flow** **For
                The Years Ended September 30, **(Continued)****
 **2006**
                
                
                **2005****Supplemental
                    Disclosures****Non-Cash
                    Financing and Investing Activities:****Options
                    exercised in exchange for Accrued Compensation,****Shareholder
                    Loan and Accrued Professional Fees**
                
                
                **435,000**
                
                
                **0****Issuance
                    of Shares for Services**
                
                **$**
                **178,302**
                
                **$**
                **73,980****Non-employee
                    option grant**
                
                **$**
                **40,000**
                
                **$**
                **40,000****Issuance
                    of Shares to Purchase Fixed Assets**
                
                **$**
                **0**
                
                **$**
                **7,500****Interest
                    and Taxes:****Interest
                    Expense**
                
                **$**
                **4,500**
                
                **$**
                **0****Income
                    Taxes**
                
                **$**
                **500**
                
                **$**
                **500**
  **See
        accompanying notes to financial statements**
  F-7
 
 XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND 2005
  1.
                  SUMMARY
                      OF SIGNIFICANT ACCOUNTING POLICIES
  ENTITY
            AND ORGANIZATION
 
 XIOM,
            Corp., formerly Panama Industries, Ltd., (“XIOM or “the Company”) was
            incorporated in March 1998, but was inactive until May 1999. At that
            time, all
            operating assets and liabilities of Thermaltec International Corp.
            (“Thermaltec”), the previous parent company, were transferred into XIOM. In June
            2001, XIOM was spun out from Thermaltec upon which the shareholders of
            Thermaltec received one common share of XIOM for every three common shares
            of
            Thermaltec. During fiscal 2003 and 2004, XIOM developed a patented industrial
            based thermal spray coating technology which sold directly to commercial
            customers and coating contractors.
  USE
            OF
            ESTIMATES
 
 The
            preparation of financial statements in conformity with generally accepted
            accounting principles 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.
  REVENUE
            RECOGNITION
 
 Revenues
            from contracts which have terms greater than one month and are fixed-price
            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. On those contracts which are not fixed-price in nature and
            which
            contractually require the billing of actual costs and expenses incurred
            during
            the period, revenue is recognized as the actual amount invoiced during
            the
            period. Revenues from the patented industrial thermal spray technology
            are
            currently being generated from both long-term and short-term contracts,
            as
            defined.
 
 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.
            The Company has experienced no material contract losses to date.
  CASH
            AND
            CASH EQUIVALENTS
 
 For
            the
            purpose of financial statement presentation, the Company includes cash
            on
            deposit, money market funds, amounts held by brokers in cash accounts
            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 of various parts, materials and supplies utilized in the assembly
            and
            the operation of the thermal spray coating system 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.
  F-8
  XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND 2005
  EARNINGS
            (LOSS) PER SHARE
 
 The
            Company has adopted SFAS No. 128, “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.
  INCOME
            TAXES
 
 The
            Company has adopted Financial Accounting Standards Board Statement No.
            109,
“Accounting for Income Taxes”.
  DEFERRED
            INCOME TAXES
 
 Deferred
            tax assets arise principally from net operating losses and capital losses
            available for carryforward against future years’ taxable income.
  RECLASSIFICATIONS
  Certain
            accounts in the prior-year financial statements have been reclassified
            for
            comparative purposes to conform to the presentation in the current-year
            financial statements.
  RECENTLY
            ISSUED ACCOUTING PRONOUNCEMENTS
 
 There
            are
            no recently issued accounting standards that would have a material impact
            on
            these financial statements **.**
  2.
                  INVENTORY
  As
                        of September 30,2006
                    
                    2005Inventory
                        consists of the following:Parts
                        and Supplies
                    
                    $
                    32,974
                    
                    $
                    5,195Powders
                    
                    
                    21,826
                    
                    
                    5,815Total
                        Inventory
                    
                    $
                    54,800
                    
                    $
                    11,010
  3.
                  PREPAID
                      EXPENSES
  Prepaid
            Expenses represents the net balance remaining to be written-off in fiscal
            2007
            related to advance payments made
            for
            two separate agreements that commenced in July 2006; one for marketing
            services
            in Asia and the other for merger
            and acquisition services. Both contracts, which are with two separate
            groups,
            have a one year term and are
 not
            renewable. Payment for one contract was made in restricted common stock
            and the
            other was made in both cash and
            restricted common stock. Shares were issued based on the fair market
            value of
            the services to be provided, converted
            at $1.30 per share, the estimated fair market value of the common stock
            on the
            date of both issuances.
  F-9
  XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND 2005
  4.
                  FIXED
                      ASSETS
  Estimated
                        useful
                    
