UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSSION


WASHINGTON,
D.C. 20549





Amendment
No. 2 to


FORM
10-K





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


For the
fiscal year ending December 31, 2009





 ̈  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





ENVIRONMENTAL
INFRASTRUCTURE HOLDINGS CORP.





(Exact name of registrant as specifiedin its charter)





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





Four Tower Bridge


200 Barr Harbor Drive, Ste.
400


West Conshohocken,
PA  19428





(Address
of Principal executive offices)





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




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




Securities registered under Section
12(g) of the Exchange Act:


Common Share, Par Value,
$.0001


(Title of Class)





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





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


 ̈Yes  x No





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


 ̈Yes  x No





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


xYes   ̈ No





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


 ̈





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





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





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


 ̈YesxNo





Aggregate
market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the price at which the common equity was last sold, or
the average bid and asked price of such common equity, as of the last business
day of the registrant's most recently completed second fiscal quarter:
$3,725,718 on June 30, 2009





Indicate
the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date. There were 46,946,195 shares of the
Company's common stock outstanding on September  21,
2010.





DOCUMENTS
INCORPORATED BY REFERENCE:  None.







ENVIRONMENTAL
INFRASTRUCTURE HOLDINGS CORP.


ANNUAL
REPORT ON FORM 10-K





For Year
Ended December 31, 2009





INDEX





Page No:PART
      I
                
                
                3ITEM
      1.
                BUSINESS
                
                3ITEM
      1A
                RISK
      FACTORS
                
                9ITEM
      2.
                PROPERTY
                
                21ITEM
      3.
                LEGAL
      PROCEEDINGS
                
                21ITEM
      4.
                SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDEDRS
                
                21PART
      II
                
                
                22ITEM
      5.
                MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                
                22ITEM
      6
                SELECTED
      FINANCIAL INFOMATION
                
                23ITEM
      7.
                MANAGEMENT’S
      DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
                
                23ITEM
      8.
                FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                
                F-1ITEM
      9.
                CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
                
                30ITEM
      9A(T).
                CONTROLS
      AND PROCEDURES
                
                30ITEM
      9B.
                OTHER
      INFORMATION
                
                31PART
      III
                
                
                31ITEM
      11
                EXECUTIVE
      COMPENSATION
                
                33ITEM
      12.
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                
                34ITEM
      13.
                CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE
                
                35ITEM
      14.
                PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                
                35PART
      IVITEM
      15.
                EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES
                
                35Signatures
                
                
                36




2




ENVIRONMENTAL
INFRASTRUCTURE HOLDINGS CORP.





INTRODUCTORY
COMMENT





Throughout
this Annual Report on Form 10-K, the terms "we," "us," "our," and "our company"
refer to ENVIRONMENTAL INFRASTRUCTURE HOLDINGS CORP. ("EIHC"), a Delaware
corporation and, unless the context indicates otherwise, includes our
wholly-owned subsidiaries, XIOM Corp. and Equisol, LLC.





FORWARD-LOOKING
STATEMENTS





The Private Securities Litigation
Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This
document contains forward-looking statements, which reflect the views of our
management with respect to future events and financial performance. These
forward-looking statements are subject to a number of uncertainties and other
factors that could cause actual results to differ materially from such
statements. Forward-looking statements are identified by words such as
"anticipates," "believes," "estimates," "expects," "intends," "plans,"
"projects," "targets" and similar expressions. Readers are cautioned not to
place undue reliance on these forward-looking statements, which are based on the
information available to management at this time and which speak only as of this
date. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
For a discussion of some of the factors that may cause actual results to differ
materially from those suggested by the forward-looking statements, please read
carefully the information under "Risk Factors" beginning on page 9.





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





PART
I





Item
1.  BUSINESS





ABOUT
OUR COMPANY





Environmental
Infrastructure Holdings Corp (“EIHC”, or the “Company”), was incorporated in
Delaware on November 5, 2009. The Company was formed to be the holding company
of XIOM Corp. and its subsidiaries.  See “Reorganization” below.  The
Company is the successor issuer of XIOM for purposes of the Securities Act of
1933, as amended, and the filings made by XIOM thereunder.  Pursuant to
Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended
(the “Act”), the Company is the successor issuer of XIOM with respect to XIOM
Common Shares, which were registered pursuant to Section 12(g) of the Act.
Pursuant to such rule, the Company Common Shares may be deemed to be registered
pursuant to Section 12(g) of the Act.





Reorganization





On December 7, 2009, XIOM reorganized
into a holding company structure (the “Reorganization”) whereby XIOM became a
direct wholly owned subsidiary of the Company pursuant to an Agreement and Plan
of Merger pursuant to Section 251(g) of the Delaware General Corporation Law
(the “Merger Agreement”) dated as of December 7, 2009, by and among the Company,
XIOM and EIHC Merger Co. (“Merger Sub”).





To effect the Reorganization, XIOM
formed the Company as a wholly owned subsidiary, which in turn formed Merger Sub
as a wholly owned subsidiary.  Pursuant to the Merger Agreement, Merger Sub
then merged with and into XIOM (the “Merger”), with XIOM being the surviving
entity.  In the Merger, each share of the common stock of Merger Sub issued
and outstanding immediately prior to the Merger and held by the Company was
converted into and exchanged for a share of XIOM common stock, par value $0.0001
(an “XIOM Common Share”), and Merger Sub’s corporate existence ceased. 
Each XIOM Common Share issued and outstanding immediately prior to the
Reorganization converted into and was exchanged for one common share, par value
$0.0001 per share, of the Company (a “Company Common Share”), having the same
rights, powers, preferences, qualifications, limitations and restrictions as the
stock being converted and exchanged.Pursuant tothe Merger, the Company Common Shares
existing prior to the Merger were cancelled.


3





The certificate of incorporation and
bylaws of the Companyimmediately following the Merger wereidentical to those of XIOM
(other than provisions regarding certain technical matters, as permitted by
Section 251(g) of the Delaware General Corporation Law), and the directors and
officers of the Companyimmediately following the Merger
wereidentical to the
directors and officers of XIOM immediately prior to consummation of the Merger.
XIOM’s stockholders will not recognize gain or loss for United States federal
income tax purposes upon the conversion of the XIOM Common
Shares.





Acquisition





On December 7, 2009,the Company, and its wholly owned subsidiary, XIOM
Corp. (“XIOM”), entered into thataMembership Interest Purchase Agreement
(the “Purchase Agreement”) dated as of December 7, 2009, by and among the
Company, XIOM, and each of the persons who held membership interests
(collectively, the “Sellers”) in Equisol, LLC (“Equisol”).  Pursuant to the
Purchase Agreement, the Company acquired all of the issued and outstanding
membership interests of Equisol, and in exchange, the Sellers received shares of
common stock of the Company representing forty percent (40%) of the issued and
outstanding shares of the common stock of the Company on a fully diluted basis
(the “Acquisition”).