                    As
                        of September 30,Life
                        - years
                    
                    2006
                    
                    2005Machinery
                        and equipment
                    
                    
                    5-10
                    
                    $
                    66,945
                    
                    $
                    40,873Vehicles
                    
                    
                    3-5
                    
                    
                    16,411
                    
                    
                    16,411Office
                        Equipment
                    
                    
                    3-5
                    
                    
                    11,781
                    
                    
                    900Furniture
                        and Fixtures
                    
                    
                    5-7
                    
                    
                    5,543
                    
                    
                    -0-Leasehold
                        improvements
                    
                    
                    5-31.5
                    
                    
                    33,438
                    
                    
                    10,120134,118
                    
                    
                    68,304Less
                        accumulated depreciationand
                        amortization
                    
                    
                    
                    
                    
                    (35,165
                    )
                    
                    (22,422
                    )Net
                        property and equipment
                    
                    
                    
                    
                    $
                    98,953
                    
                    $
                    45,882
 Fixed
            asset depreciation and amortization for the years ended September 30,
            2006 and
            2005 was $12,743 and $6,018, respectively.
  5.
                  PATENTS
                      PENDING
 
 In
            August
            2004, the two operating officers of XIOM, who are also shareholders,
            irrevocably
            transferred to the Company all current and future rights, title and interest
            in
            all technology and process patents pending related to the low temperature
            thermal spray gun, modular control unit and material powder feeder. In
            exchange
            for transferring their individual ownerships, one of the officers received
            375,000 shares of restricted common stock and the other officer, who
            is also the
            inventor of record, received 850,000 shares of restricted common stock.
            These
            shares were valued at $.10 per share, which approximated the fair market
            value
            of the common stock on the date of the exchange. As such, the gross carrying
            value of these domestic patents is $122,500. During fiscal 2006, the
            Company
            applied for, and received, overseas patents pending in Asia and Europe
            for the
            thermal spray technology and process related to the low temperature thermal
            spray gun, modular control unit and material powder feeder. Legal fees
            and
            expenses incurred to obtain these patents totaled approximately $58,000.
            All
            patents are being amortized on a straight-line basis over their stated
            terms,
            which is seventeen (17) years for each. Amortization expense for fiscal
            2006 and
            2005 was $8,787 and $7,200, respectively. Estimated amortization expense
            related
            to these patents will be approximately $10,500 per year for fiscal 2007
            through
            fiscal 2011.
  6.
                  RETAINAGE
                      RECEIVABLE
 
 Retainage
            receivable represents the cumulative amount held-back from each
            percentage-of-completion billing pursuant to long-term contracts. Such
            amounts
            will be paid to the Company upon the completion of each contract and
            final
            customer approval. The net increase (decrease) in Retainage Receivable
            for
            fiscal 2006 and 2005 was $16,119 and ($20,076), respectively. As of September
            30, 2006, the Retainage Receivable balance of $22,377 is not expected
            to be
            collected in the coming fiscal year.
  7.
                  ACCRUED
                      COMPENSATION
 
 Accrued
            Compensation represents compensation that has been accrued for each of
            the two
            operating officers of the Company. The value of their services was determined
            to
            be $60,000 each for both fiscal 2006 and 2005. During fiscal 2006, $240,000
            of
            Accrued Compensation was used by the two operating officers as consideration
            for
            the exercise of certain non-qualified stock options granted to them in
            March
            2005 and March 2006 (See Note 12.).
 
 8.
                  NOTES
                      PAYABLE
 
 Notes
            Payable at September 30, 2005 represents several non-interest bearing
            demand
            notes payable to certain individuals in varying amounts. At September
            30, 2006,
            Notes Payable included thirty $1,000 convertible discounted notes, with
            redemption rights, dated October 1, 2005. These notes each had a one
            year term
            and a 15% discount, which yielded a 17.6% rate of return, and are convertible
            into 1,000 shares of restricted common stock for each $1,000 note at
            any time,
            by the holder, from month one through month twelve. The Company can redeem
            the
            notes at any time during the first eleven months by paying the face amount
            of
            the notes. The holders elected to convert these notes in the twelfth
            month and,
            as a result, 30,000 shares of restricted common stock were issued to
            them
            subsequent to the balance sheet date. Interest expense related to these
            notes
            was $4,500 for fiscal 2006. The balance of Notes Payable at September
            30, 2006,
            approximately $23,500, represents several non-interest bearing demand
            notes
            payable to certain individuals in varying amounts.
  F-10
 
 XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND2005
  9.
                  SALES
                      TO MAJOR CUSTOMERS
  For
            the
            fiscal years ending September 30, 2006 and 2005, the Company had one
            major
            customer who accounted for approximately 25% and 40%, respectively, of
            total
            sales. This same customer represented approximately 16% and 0% of trade
            accounts
            receivable as of September 30, 2006 and 2005, respectively.
  10.
                  COMMITMENTS
                      AND CONTINGENCIES
 
 LEASES
 
 XIOM
            leases office space on a month-to-month basis for $1,450 per month. In
            addition,
            the Company leases separate manufacturing and warehouse facilities pursuant
            to a
            four year lease that expires May, 31 2010 for $6,000 per month. Rent
            expense,
            net of sub-lease income, for fiscal 2006 and 2005 was approximately $60,000
            and
            $29,500, respectively.
 
 CONSULTING
            AGREEMENTS
 
 The
            Company has an agreement with a consulting engineer who provides technical
            support and testing services directly related to the thermal spray coating
            technology and the powder formulas utilized in the application process.
            This
            agreement calls for a base ten hours of work per week at $50 per hour
            plus
            reimbursement for out-of-pocket expenses, as well as 8,400 shares of
            restricted
            common stock due in advance of each contract term. Any time incurred
            beyond the
            base weekly hours is payable at $50 per hour, plus 70 shares of restricted
            common stock for each hour worked above the ten base hours, valued at
            the
            estimated fair market value of the common stock on the date such shares
            are
            earned. This contract automatically renews each May, but was terminated
            by
            mutual agreement between the Company and the engineer effective December
            31,
            2006.
 
 XIOM
            has
            an agreement with a consulting group that provides merger, acquisition
            and
            related services to the Company for a monthly retainer of $4,000 commencing
            September 2005. This monthly retainer was increased to $6,000 upon the
            initial
            annual renewal in September 2006. After the initial annual renewal, this
            agreement renews year to year by written agreement between both the Company
            and
            the consulting group.
 
 The
            Company has an agreement with a consultant to provide recurring accounting,
            tax
            and financial management services. Compensation is based on one third
            (33%) of
            any and all compensation paid to President of XIOM. Such compensation
            can be in
            the form of cash, common stock or options, or any combination thereof,
            and is
            paid in like kind at the same time said compensation is paid to the President.
            This agreement may be terminated by either party upon ninety days written
            notice
            to the other party.
  11.
                  COMMON
                      STOCK
  As
                        of September 30,2006
                    
                    2005Common
                        stock is as follows:Common
                        stock, $.0001 par value, 10,000,000 shares authorized.Shares
                        issued and outstanding
                    
                    
                    7,095,973
                    
                    
                    5,842,075Par
                        Value
                    
                    $
                    710
                    
                    $
                    584
  In
            March
            2005, the Company completed a private placement offering in which it
            sold and
            issued 157,062 shares of restricted common stock at a price of $.75 per
            share.
            In addition, the stockholders that purchased these shares also received
            a
            warrant to purchase one share of common stock for each share they purchased.
            Each warrant has an exercise price of $.75 per share and a term of one
            year. In
            February 2006, the Board of Directors of XIOM, Corp approved to extend
            the
            exercise period of the warrants issued with the private placement offering
            in
            March 2005 for an additional twelve months, through February 2007. The
            Black-Scholes-Merton pricing model was utilized to determine the incremental
            value of these warrants on the modification date. Specifically, the assumptions
            used in the calculation included the expected term of eleven months,
            a risk free
            rate of 3.5% and a market price volatility factor of approximately 20%.
            The
            increase to the fair value, equal to the excess of the fair value of
            the
            revalued warrants over the fair value of the original warrants on the
            date of
            modification, of approximately $8,000, was determined not to be material.
            As
            such, there was no additional accounting treatment required as a result
            of
            extending the exercise period. The shares issued in this private placement,
            as
            well as the shares underlying the warrants issued, were registered in
            the
            Company’s SB-2 filing and prospectus that became effective in October 2006.
  F-11
  XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND 2005
  During
            fiscal 2005 and 2006, the Company issued 98,640 shares and 143,514 shares,
            respectively, of restricted common stock to several vendors as consideration
            for
            engineering consulting, merger and acquisition consulting and marketing
            services
            provided during each fiscal year. These shares were issued based on the
            fair
            market value of the services provided converted at $.75 per share and
            $1.30 per
            share, the estimated fair market value of the common stock on the date
            of each
            issuance.
 
 During
            fiscal 2006, the company sold and issued, in two separate private placements,
            563,718 shares of restricted common stock for a total of $670,399. Because
            these
            shares were issued during, but not included in, the Company’s recent SB-2
            registration statement, such shares are subject to rescission rights
            by the
            shareholders who purchased these shares. Common stock, subject to rescission
            rights, has not been included in Stockholders’ Equity, but has been disclosed
            separately on the face of the balance sheet (See Note 15.).
  12.
                  STOCK
                      OPTIONS
 