As a condition to the closing of the
Acquisition, the Company and XIOM raiseda total of $705,000 in capital for
working capital purposes of the Company.As discussed in Note 10) COMMON STOCK
to the Consolidated Financial Statements for the years ended December 31, 2009
and 2008, $460,000 of gross proceeds have been received from the sale of
2,300,000 shares of common stock at $0.20 per share from an XIOM convertible
debt holder of $125,000 in notes sold to investors by XIOM between June and
August 2009. In addition,  as discussed in Note 11), $485,000 of gross
proceeds have been received from a private placement commenced by XIOM in
October 2009 with accredited investors at a subscription price of $0.25 per
unit, which included a warrant to purchase common stock at $0.75 per
share.  From December 7, 2009 to December 31, 2009, net proceeds` of
$265,325 consisting of $204,975 net of offering costs of $5,025, received by the
Company after the XIOM merger was completed  related to the sales `of
the 2,300,000 common shares at $0.20 per share, and $60,350, net of offering
costs of $39,650, received by the Company after the XIOM merger was completed
related to the XIOM private placement commenced in October 2009. In addition,
the Company received $268,975 from escrow also related to the XIOM private
placement commenced in October 2009 released to the Company subsequent to the
date of the XIOM merger. During the first quarter of 2010, the Company received
an additional $109,990, net of offering costs of $10, the remainder of proceeds
from XIOM’s October 2009 private placement offering with accredited investors.Upon the completion of the
Acquisition, Messrs. Parrish and Given were elected to the Board of Directors of
the Company, and Mr. Parrish was named President, CEO and Chairman of the
Company.





Equisol is an equipment solutions
provider, delivering environmentally friendly products, services and engineering
solutions to its customers.  Equisol has a broad range of services,
including those identified below, and a national presence that makes it
different from any other consulting, manufacturing, distribution, engineering or
service company in the environmental industry.





Consulting- On-site system reviews/audits and
phone consultation services to answer questions on existing equipment systems to
help customers determine the best available technology for their application
needs.





Design- Equipment solutions that meet
both customer's application needs and their budgets. These solutions can range
from simple feed and control systems to full turn-key equipment
packages.





Sales- Access to a wide range of
products that represent the best available technology in the water industry.
Equisol’s model is unique because Equisol can procure from many different
suppliers instead of being tied to a few key principle suppliers that may not
have the best solution for an application. Equisol can sell complete equipment
systems, basic Maintenance, Repair, and Operations (MRO) components, or spare
parts depending upon the need of a customer.


4





Fabrication- In order to eliminate the need
to build equipment systems on-site from many different pieces and parts, Equisol
can have systems fabricated as a complete turn-key skid and delivered to the
plant. This provides a way to test the equipment prior to delivery and decrease
the time needed for installation. Complete documentation, drawings, and system
P&IDs are provided for each system.





Installation- Equisol uses its expertise to
make sure the right equipment is installed correctly every time. With
installation, Equisol also offer start-up and commissioning services as well as
operator training.  Equisol also has certified tank installers on staff to
meet storage compliance and certification needs of
customers.





Services- Both preventative maintenance
and emergency response services to ensure customers’ automation and
instrumentation equipment is functioning properly.





Where
you can find us





Our
corporate offices are located at Four Tower Bridge,200 Barr Harbor Drive, Ste.
400,West Conshohocken,
PA  19428.The main telephone number is
(866) 629-7646. Any information contained on our website should not be
considered as part of this prospectus.  The information contained on our
website is used for disseminating sales and marketing purposes.





BUSINESS
OF THE COMPANY – PRINCIPAL PRODUCTS AND SERVICES





Environmental
Infrastructure Holdings Corp was founded to acquire and manage diverse entities
and subsidiaries specializing in environmentally related companies focused on
the improvement of our nation’s and world’s infrastructure.  Currently the
company has two wholly owned subsidiaries in Equisol, LLC and XIOM
Corp.




Equisol,
LLC was founded to address the recurring need of industrial and commercial
businesses to maximize efficiencies and meet environmental compliance
requirements.  These include the need to accurately treat their water and
process systems through filtration and/or chemical injection as well as comply
with the Clean Air and Clean Water Acts through air and monitoring. 
Equisol is a nationally recognized equipment solutions provider delivering
environmentally friendly products, services and engineering solutions to our
customers.  Specializing in the Water & Wastewater Industry, the
company provides:




·
            Turnkey
      Solutions




·
            Systems
      design, fabrication, and sales




·
            Equipment
      and Systems Service and Repair




·
            Optimization,
      Calibration & Maintenance




·
            24
      Hour Environmental Engineering and
Consulting


5


Equisol’s
primary customer is the industrial end user; the Company works in conjunction
with water treatment chemical companies, industry consultants, original
equipment manufacturers (OEMs) and equipment distributors to market its services
and expand its customer base.  Equisol’s major customers are refineries,
power plants, engineering firms, and manufacturing facilities in addition to
supporting commercial, municipal, as well as governmental facilities. 
Additionally, the top five major water treatment companies, including GE, Nalco,
and Siemens, now use Equisol to support their equipment needs.  Currently,
the company has approximately 35 teammates and growing, the majority of which
are in the Gulf Coast Region between Houston and New Orleans and all have
significant experience in the industry, specifically with electrical,
mechanical, instrumentation skills.  The company’s other geographical
strength is in the New York to DC corridor with satellite offices in Ohio,
Georgia, and Maryland.  Because of the company’s national focus, Equisol
has been able to compete and win at the corporate level in addition to our
successes at the local, plant level.  Our competition are the billion
dollar engineering firms and the thousands of small, regional, mom & pop
firms which we consider potential acquisition targets. Equisol has grown rapidly
through acquisitions and organic growth.  Equisol was selected by
Entrepreneur Magazine as one of the nation’s Top 100 Fastest Growing New
Entrepreneurial Companies for 2004. According to Inc.com Magazine, the company
was the 7th fastest growing privately held environmental services company in
America for 2008, when it was the 601st fastest
growing privately held company and we expect that ranking to continue to
improve, as it did from 2007, when Equisol was the 620th fastest
growing privately held company. The Entrepreneurs Forum of Greater Philadelphia
named Equisol, LLC to the Philly 100 list of fastest growing companies in the
region in 2009.




While
Equisol sells nationally and has worked in most states, Canada, and
internationally, part of the Company’s growth needs are to acquire on-site
assets in the West and strengthen our Midwest and Southeast
presence.




XIOM
develops 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.




XIOM 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.





XIOM’s
plastic spray technology is unique and has patents issued and 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 XIOM, 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.