 On
            March
            1, 2005, XIOM granted three separate non-qualified options to purchase
            a total
            of 700,000 shares of restricted common stock at a price of $.75 per share,
            which
            approximates the fair market value on the date of the grant. The two
            operating
            officers, who are also shareholders, each received an option to purchase
            300,000
            restricted common shares and a consultant to the company received an
            option to
            purchase 100,000 restricted common shares as partial consideration for
            providing
            accounting services for fiscal 2005. The options are fully vested and
            are
            exercisable, in whole or in part, at the sole discretion of the grantee
            through
            February 28, 2010 and may not be assigned, or otherwise transferred.
            The value
            of the non-employee option was determined based on a calculated value
            method
            using the historical volatility of the industry sector index related
            to the
            small-cap version of the Industrial Suppliers sub-sector, within Support
            Services for Industrial Goods and Services. Specifically, the Company
            used the
            Black-Scholes-Merton option-pricing formula, which produced a value of
            $.40 per
            option share. This resulted in the Company recording an additional consulting
            expense of $40,000 for fiscal 2005 that was treated as Additional Paid-In
            Capital. Assumptions used in the calculation included the contractual
            life of
            the option as the expected term, a risk free rate of 3.5% and a market
            price
            volatility factor of 20%.
 
 On
            October 1, 2005, XIOM granted non-qualified options to several employees
            of the
            Company to purchase a total of 67,500 shares of restricted common stock
            at a
            price of $.75 per share, which approximates the fair market value on
            the date of
            the grant. The options are fully vested and are exercisable, in whole
            or in
            part, at the sole discretion of the grantee through September 30, 2010
            and may
            not be assigned or otherwise transferred.
 
 On
            March
            1, 2006, XIOM granted three separate options to purchase a total of 350,000
            shares of restricted common stock at a price of $1.50 per share, which
            approximates the fair market value on the date of the grant. The two
            operating
            officers, who are also shareholders, each received an option to purchase
            150,000
            restricted common shares and a consultant to the company received an
            option to
            purchase 50,000 restricted common shares as partial consideration for
            providing
            accounting services for fiscal 2006. The options are fully vested and
            are
            exercisable, in whole or in part, at the sole discretion of the grantee
            through
            February 28, 2011 and may not be assigned, or otherwise transferred.
            The value
            of the non-employee option was determined based on a calculated value
            method
            using the historical volatility of the industry sector index related
            to the
            small-cap version of the Industrial Suppliers sub-sector, within Support
            Services for Industrial Goods and Services. Specifically, the Company
            used the
            Black-Scholes-Merton option-pricing formula, which produced a value of
            $.80 per
            option share. This resulted in the Company recording an additional consulting
            expense of $40,000 for fiscal 2006 that was treated as Additional Paid-In
            Capital. Assumptions used in the calculation included the contractual
            life of
            the option as the expected term, a risk free rate of 3.5% and a market
            price
            volatility factor of 20%.
 
 In
            March
            2006, the two operating officers, who are also shareholders, partially
            exercised
            their March 2005 options and purchased 420,000 shares of restricted common
            stock
            at $.75 per share. Accrued Compensation and the Shareholder Loan were
            off-set
            and used as consideration for acquiring these option shares. A consultant
            to the
            company also partially exercised his March 2005 options and purchased
            40,000
            shares of restricted common stock at $.75 per share. Accrued professional
            fees
            were off-set and used as consideration for acquiring these option
            shares.
 
 In
            September 2006, the two operating officers, who are also shareholders,
            partially
            exercised their March 2005 and March 2006 options, and purchased 40,000
            shares
            of restricted common stock at $.75 per share and 33,333 shares of restricted
            common stock at $1.50 per share. Accrued Compensation and the Shareholder
            Loan
            were off-set and used as consideration for acquiring these option shares.
            A
            consultant to the company also partially exercised his March 2005 options
            and
            purchased 13,333 shares of restricted common stock at $.75 per share.
            Accrued
            professional fees were off-set and used as consideration for acquiring
            these
            option shares.
  F-12
  XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND 2005
  13.
                  INCOME
                      TAXES
 
 As
            of
            September 30, 2006, the Company had net operating and capital loss carryforwards
            of approximately $1,700,000 and $533,000, respectively, which expire
            in 2016 and
            2011, respectively.
 
 At
            September 30, 2006 and 2005, the Company provided 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.
  14.
                  RELATED
                      PARTY TRANSACTIONS
 
 The
            Shareholder Loan balance represents the net amount owed to one
            officer/shareholder for monies advanced from time to time to cover the
            Company’s
            short-term cash flow needs. This loan is unsecured, non-interest bearing
            and has
            no specific term for repayment. During fiscal 2006, the Company converted
            $155,000 of Shareholder Loan as consideration for purchasing 193,333
            restricted
            shares of common stock upon the exercise of certain stock options held
            by the
            officer/shareholder.
  15.
                  COMMON
                      STOCK, SUBJECT TO RESCISSION RIGHTS
 