6





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 from the established liquid coating processes we know as traditional
painting.





XIOM’s
products contain no VOCs . 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 XIOM’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.  XIOM 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
systems.





There can
be no assurance that XIOM’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.





XIOM
believes, but cannot prove, that its coatings are superior to paint.  XIOM
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.  XIOM 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 XIOM would run out of funds long before such
tests were completed.  Investors would be well advised not to invest in
XIOM if they need the assurance of long term testing on coatings from our
process being able to outlast paint coatings.  In this case XIOM 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 seventy 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.


7





XIOM
coatings can be applied at thicknesses from 3 mils up to 1 inch as compared to
traditional powder coatings which usually vary from 1 to 4 mils thick.  The
company believes that thicker coatings generally give greater protection against
corrosion than thin coatings.  XIOM 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.





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.





XIOM
currently has approximately 20 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.  XIOM’s materials come in over 100
different colors.  XIOM 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 up to a 9-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 and can be applied thick or thin.





Employees:





As of
December 31, 2009, we employed approximately 45 persons.  None of our
employees are covered by collective bargaining agreements.  We believe that
our relations with our employees are good.


8





ITEM
1A. RISK FACTORS





RISK
FACTORS




An
investment in our common stock involves a high degree of risk.  You should
carefully consider the risks and


uncertainties
described below and all other information contained in this prospectus before
deciding to invest in shares of our common stock.  While all risks and
uncertainties that we believe to be material to our business and therefore the
value of our common stock are described below, it is possible that other risks
and uncertainties that affect our business will arise or become material in the
future.





If
we are unable to effectively address these risks and uncertainties, our
business, financial condition or results of operations could be materially and
adversely affected.  In this event, the value of our common stock could
decline and you could lose part or all of your investment.




Risks
Related To Our Business




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




Since
our inception, we have incurred significant losses and negative cash flows from
operations.  As of December 31, 2009,
we had an accumulated deficit of $8,603,153, and may incur additional losses in
the next several years.We
expect to spend significant resources over the next several years to enhance our
technologies and to fund researchand
development of our pipeline of potential products.  In order toachieve
profitability, we must develop products and technologies that can be
commercialized by us or through future collaborations.  Our ability to
generate revenues and become profitable will depend on our ability, alone or
with potential collaborators, to timely, efficiently, and successfully complete
the development of our products, which may include manufacturing and marketing
our products.  There can be no assurance that any such events will occur or
that we will everbecome
profitable.  Even if we do achieve profitability, we cannot predict the
level of such profitability.  If we sustain losses over an extended period
of time, we may be unable to continue our business.




Our
independent registered public auditors issued their report for the fiscal year
ended December 31, 2009, witha
“going concern” explanatory paragraph.




Our
independent registered public auditors issued their report on their audit of our
financial statements as of and for thefiscal
year ended December 31, 2009. The independent registered auditor’s report
contains an explanatory paragraph indicating thatthe
net losses we have incurred and our working capital deficit raise substantial
doubt about our ability to continue as a goingconcern.
Our going concern uncertainty may affect our ability to raise additional
capital, and may also affect our relationshipswith
suppliers and customers. Investors should carefully read the independent
registered public auditor’s report and examineour
financial statements.




We
continue to need to obtain significant additional capital to fund our
operations, and we may be unable to obtain such financing at all or on
acceptable terms.If
we are unable to obtain the funds necessary to do so, we may be required
to
delay, scale back or eliminate our productdevelopment
or may be unable to continue our business.




The
development of our products will require a commitment of substantial funds, to
conduct the costly and time-consuming
research, necessary to fully commercialize our products.Our
future capital requirements will depend on many factors,
including:





•the cost of prosecuting, defending and
enforcing patent claims and other intellectual property
rights;


•the cost of manufacturing our
products;


•competing technological and market
developments; and


•our ability to establish and maintain
collaborative and other arrangements with third parties to assist in bringing
our products to market and the cost of such
arrangements.


9





There can be no assurance that we will
not need additional capital sooner than currently anticipated.We will need to raise substantial
additional capital to fund our future operations.  We cannot be certain
that additionalfinancing
will be available on acceptable terms, or at all.  In recent years, it has
been difficult for companies to raise capital dueto a variety of factors, which may or
may not continue.  To the extent we raise additional capital through the
sale of equitysecurities,
the ownership position of investors in this offering and our existing
stockholders could be substantially diluted.  If additional funds are
raised through the issuance of preferred stock or debt securities, these
securities are likely to have rights, preferences and privileges senior to our
common stock.  Fluctuating interest rates could also increase the costs of
any debtfinancing we may
obtain.




To date, we have incurred significant
expenses in product development and administration in order to ready our
products for market. There is no assurance that actual cash requirements will
not exceed our estimates, in which case we will require additional financing to
bring our products into commercial operation, finance working capital and pay
for operating expenses and capital requirements until we achieve a positive cash
flow. Additionally, more capital may be required in the eventthat:





•we incur unexpected costs in completing
the development of our technology or encounter any unexpected technical or other
difficulties;


•we incur delays and additional expenses
as a result of technology failure;


•we are unable to create a substantial
market for our product and services; or


•we incur any significant unanticipated
expenses.





Failure to successfully address ongoing
liquidity requirements will have a material adverse effect on our
business.  If we are unable to obtain additional capital on acceptable
terms when needed, we may be required to take actions that harm ourbusiness and our ability to achieve cash
flow in the future, including possibly the surrender of our rights to some
technologiesor product
opportunities, curtailing or ceasing operations.




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




Because
we have generated only limited
revenues since commencing operations, we are dependent on raising additional
financing through private and public financing sources and strategic alliances
with larger companies to fund our short and long-term operations. As a result,
we have been and likely will be required to issue securities to obtain such
funds, which issuances have in the past and will in the future dilute the
percentage ownership of our stockholders.In an effort to preserve cash and to
better align the long term interests of our consultants and those with whom we
conduct business with our long term interests, we have been issuing securities
as payment in lieu of cash, which also has a dilutive effect on outstanding
securities. This dilution could also have an adverse impact on our
earnings per share and reduce the price of our common stock. In addition, the
new securities may have rights, preferences or privileges senior to those of our
common stock. For example, In October 2008 XIOM issued 1,175,000, restricted
common shares with a fair market value of $822,500 to several independent
contractors in connection with professional service agreements for financial and
legal services to be provided to the Company through various dates through
September 2009. In November 2008, XIOM issued 308,333 common shares with a fair
market value of $135,667 to employees under the Company's Employee Stock
Ownership Plan.In November 2008, XIOM issued 320,191 restricted common shares
with a fair market value of $128,056 in connection with the conversion of
Convertible Notes Payable. In February 2009, XIOM issued 12,500 restricted
common shares with a fair market value of $18,750 to an employee in connection
with a severance agreement. In February 2009, XIOM issued 121,048 restricted
common shares at a price of $0.15 per share to one holder of the Convertible
Notes Payable in satisfaction of accrued interest due in the amount of $18,157.
In March 2009, XIOM issued 1,225,000 restricted common shares with a fair market
value of $163,000 to several independent contractors in connection with
professional service agreements for financial and legal services to be provided
to the Company through various dates through February 2011. In March 2009, XIOM
issued 541,667 common shares with a fair market value of $73,733 to employees
under the Company's Employee Stock Ownership Plan in lieu of salaries. In March
2009, XIOM issued 65,400 restricted common shares at a price of $0.25 per share
to a vendor in satisfaction of an invoice due in the amount of $16,350. In April
and May 2009, XIOM issued 90,000 restricted common shares with a fair market
value of $16,500 to third parties in satisfaction of claims and this amount was
recorded as a non-cash expense on the date of issuance.


10





In June
2009,XIOM issued 620,000 restricted common shares with a fair market value of
$217,000 to several independent contractors in connection with professional
service agreements for financial and legal services to be provided to the
Company through May 2010. In June 2009, XIOM issued 370,000 common shares with a
fair market value of $129,500 to employees under the Company's Employee Stock
Ownership Plan in lieu of salaries. In June 2009, XIOM issued 10,000 restricted
common shares with a fair market value of $3,500 to a former employee for
consulting services. In June 2009, XIOM issued 250,000 restricted common shares
with an assigned value of $164,481 (including $116,093 relating to the
beneficial conversion feature of the notes) in connection with the issuance
of convertible notes with a face of $250,000 due in December 2009.In June 2009,
two independent contractors exercised options previously granted in April 2009
for the purchase of 1,200,000 and 250,000 shares of common stock.  As they
elected to utilize the cashless exercise feature of those options, net amounts
of 1,042,105 and 217,105 shares of restricted common stock were issued. In July
2009, XIOM issued 195,000 common shares with a fair market value of $84,550 to
three independent contractors for financial and legal services.  In July
2009, XIOM issued 100,000 restricted common shares with an assigned value of
$59,973 (including $41,678 relating to the beneficial conversion feature of the
notes) in connection with the issuance of convertible notes with an aggregate
face value of $100,000 due in January 2010. In July 2009, XIOM issued 155,000
common shares with a fair market value of $75,950 to two officers of XIOM under
XIOM’s Employee Stock Ownership Plan in lieu of salaries. In July 2009, an
officer of XIOM exercised options for the purchase of 1,200,000 shares of common
stock.  As he elected to utilize the cashless exercise feature of those
options, the net amount of 1,077,551 shares of restricted common stock were
issued.In August 2009, XIOM issued 75,000 common shares with a fair market value
of $30,000 to an independent contractor for financial services. In August 2009,
an officer of XIOM exercised options for the purchase of 300,000 shares of
common stock.  As he elected to utilize the cashless exercise feature of
those options, the net amount of 261,539 shares of restricted common stock were
issued.In August 2009, XIOM issued 1,200 common shares with a fair market value
of $475 to an independent contractor for consulting services. In August 2009,
XIOM issued 100,000 restricted common shares with an assigned value of $32,000
(including $4,383 relating to the beneficial conversion feature of the note) in
connection with the issuance of a convertible note with a face of $100,000 due
in February 2010. On October 27, 2009, November 3, 2009, and November 9, 2009,
XIOM issued a total of 2,250,050 shares of its common stock to a group
consisting of the former president/significant shareholder and members of his
family and various consultants coincident to the reverse merger on 7 December
2009 with an estimated value of $748,516 based upon XIOM’s stock trading price
during that period..





In
December, 2009, the Company issued 18,563,693 shares to the owners of
Equisol, LLC and committed to issue8,084,942additional shares so that the owners of
Equisol, LLC would own 40% of the fully diluted shares of
EIHC.




We
may not successfully establish and maintain collaborative and licensing
arrangements, which could adverselyaffect
our ability to develop and commercialize our
products.




Our technological strategy includes
developing our powder technology as well as establishing collaborations and
licensing agreements with other companies. We may not be able to maintain or
expand these licenses and collaborations or establishadditional licensing and collaboration
arrangements necessary to develop and commercialize our products. Even if we are
able to maintain or establish licensing or collaboration arrangements, these
arrangements may not be on favorable terms and may contain provisions that will
restrict our ability to develop, test and market our products.  Any failure
to maintain or establishlicensing or collaboration arrangements
on favorable terms could adversely affect our business prospects, financial
conditionor ability to
develop and commercialize our products.




We expect to rely at least in part on
third-party collaborators to perform a number of activities relating to the
development and commercialization of our products, including the manufacturing
of product materials and the design for ourproducts.  Our collaborative
partners may also have or acquire rights to control aspects of our product
development.  As aresult, we may not be able to conduct
these programs in the manner or on the time schedule we currently contemplate.
In addition, if any of these collaborative partners withdraw support for our
programs or products or otherwise impair theirdevelopment, our business could be
negatively affected.  To the extent we undertake any of these activities
internally, ourexpenses
may increase.


11




In addition, our success depends on the
performance of our collaborators of their responsibilities under thesearrangements.  Some
potential collaborators may not perform their obligations in a timely fashion or
in a manner satisfactory tous. Because such agreements may be
exclusive, we may not be able to enter into a collaboration agreement with any
other company covering the same field during the applicable collaborative
period.  In addition, our collaborators’ competitors maynot wish to do business with us at all
due to our relationship with our collaborators.  If we are unable to enter
into additional product discovery and development collaborations, our ability to
sustain or expand our business will be significantlydiminished.




If
we are unable to create and maintain sales, marketing and distribution
capabilities or enter into agreements with third parties to perform those
functions, we will not be able to commercialize our
products.




We currently have limited sales,
marketing or distribution capabilities.  Therefore, to commercialize our
products, if andwhen such
products are ready for marketing, we expect to collaborate with third parties to
perform these functions.  We have limited experience in developing,
training or managing a sales force and will incur substantial additional
expenses if we decide to market any of our future products directly. 
Developing a marketing and sales force is also time consuming and could delay
launch of our future products.  In addition, we will compete with many
companies that currently have extensive and well-funded marketing and sales
operations.  Our marketing and sales efforts may be unable to competesuccessfully against these
companies.




The
industry in which we operate is highly competitive, and competitive pressures
from existing and new companies could have a material adverse effect on our
financial condition and results of operations.