 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. XIOM may
            be
            considered to have commenced a public offering of securities on May 6,
            2005,
            when they first filed their registration statement on Form SB-2.
 Subsequent to that date, from January 1, 2006 through October 20, 2006
            (the effective date of their registration statement), the Company offered
            and
            sold 563,718 restricted shares of common stock for a total of $670,399.
            Although
            XIOM made these transactions in reliance upon claimed exemptions from
            registration that the Company believed were valid, the purchasers may
            claim that
            the transactions violated federal securities laws.  If any of these
            transactions did violate federal securities laws, the purchasers in those
            transactions may have claims against XIOM for damages or for rescission of their
            purchase transaction and recovery of the full subscription price paid,
            which
            would be a total of $670,399, plus interest.  As of the date of these
            financial statements, none of the purchasers has made or threatened any
            claim
            against the Company alleging violation of the federal securities laws.
            In the
            event the purchasers of these securities successfully asserted claims
            for rescission it would
            have a substantial adverse effect on the business and on the ability
            to continue
            to operate. XIOM may not have sufficient funds available to pay such
            claims, and
            there is no assurance that the Company would be able to obtain such funds
            either
            from the proceeds of any offering, or from other sources.  In that event,
            the Company may be forced to cease operations and liquidate our available
            assets
            to pay our liabilities, including, but not limited to, the rescission claims.
  16.
                  GOING
                      CONCERN
 
 The
            accompanying financial statements have been prepared assuming that the
            Company
            will continue as a going concern. As shown in the financial statements
            as of
            September 30, 2006, the Company  has
            a
            total Stockholders’ Deficit of approximately $245,000  and
            has
            working capital of only approximately $130,000 . Additionally, the Company incurred a Net Loss of approximately $801,000
            for the
            year ended September 30, 2006 and a Net Loss of approximately $414,000,
            for the
            year ended September 30, 2005. These factors raise substantial doubt
            about the
            Company’s ability to continue as a going concern. The financial statements do
            not include any adjustments relating to the recoverability and classification
            of
            recorded assets, or the amounts and classification of liabilities that
            might be
            necessary in the event the Company cannot continue in existence. However,
            the
            Company has seen a significant increase in sales orders for the patented
            industrial thermal spray technology from the second quarter through the
            fourth
            quarter of fiscal 2006. Furthermore, the Company plans to raise money
            through a
            series of private placement transactions in fiscal 2007 as well as expand
            sales
            by significantly increasing domestic marketing efforts as well as entering
            into
            several joint ventures and strategic alliance relationships. As a result
            of
            these factors, management believes it will have sufficient resources
            to meet the
            Company’s cash flow requirements for at least twelve months following the date
            of these financial statements.
 
 F-13
  XIOM,
            Corp.
 NOTES
            TO
            FINANCIAL STATEMENTS
 FOR
            THE
            YEARS ENDED SEPTEMBER 30, 2006 AND 2005
  17.
                  SUBSEQUENT
                      EVENTS
  On
            October 15, 2006, XIOM granted three separate options to purchase a total
            of
            350,000 shares of restricted common stock at a price of $1.75 per share,
            which
            approximates the fair market value on the date of the grant. The two
            operating
            officers, who are also shareholders, each received an option to purchase
            150,000
            restricted common shares and a consultant to the company received an
            option to
            purchase 50,000 restricted common shares as partial consideration for
            providing
            accounting services for fiscal 2007. The options are fully vested and
            are
            exercisable, in whole or in part, at the sole discretion of the grantee
            through
            October 14, 2011 and may not be assigned, or otherwise transferred.
 
 Pursuant
            to an agreement with an investment fund in June 2006, XIOM is responsible
            to pay
            a penalty, in the form of common stock and warrants, equal to 2% of the
            total
            investment per month beginning 90 days after the investment and until
            notification is received confirming their effectiveness as a publicly
            traded
            company. The agreement also requires that XIOM exchange the 192,307 restricted
            common shares that the fund purchased in June for registered shares upon
            the
            effectiveness of the registration statement, which included 500,000 shares
            for
            sale to the public. As a result of the effective date being October 20,
            2006,
            the Company issued 25,000 shares of common stock and 25,000 warrants,
            with an
            exercise price of $1.30, in December 2006 as satisfaction for the penalty.
            The
            restricted common shares were also exchanged for registered common shares
            at
            that time.
 
 During
            the first quarter of fiscal 2007, XIOM established several separate equity
            interests with joint venture partners in China, South East Asia, Massachusetts
            and Kentucky. The Company’s equity interest ranges from 35% to 45% of the entire
            legal business entity depending on several factors including the level
            of
            technology to be deployed, the related geography and size of the potential
            marketplace. The equity interests were acquired in exchange for the Company
            providing its patented thermal spray technology, application training
            services
            and product support. The principal in the Kentucky joint venture received
            an
            option, dated September 1, 2006, to purchase 100,000 shares of restricted
            common
            stock at $1.10 per share as consideration for his services in establishing
            and
            setting up a separate corporation as a master licensee of XIOM. The option
            is
            fully vested and is exercisable, in whole or in part, at the sole discretion
            of
            the grantee through August 31, 2008 and may not be assigned, or otherwise
            transferred. This option was exercised in full and 100,000 shares of
            restricted
            common stock were issued in December 2006 in exchange for the entire
            exercise
            price of $110,000.
  F-14