The industry in which we operate is
highly competitive and influenced by the following:





•advances in
technology;


•new product
introductions;


•evolving industry
standards;


•product
improvements;


•rapidly changing customer
needs;


•intellectual property invention and
protection;


•marketing and distribution
capabilities;


•competition from highly capitalized
companies;


•ability of customers to invest in
information technology; and


•price competition.




We can give no assurance that we will be
able to compete effectively in our markets.  Many of our competitors havesubstantially greater
capital resources, research and development resources and experience,
manufacturing capabilities, regulatory expertise, sales and marketing resources,
established relationships with business and consumer products companiesand production facilities
than us.




We
may encounter difficulties managing our growth, which could adversely affect our
business.




Our strategy includes entering into and
working on simultaneous technology discovery and developmentprograms across multiple markets. 
We expect to continue to grow to meet our strategic objectives.  If our
growth continues, it will continue to place a strain on us, our management and
our resources.  Our ability to effectively manage our operations, growth
and various projects requires us to continue to improve our operational,
financial and management controls, reportingsystems and procedures, and to attract
and retain sufficient numbers of talented employees.  We may not be able tosuccessfully implement
these tasks on a larger scale and, accordingly, we may not achieve our research,
development and commercialization goals.  If we fail to improve our
operational, financial and management information systems, or fail to
effectively monitor or manage our new and future employees or our growth, our
business would suffer significantly.


12




We
may not be able to manufacture our planned products in sufficient quantities at
an acceptable cost, or at all,which
could harm our future prospects.




We
lease a single manufacturing facility.If
anyof
our proposed products become available for widespread sale, we may not be able
to arrange for the manufacture of such product in sufficient quantities at an
acceptable cost, or at all, which could materially adversely affect our future
prospects.




Compliance
with the Sarbanes-Oxley Act of 2002 will result in increased
expenditures.




We
are exposed to significant costs and risks associated with complying with
increasingly stringent and complexregulation
of corporate governance and disclosure standards. Changing laws, regulations and
standards relating to corporategovernance
and public disclosure, including the Sarbanes-Oxley Act of 2002 and new SEC
regulations require a growing expenditure of management time and external
resources. In particular, Section 404 of the Sarbanes-Oxley Act of 2002 requiresmanagement’s
annual review and evaluation of our internal controls, and attestations of the
effectiveness of our internalcontrols
by our independent registered auditors.  Although we are not currently
required to comply with all of the requirementsof
Section 404, we have begun the process of documenting and testing our internal
controls. This process could result in ourneeding
to implement measures to improve our internal controls. Any failure by us to
maintain effective internal controls couldhave
a material adverse effect on our business, operating results and stock price.
This process may also require us to hire additional personnel and outside
advisory services and will result in significant accounting and legal
expenses.




Risks
Related To Our Industry




Our
products may become obsolete and unmarketable if we are unable to respond
adequately to rapidly changingtechnology
and customer demands.




Our
industry is characterized by rapid changes in technology and customer demands.
As a result, our products may quickly become obsolete and unmarketable. Our
future success will depend on our ability to adapt to technological advances,
anticipate customer demands, develop new products and enhance our current
products on a timely and cost-effective basis.Further,
our products must remain competitive with those of other companies with
substantially greater resources. We may experience technical or other
difficulties that could delay or prevent the development, introduction or
marketing of newproducts
or enhanced versions of existing products. Also, we may not be able to adapt new
or enhanced products to emerging industry standards, and our new products may
not be favorably received.




If
we are unable to attract and retain key personnel and advisors, it may adversely
affect our ability to obtainfinancing,
pursue collaborations or develop our products.




We
are highly dependent on Michael Parrish, our chairman and chief executive
officer,James
Weber, the president of our subsidiary, XIOM Corp, and Kurt Given, president of
our subsidiary, Equisol, LLC.  Our future success depends on our ability to
attract, retain and motivate highly qualified management and scientific,
development and commercial personnel and advisors.  To pursue our business
strategy, we will need to hire or otherwise engage qualified personnel and
managers, including personnel with expertise in discovery, development,
manufacturing, marketing and sales.  Competition for qualified personnel is
intense among companies, academic institutions and other organizations.  If
we are unable to attract and retain key personnel and advisors, it may
negatively affect our ability to successfully develop, test and commercialize
our products and could have a material adverse effect on our proposals,
financial condition and results of operations.




We
may be sued for product liability, which could adversely affect our
business.




Because our business strategy involves
the development and sale by either us or our collaborators of commercialproducts incorporating our
powder coating technology, we may be sued for product liability. We may be held
liable if any product we develop and commercialize, or any product our
collaborators commercialize that incorporates any of our technology, causes
injury or is found otherwise unsuitable during product testing, manufacturing,
marketing, sale or consumer use.


13




If we and our collaborators commence
sale of commercial products we will need to obtain additional product liability
insurance, and this insurance may be prohibitively expensive, or may not fully
cover our potential liabilities.  Inability to obtain sufficientinsurance coverage at an
acceptable cost or otherwise to protect against potential product liability
claims could prevent orinhibit the commercialization of
products developed by us or our product discovery and development
collaborators.  We maybe obligated to indemnify our product
discovery and development collaborators for product liability or other losses
they incur.  Any
indemnification we receive from such collaborators for product liability that
does not arise fromour
technology may not be sufficient to satisfy our liability to injured parties. If
we are sued for any injury caused by our products or products incorporating our
technology or any other products we develop, our liability could exceed our
total assets.




Risks Related To
Intellectual Property and Technology




If our products are not effectively
protected by valid, issued patents or if we are not otherwise able to protect
our proprietary information, it could harm our business.




The success of our operations will
depend in part on our ability and that of our licensors to:





•obtain any necessary patent protections
for new technologies both in the United States and in other countries with substantial
markets;


•defend patents once
obtained;


•maintain trade secrets and operate
without infringing upon the patents and proprietary rights of others;
and


•obtain appropriate licenses upon
reasonable terms to patents or proprietary rights held by others that are necessary or useful to us in
commercializing our technology, both in the United States and in other countrieswith substantial
markets.





In the event we are not able protect our
intellectual property and proprietary information, our business will bematerially
harmed.




We may not have adequate protection for
our unpatented proprietary information, which could adversely affect our
competitive position.




In addition to any patents that we may
apply for in the future, we will substantially rely on trade secrets, know-how,continuing technological
innovations and licensing opportunities to develop and maintain our competitive
position.  However, others may independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
our trade secrets or disclose our technology.  To protect our trade
secrets, we may enter into confidentiality agreements withemployees, consultants
and potential collaborators.  However, these agreements may not provide
meaningful protection of our trade secrets or adequate remedies in the event of
unauthorized use or disclosure of such information.  Likewise, our trade
secrets or know-how may become known through other means or be independently
discovered by our competitors.  Any of these events could prevent us from
developing or commercializing our products.




Our ability to compete in the powder
coating market may decline if we do not adequately protect ourproprietary
technologies.




Because of the substantial length of
time and expense associated with the development of new products, we, along with
the rest of the industry, place considerable importance on obtaining and
maintaining patent protection for new technologies, products and
processes.  Our success will depend in part on our ability to obtain and
maintainintellectual
property that protects our technologies and technology products.  Patent
positions may be highly uncertainand may involve complex legal and
factual questions for which we seek patent protection.  No consistent
standard regarding the allowance or enforceability of claims in many of our
pending patent applications has emerged to date.  As a result, we cannot
predict the breadth of claims that will ultimately be allowed in any future
patent applications, if any, including those we have in-licensed or the extent
to which we may enforce these claims against our competitors. The degree of
future protection for our proprietary rights is therefore highly uncertain and
we cannot assure you that:


14





•we will be the first to file patent
applications or to invent the subject matter claimed in patent applications
thatwe file, if any, which
relate to the technologies upon which we rely;


•others will not independently develop
similar or alternative technologies or duplicate any of our technologies;


•any of our potential patent applications
will result in issued patents;


•any of our potential patent applications
will not result in interferences or disputes with third parties
regardingpriority of
invention;


•any patents that may be issued to us,
our collaborators or our licensors will provide a basis for commerciallyviable
products or will provide us with any competitive advantages or will not be
challenged by third parties;


•we will develop any proprietary
technologies that are patentable;


•the patents of others will not have an
adverse effect on our ability to do business; or


•new proprietary technologies from third
parties, including existing licensors, will be available for licensing
tous on reasonable
commercial terms, if at all.





In addition, patent law outside the
United States is uncertain and in many countries intellectual property laws areundergoing review and
revision. The laws of some countries do not protect intellectual property rights
to the same extent as domestic laws. It may be necessary or useful for us to
participate in opposition proceedings to determine the validity of our
competitors’ patents or to defend the validity of any of our or our licensor’s
future patents, which could result in substantial costs and would divert our
efforts and attention from other aspects of our business.




Technologies licensed to us by others,
or in-licensed technologies, are important to our business. In particular, we
depend on certain technologies relating to technology licensed to us, as well as
our relationships with variouscommunications, software and integrator
companies.  In addition, we may in the future acquire rights to additional
technologies by licensing such rights from existing licensors or from third
parties.  Such in-licenses may be costly.  Also, we generally do notcontrol the patent
prosecution, maintenance or enforcement of in-licensed technologies. 
Accordingly, we are unable toexercise the same degree of control over
this intellectual property as we do over our internally developed technologies.
If we cannot maintain the confidentiality of our technologies and other
confidential information in connection with our collaborations, our ability to
protect our proprietary information or obtain patent protection in the future
may be impaired, which could have a significant adverse effect on our business,
financial condition and results ofoperations.




Disputes concerning the infringement or
misappropriation of our proprietary rights or the proprietary rights of others
could be time consuming and extremely costly and could delay our research and
development efforts.




Our commercial success, if any, will be
significantly harmed if we infringe the patent rights of third parties or if we
breach any license or other agreements that we have entered into with regard to
our technology or business.




We are aware of other companies and
academic institutions that have been performing research in the areas ofpowder coatingtechnology.To the extent any of these companies or
academic institutions currently have, or obtain in the future, broad patent
claims, such patents could block our ability to use various aspects of our
discovery anddevelopment
process and might prevent us from developing or commercializing newly discoveredtechnologiesorotherwise conducting our business. 
In addition, it is possible that some of the new technologies that are
discovered using our technology may not be patentable or may be covered by
intellectual property of third parties.


15




We are not currently a party to any
litigation, interference, opposition, protest, reexamination or any other
potentially adverse governmental, ex parte or inter-party proceeding with regard
to our patent or trademark positions.  However, thetechnology industries are characterized
by extensive litigation regarding patents and other intellectual property
rights.  Manytechnology companies have employed
intellectual property litigation as a way to gain a competitive advantage. 
If we become involved in litigation, interference proceedings, oppositions,
reexamination, protest or other potentially adverse intellectualproperty proceedings as a result of
alleged infringement by us of the rights of others or as a result of priority of
inventiondisputes with
third parties, we might have to spend significant amounts of money, time and
effort defending our position and we may not be successful.  In addition,
any claims relating to the infringement of third-party proprietary rights or
proprietary determinations, even if not meritorious, could result in costly
litigation, lengthy governmental proceedings, divertmanagement’s attention and resources, or
require us to enter into royalty or license agreements that are not advantageous
tous.




Should any person have filed patent
applications or obtained patents that claim inventions also claimed by us, we
may have to participate in an interference proceeding declared by the relevant
patent regulatory agency to determine priority of invention and, thus, the right
to a patent for these inventions in the United States.  Such a proceeding
could result in substantial cost to us even if the outcome is favorable. 
Even if successful on priority grounds, an interference action mayresult in loss of claims based on
patentability grounds raised in the interference action.  Litigation,
interference proceedings or other proceedings could divert management’s time and
efforts.  Even unsuccessful claims could result in significant legal fees
and other expenses, diversion of management’s time and disruption in our
business.  Uncertainties resulting from initiation and continuation of any
patent proceeding or related litigation could harm our ability to compete and
could have a significant adverse effect on our business, financial condition and
results of operations.




An adverse ruling arising out of any
intellectual property dispute, including an adverse decision as to the priority
of our inventions, could undercut or invalidate our intellectual property
position.  An adverse ruling could also subject us tosignificant liability for damages,
including possible treble damages, prevent us from using technologies or
developingproducts, or
require us to negotiate licenses to disputed rights from third parties. 
Although patent and intellectual property disputes in the technology area are
often settled through licensing or similar arrangements, costs associated with
these arrangements may be substantial and could include license fees and ongoing
royalties.  Furthermore, necessary licenses maynot be available to us on satisfactory
terms, if at all.  Failure to obtain a license in such a case could have a
significant adverseeffect
on our business, financial condition and results of
operations.




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




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




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





•our ability to develop
technology;


16


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


•our receipt of milestone payments in any
particular period;


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


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


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


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





If we acquire products, technologies or
other businesses, we will incur a variety of costs, may have integration
difficulties and may experience numerous other risks that could adversely affect
our business.