**Item
      8. Changes In and Disagreements with Accountants on Accounting and Financial
      Disclosure**





None




**Item
      8a. Controls and Procedures**


**Disclosure
      Controls and Procedures**




As
      of the
      end of the period covered by this report, our management conducted an
      evaluation, under the supervision and with the participation of our chief
      executive officer and chief financial officer of the effectiveness of our
      disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
      under the Securities Exchange Act of 1934). Based on this evaluation, the
      officers concluded that our disclosure controls and procedures are effective
      to
      ensure that information required to be disclosed by our company in reports
      that
      we file or submit under the Securities Exchange Act of 1934 is recorded,
      processed, summarized and reported within the time periods specified in
      Commission rules and forms.





**Changes
      in Internal Controls over Financial Reporting**




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





**Item
  8b. Other Information**





None




**Part
      III**





**Item
      9. Directors, Executive Officers, Promoters and Control Persons; Compliance
      With
      Section 16(a) of the Exchange Act.**





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.








**Name**
            
            **Age**
            
            **Position**Andrew
                B. Mazzone
            
            63
            
            Chairman,
                President, Chief Accounting/Financial Officer and
                PromoterThomas
                Gardega
            
            57
            
            Executive
                Vice President, Director and
                Promoter




16




**Andrew
      Mazzone**




Mr.
      Mazzone has been the Chairman and President of the company since its inception
      in 1998. Mr. Mazzone was the President of TTI at the time of the spin-out.
      He
      resigned as Sole Officer and Director of TTI on November 1, 2001. Thereafter,
      when the targeting merger candidate for TTI fell through, TTI located a
      potential new target for acquisition and changed its name to Steam Clean USA,
      Inc. on or about August 15, 2002. On July 1, 2003, Steam Clean USA, Inc.
      acquired Humana Trans Services Group, Ltd. At this point Mr. Mazzone was invited
      to become Chairman of the Board of Directors. He served in that position until
      January 2004, when he resigned as Chairman but remained as a Director and until
      May 5, 2004, when he resigned from


the
      Board
      entirely. From 1970 until February 15, 1995, Mr. Mazzone was employed by Metco,
      Westbury, NY, a subsidiary of the Perkin Elmer Corp., a holding company, which
      subsidiary, Metco, was engaged in the business of development of metal spraying
      and metal powders. Mr. Mazzone, as President, resigned from Sulzer Metco after
      the acquisition of the Company in 1995. From 1995 to October, 2001 Mr. Mazzone
      was President of Thermaltec International.





At
      Metco,
      Mr. Mazzone held various positions, including as Director of Logistics, Director
      of Sales and Marketing, Director of Manufacturing, Executive Vice President
      and
      President.





Mr.
      Mazzone has degrees from Babson College, Babson Park, Massachusetts, in finance
      and an advanced degree in economics, with a specialty in economic history.
      Mr.
      Mazzone will devote full time to the efforts of the Company (See “Principal
      Stockholders”).





**Thomas
      Gardega**




Mr.
      Gardega is Executive Vice President and has been an employee of the company
      since September 24, 1999. Mr. Gardega brings to the Company a vast knowledge
      in
      the heat sprayed plastic coatings industry. Mr. Gardega was responsible as
      project manager for all field operations of electrical construction in the
      State
      of South Carolina for Basic Electrical, Inc. from January 1997 until January
      1999, including purchasing, manpower acquisition, managing field office, project
      management and scheduling, materials, equipment, permits, and meetings.





Mr.
      Gardega held a position in Perkin Elmer’s (a publicly traded company), division
      of Metco from 1978 to 1981 as special marketing representative and field service
      engineer. His function included training, customer support, materials, and
      applicable processes.





Mr.
      Gardega has held management positions in commercial electrical contracting
      projects throughout the United States. He also was President of National Thermal
      Spray, Inc., a developer and marketer of thermal coating systems from May 1985
      until December 1989. He is an acknowledged expert in large scale installation
      of
      electrical and communications systems. He graduated from Empire State College
      in
      New York majoring in business administration.





**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
      is
      attached to this Annual Report as Exhibit 14.1.





17




**Audit
      Committee and Audit Committee Financial Expert**




Our
      board
      of directors acts as our audit committee. No member of our board of directors
      is
      an “audit committee financial expert,” as that term is defined in Item 401(e) of
      Regulation S-B promulgated under the Securities Act. To date, we have conducted
      limited operations and generated only minimal revenue since inception. In light
      of the foregoing, and on evaluating our internal controls, our board of
      directors determined that our internal controls are adequate to insure that
      financial information is recorded, processed, summarized, and reported in a
      timely and accurate manner in accordance with applicable rules and regulations
      of the Securities and Exchange Commission. Accordingly, our board of directors
      concluded that the benefits of retaining an individual who qualifies as an
      “audit committee financial expert” would be outweighed by the costs of retaining
      such a person.





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. Currently, these
      reports are being prepared and are expected to be filed shortly.




**Item
      10. Executive Compensation**




For
      the
      fiscal year ended September 30, 2006, no Officer/Director has been compensated
      with salaries or other form of remuneration except as set forth
      below:





**Officer/Director
      Compensation:**




Each
      operating officer is entitled to an annual base salary of $60,000, plus
      reimbursement for documented out-of-pocket expenses. The Board of Directors
      also
      grants non-qualified options annually to each officer as additional future
      compensation for services rendered. The timing and extent of such option grants
      are made at the sole discretion of the Board of Directors and have an exercise
      price equal to the estimated fair-market-value on the date of the grant. There
      is no other compensation given beyond the annual base salaries and option
      grants. The following Summary Compensation Table sets forth the compensation
      for
      each executive officer for the past three fiscal years ended September
      30;





Summary
                  Compensation TableLong-term
                  Compensation;Name
                  & Position
              
              FiscalYear
              
              AnnualSalary
              
              Securities
                  Underlying OptionsAndrew
                  Mazzone,
              
              
              2004
              
              $
              60,000
              
              
              -0-Chairman
                  & President
              
              
              2005
              
              $
              60,000
              
              
              300,0002006
              
              $
              60,000
              
              
              150,000Thomas
                  Gardega
              
              
              2004
              
              $
              60,000
              
              
              -0-Executive
                  VP
              
              
              2005
              
              $
              60,000
              
              
              300,0002006
              
              $
              60,000
              
              
              150,000
 18




The
      following table details options granted to each executive officer in the last
      fiscal year ended September 30, 2006;


Option
                  Grants In Last Fiscal YearNumber
                  of Shares
              
              Percent
                  of Total
              
              Exercise
              
              ExpirationName
              
              Underlying
                  Options
              
              Options
                  Granted
              
              Price
                  To
                    Employees
              
              Date
                  ($/SH)Andrew
                  MazzoneChairman
                  & President
              
              
              50,000
              
              
              50
              %
              $
              1.50
              
              
              February
                  28, 2011Thomas
                  GardegaExecutive
                  VP
              
              
              150,000
              
              
              50
              %
              $
              1.50
              
              
              February
                  28, 2011




Option
                  Exercised In Last Fiscal YearName
              
              Number
                  of Options
                Exercised
              
              Exercise
                Price
                ($/SH)
              
              Unexercised
                Options
              
              Value
                  of Unexercised
                Options
                ($)Andrew
                  MazzoneChairman
                  & President
              
              
              300,000
              
              $
              0.75
              
              
              -0-
              
              
              -0-33,333
              
              $
              1.50
              
              
              116,667
              
              
              -0-Thomas
                  GardegaExecutive
                  VP
              
              
              160,000
              
              $
              0.75
              
              
              140,000
              
              $
              77,000


Although
      there was value of unexercised “in-the-money” options for the fiscal year ended
      September 30, 2006, that value was determined based on the estimated fair market
      value of the Company’s common stock, which was $1.30.





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.





19




**Director
      and Officer Insurance:**




The
      Company does not have directors and officers (“D & O”) liability insurance
      at this time.




**Item
      11. Security Ownership of Certain Beneficial Owners and Management**




The
      following table sets forth information as of January 16, 2007 with respect
      to
      the beneficial ownership of the 7,533,260 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
                  OwnershipAndrew
                  B. Mazzone
              
              
              1,236,592
              
              
              16.4
              %513
                  Dryden StreetWestbury,
                  NY 11590President
                  and DirectorThomas
                  Gardega
              
              
              734,786
              
              
              9.8
              %200
                  Landmark RoadConway,
                  SC 29527Executive
                  VP and DirectorJames
                  Zimbler (2)(4)
              
              
              728,334(2)(3
              )
              
              9.7%(2)(3
              )234
                  East College AvenueState
                  College, PA 16801Michael
                  S. Krome, Esq. (3)
              
              
              728,334(3
              )
              
              9.7
                  %(3
              )8
                  Teak CourtLake
                  Grove, NY 11755All
                  Officers and Directors as
              
              
              1,971,378
              
              
              26.2
              %A
                  Group (2 Persons)





*
            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
                200,000 shares owned by JWZ Holding, Inc., which is controlled and
                beneficially owned by James Zimbler.