To remain competitive, weplanto acquire additional businesses,
products and technologies and we currentlyare actively seeking material
acquisitions that complement our business.  We have limited
experience in identifying acquisitiontargets, successfully acquiring them and
integrating them into our current infrastructure.  We may not be able to
successfully integrate any businesses, products, technologies or personnel that
we might acquire in the future without a significantexpenditure of operating, financial and
management resources, if at all.  In addition, future acquisitions could
require significant capital infusions and could involve many risks, including,
but not limited to, the following:


•we may have to issue convertible debt or
equity securities to complete an acquisition, which would dilute our
stockholders and could adversely affect the market price of the common
stock;


•an acquisition may negatively impact our
results of operations because it may require us to incur large one-time charges
to earnings, amortize or write down amounts related to goodwill and other
intangible assets, orincur
or assume substantial debt or liabilities, or it may cause adverse tax
consequences, substantialdepreciation or deferred compensation
charges;


•we may encounter difficulties in
assimilating and integrating the business, technologies, products, personnelor
operations of companies that we acquire;


•certain acquisitions may disrupt our
relationship with existing collaborators who are competitive to theacquired
business;


•acquisitions may require significant
capital infusions and the acquired businesses, products or technologiesmay not
generate sufficient revenue to offset acquisition costs;


•anacquisition may disrupt our ongoing
business, divert resources, increase our expenses and distract
ourmanagement;


•acquisitions may involve the entry into
a geographic or business market in which we have little or no priorexperience;
and


•key personnel of an acquired company may
decide not to work for us.





Any of the foregoing risks could have a
significant adverse effect on our business, financial condition and results
ofoperations.




To the extent we enter markets outside
of the United States, our business will be subject to political, economic, legal
and social risks in those markets, which could adversely affect our
business.




There are significant regulatory and
legal barriers in markets outside the United States that we must overcome to
theextent we enter or attempt to enter markets in countries other than the
United States.  We will be subject to the burden ofcomplying with a wide variety of
national and local laws, including multiple and possibly overlapping and
conflicting laws.  Wealso may experience difficulties
adapting to new cultures, business customs and legal systems.  Any sales
and operations outside the United States would be subject to political, economic
and social uncertainties including, among others:


17





•changes and limits in import and export
controls;


•increases in custom duties and
tariffs;


•changes in currency exchange
rates;


•economic and political
instability;


•changes in government regulations and
laws;


•absence in some jurisdictions of
effective laws to protect our intellectual property rights;
and


•currency transfer and other restrictions
and regulations that may limit our ability to sell certain products
orrepatriate profits to the
United States.


Any changes related to these and other
factors could adversely affect our business to the extent we enter marketsoutside the United
States.




Risks Related to our Common Stock;
Liquidity Risks




The price of our common stock is
expected to be volatile and an investment in common stock could decline in value.




The market price of our common stock,
and the market pricesin
generalfor securities of
companiesin our
industry, are expected to
be highly volatile.  The following factors, in addition to other risk
factors described in thisfiling, and thepotentially low volume of trades in
common stock, may have a significant impact on the market price of common stock,
some ofwhich are beyond
our control:





•announcements of technological
innovations and discoveries by us or our competitors;


•developments concerning any research and
development, manufacturing, and marketing collaborations;





•new products or services that we or our
competitors offer;


•actual or anticipated variations in
operating results;


•the initiation, conduct and/or outcome
of intellectual property and/or litigation matters;


•changes in financial estimates by
securities analysts;


•conditions or trends in technology or
software industries;


•changes in the economic performance
and/or market valuations of other technology companies;


•our announcement of significant
acquisitions, strategic partnerships, joint ventures or capital
commitments;


•additions or departures of key
personnel;


•global unrest, terrorist activities, and
economic and other external factors; and


•sales or other transactions involving
our common stock.





The stock market in general has recently
experienced relatively large price and volume fluctuations.  In particular,market prices of securities
of technology companies have experienced fluctuations that often have been
unrelated or disproportionate to the operating results of these companies. 
Continued market fluctuations could result in extreme volatility in the price of
common stock, which could cause a decline in the value of common stock. 
Prospective investors should also be aware that price volatility may be worse if
the trading volume of common stock is low.




We do not expect to pay cash dividends
in the foreseeable future.




We currently intend to retain any future
earnings to finance the growth and development of our business; therefore, we do
not expect to pay any cash dividends in the foreseeable future. Any future
dividends will depend on our earnings, if any, and our financial
requirements.


18




It is not anticipated that there will be
an active public market for shares of our common stock in the near term, and you
may have to hold your shares of common stock for an indefinite period of time.
You may be unable to resell a large number of your shares of common stock within
a short time frame or at or above their purchase price.




There is not an active public or other
trading market for our common stock, and there can be no assurance that any
market will develop or be sustained after the completion of this offering. 
Because our common stock is expected to be thinly traded, an investor cannot
expect to be able to liquidate its investment in case of an emergency or if it
otherwise desires to do so.  Large transactions in common stock may be
difficult to conduct in a short period of time.  Further, the sale of
shares ofcommon stock may
have adverse federal income tax consequences.




It is more difficult for our
shareholders to sell their shares because we are not, and may never be, eligible
for theNasdaq Stock Market
or any National Stock Exchange.




We are not presently, nor is it likely
that for the foreseeable future we will be, eligible for inclusion in the Nasdaq
StockMarket or for listing
on any United States national stock exchange.  To be eligible to be
included in the Nasdaq Stock Market, a company is required to have not less than
$4,000,000 of stockholders’ equity, a public float with a market value of not
less than$5,000,000, and a
minimum bid price of $4.00 per share. At the present time, we are unable to
state when, if ever, we will meet theNasdaq Stock Market application
standards.  Unless we are able to increase our net worth and market
valuation substantially,either through the accumulation of
surplus out of earned income or successful capital raising financing activities,
we willnotbe able to meet the eligibility
requirements of the Nasdaq Stock Market.  As a result, it will more
difficult for holders of our common stock to resell their shares to third
parties or otherwise, which could have a material adverse effect on the
liquidity andmarket price
of our common stock.




Substantial future issuances of our
common stock could depress our stock price.




The market price for our common stock
could decline, perhaps significantly, as a result of issuances of a large numberof shares of our common
stock in the public market or even the perception that such issuances could
occur.  Sales of asubstantial number of shares of common stock, or the
perception that holders of a large number of shares intend to sell theirshares, could depress the
market price of our common stock.




Directors and officers of the Company
will have a high concentration of our common stock
ownership.




Based on the aggregate number of shares
of our common stock that are outstanding as ofApril 15, 2010, our officers and directors
beneficially own approximately33.3%of our outstanding common stock. 
Such a high level of ownership by such persons may have a significant effect in
delaying, deferring or preventing any potential change in control of the
Company. Additionally, as a result of their high level of ownership, our
officers and directors might be able to strongly influence theactions of our Board of Directors, and
the outcome of actions brought to our stockholders for approval. Such a high
level of ownership may adversely affect the voting and other rights of our
stockholders.




Changes in, or interpretations of,
accounting rules and regulations, such as expensing of stock options and otherstock-based compensation,
could result in unfavorable accounting charges or require us to change our
compensationpolicies.