(3)
            James
                Zimbler beneficially owns a total of 413,334 shares of common stock,
                which
                includes 200,000 shares owned by JWZ Holding, Inc. Mr. Zimbler is
                a
                control person, along with another shareholder, Michael S. Krome,
                Esq.,
                who owns 40,000 shares, in Alpha Advisors, LLC, which owns 275,000
                shares.
                The shares owned by Mr. Zimbler, JWZ Holding, Inc. and Alpha Advisors,
                LLC
                total 688,334 and when all of the ownership percentages are added,
                the
                control percentage is 9.1%, if voted as a block. The shares owned
                by
                Michael Krome and Alpha Advisors, LLC total 315,000 and when the
                ownership
                percentages are added, the control percentage 4.2%, if voted as a
                block.
                If Mr. Zimbler, Mr. Krome’s and Alpha Advisors, LLC’s beneficial
                ownerships are pooled, totaling 728,334 shares, the percentage is
                9.7%, if
                voted as a block.




20





**Item
      12. Certain Relationships and Related Transactions and Director
      Independence.**




The
      Company has issued the following shares to affiliates of the Company; the
      transactions took place on August 12, 2004:





We
      issued
      to our President, Director and Promoter, Andrew Mazzone, a total of 500,000
      shares of common stock, in two separate transactions, 125,000 shares for the
      repayment of Officer Loans to the Company and 375,000 shares for the irrevocable
      transfer of certain patent and technology rights used by the Company. The shares
      are valued at $0.10 per share for a total of $50,000. These rights included
      the
      creation of certain proprietary technologies and applications from Mr. Mazzone’s
      experience in the coating industry which enhanced the patents pending received
      by Mr. Gardega.





We
      issued
      to our Vice-President, Director and Promoter, Thomas Gardega, a total of 850,000
      shares of common stock, in two separate transactions, 475,000 shares for the
      irrevocable transfer of certain technology rights used by the Company, and
      375,000 shares for the irrevocable transfer of certain patent rights to the
      Company. The shares are valued at $0.10 per share for a total of $85,000. These
      patent rights are as contained in the patent descriptions filed as Exhibits
      to
      the Registration statement and with the United States Patent and Trademark
      Office.





We
      issued
      150,000 shares of common stock to DRB Consulting, Inc., for accounting and
      consulting services for fiscal 2003 and 2004. The shares are valued at $0.10
      per
      share for a total of $15,000. David Behanna is the control person of DRB
      Consulting, Inc. Mr. Behanna is not an officer or director or principal
      shareholder of the Company.





We
      issued
      200,000 shares of common stock to James W. Zimbler, a principal shareholder
      (through shares beneficial interest with Alpha Advisors, LLC.) for consulting
      services related to business organization and financial services performed
      by
      him in fiscal 2004. The shares are valued at $0.10 per share for a total of
      $20,000.





We
      issued
      40,000 shares to Michael S. Krome, Esq. a principal shareholder (through shares
      beneficial interest with Alpha Advisors, LLC), for legal services performed
      and
      to be performed on behalf of the Company. The shares are valued at $0.10 per
      share for a total of $4,000.




**Director
      Independence**




None
      of
      our current directors are considered independent at this time





21





**Item
      13. Exhibits**





**Index
      to Exhibits:**


SEC
                  REFERENCENUMBER
              
              TITLE
                  OF DOCUMENT3.1
              
              Articles
                  of Incorporation of the Registrant, as amended (1)3.2
              
              By-laws
                  of the Registrant, as amended (1)14.1
              
              Code
                  of Ethics (2)31.1
              
              Certification
                  of Chief
                  Executive Officer/Chief Financial/Accounting Officer pursuant to 18
                  U.S.C. Section 1350, as adopted, Pursuant to section 302 of the
                  Sarbanes-Oxley act of 2002 (2)32.1
              
              Certification
                  of Chief Executive Officer/Chief Financial/Accounting Officer 
                  pursuant to 18 U.S.C. Section 1350, as adopted, Pursuant to section
                  906 of
                  the Sarbanes-Oxley act of 2002 (2)





(1)
                      Previously
                          filed as an exhibit to the Company’s Form SB-2, as amended and filed on
                          May 6, 2005, and subsequent
                          filings.


(2)
              Filed
                  herewith.




**Reports
      on Form 8-K:**




None




**Item
      14. Principal Accounting Fees and Services.**






Audit
      Fees. The aggregate fees billed for professional services rendered by our
      principal accountants for the audit of our annual financial statements and
      review of our quarterly financial statements were $10,000 and $6,500 for fiscal
      years 2006 and 2005, respectively.





Audit
      Related Fees. None.





Tax
      Fees.
      None





All
      Other
      Fees. None.




During
      the fiscal year ended September 30, 2006, the Registrant did not have an audit
      committee.




22


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 January 16, 2007.


XIOM
              CORP.By:
            /s/ Andrew
              MazzoneAndrew
              Mazzone, President 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 indicate;


Signature
              
              Title
              
              Date/s/
                  Andrew Mazzone
              
              President
                  Principal
              
              January
                  16, 2007Andrew
                  Mazzone
              
              Accounting/Financial
                  Officer and Director/s/
                  Thomas Gardega
              
              Executive
                  Vice President
              
              January
                  16, 2007Thomas
                  Gardega
              
              Director




23