Accounting methods and policies,
including policies governing revenues recognition, expenses, and accounting for
stock options and other forms of stock-based compensation are subject to further
review, interpretation and guidance from relevant accounting authorities,
including the SEC. Changes to, or interpretations of, accounting methods or
policies in the future may require us to reclassify, restate or otherwise change
or revise our financial statements, including those contained inthis prospectus. Prior to January 1,
2006, we were not required to record stock-based compensation charges if the
employee’s stock option exercise price equals or exceeds the fair market value
of our common stock at the date of grant.


19




Generally
accepted accounting principles require all share-based payments to employees,
including grants of employee stock options, to be recognized in the income
statement based on their fair values. This has a significant impact on the
presentation of our results of operations if we utilize stock-based compensation
to reward and incentivize employees and others who contribute to our growth and
success, although it will have no impact on our overall financial
position.




We may
rely heavily on stock options to motivate existing employees and to attract new
employees. When we are required to expense stock options, we may then choose to
reduce our reliance on stock options as a motivation tool. If wedecide to reduce
our potential use of stock options in the future, it may be more difficult for
us to attract and retain qualified employees.  However, if we decide
to not reduce our reliance on stock options in the future, it will decrease our
reported earnings.




We
do not expect to make dividend payments in the foreseeable future.




The
Company has never declared or paid any cash dividends on its common stock. For
the foreseeable future, the Company intends to retain any earnings to finance
the development and expansion of its business, and it does not anticipate paying
any cash dividends on our common stock. Any future determination to pay
dividends will be at the discretion of the Board of Directors and will be
dependent upon then existing conditions, including the Company's financial
condition and results of operations, capital requirements, contractual
restrictions, business prospects, and other factors that the board of directors
consider relevant.




The
fact that we are subject to Penny Stock Regulation may make it less appealing
for a broker-dealer to engage in transactions involving our
securities.




The
Commission has adopted regulations which generally define a “penny stock” to be
any equity security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain exceptions. As a
result, our common stock is subject to rules that impose additional sales
practice requirements on broker dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000
together with their spouse). For transactions covered by such rules, the broker
dealer must make a special suitability determination for the purchase of such
securities and have received the purchaser’s written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the transaction,
of a risk disclosure document mandated by the Commission relating to the penny
stock market. The broker dealer must also disclose the commission payable to
both the broker dealer and the registered representative, current quotations for
the securities and, if the broker dealer is the sole market maker, the broker
dealer must disclose this fact and the broker dealer’s presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Broker-dealers must wait two business days after
providing buyers with disclosure materials regarding a security before effecting
a transaction in such security. Consequently, the “penny stock” rules restrict
the ability of broker dealers to sell our securities and affect the ability of
investors to sell our securities in the secondary market and the price at which
such purchasers can sell any such securities, thereby affecting the liquidity of
the market for our common stock.




Stockholders
should be aware that, according to the Commission, the market for penny stocks
has suffered in recent years from patterns of fraud and abuse. Such patterns
include:





·
            control
      of the market for the security by one or more broker-dealers that are
      often related to the promoter or
issuer;


·
            manipulation
      of prices through prearranged matching of purchases and sales and false
      and misleading press releases;


·
            “boiler
      room” practices involving high pressure sales tactics and unrealistic
      price projections by inexperienced sales
  persons;


20


·
            excessive
      and undisclosed bid-ask differentials and markups by selling
      broker-dealers; and


·
            the
      wholesale dumping of the same securities by promoters and broker-dealers
      after prices have been manipulated to a desired level, along with the
      inevitable collapse of those prices with consequent investor
      losses.


·
            Our
      management is aware of the abuses that have occurred historically in the
      penny stock market.





Item
2. PROPERTY





XIOM
leases approximately 7,000 square feet of manufacturing and warehouse facility
in West Babylon, New York pursuant to a four-year lease at $5,000 per month. In
addition, XIOM leases a 2,000 square foot training and testing facility adjacent
to the above space on a month-to-month basis for $1,300 per month. Rent expense
for fiscal 2009 and 2008 was approximately $95,000 per annum. The manufacturing
and warehouse facility is adequate for the needs of the Company at this time.
However, if it were necessary to expand the manufacturing and warehouse
capacity, the Company would need to relocate its facilities, at an additional
cost per month. Such location would be relatively easy to locate, however the
initial cost of moving might be substantial.





In
addition, as a result of the acquisition of Equisol, LLC in December, 2009, the
Company acquired leased facilities in Conshohocken, PA, Baton Rouge, LA, and
Kemah, TX. Equisol leases these facilities at a monthly rent of $4,300. The
Company maintains its Corporate Headquarters in Conshohocken, PA.





Item 3. LEGAL
PROCEEDINGS





On
December 22, 2009, XIOM received a notice from holders of $820,000 of
convertible notes of XIOM that XIOM was in default of its obligations under the
notes, and acceleration and demand for payment of the face amount of the notes
and all accrued and unpaid interest. XIOM is in the process of reviewing these
claims.





We are
not aware of any other litigation, pending, or threatened at this time. We may
occasionally become subject to legal proceedings and claims that arise in the
ordinary course of our business. It is impossible for us to predict with any
certainty the outcome of pending disputes, and we cannot predict whether any
liability arising from pending claims and litigation will be material in
relation to our consolidated financial position or results of
operations.





Indemnification
of Officers and Directors





At
present we have not entered into individual indemnity agreements with our
Officer or Director.  However, our revised By-Laws and Certificate of
Incorporation provide a blanket indemnification that we shall indemnify, to the
fullest extent under Delaware law, our directors and officers against certain
liabilities incurred with respect to their service in such
capabilities.  In addition, the Certificate of Incorporation provides
that the personal liability of our directors and officers and our stockholders
for monetary damages will be limited.





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





The
Company’s Board of Directors approved on February 26, 2010, by unanimous written
consent, submission of an amendment to our Certificate of Incorporation to (a)
increase the number of authorized shares of Common Stock from 50,000,000 shares,
par value $0.0001 per share, to 125,000,000 shares, par value $0.0001 per share,
and (b) authorize the issuance of 25,000,000 shares of preferred stock, par
value $0.0001 per share (collectively, the “Amendment”). On March 8, 2010, the
Company received notice of written consent by holders of more than 50% of the
Company’s outstanding shares to this Amendment. The Company will file an
Information Statement with the Securities and Exchange Commission, and address
any comments received thereby before distributing the statement to all
shareholders and filing with the State of Delaware to effect the
Amendment.


21





Part
II





Item
5. Market for Common Equity and Related Stockholder Matters





General:





The
authorized capital stock consists of 50,000,000 shares of common stock, par
value $.0001 per share. As of April 15, there were 44,422,309 shares of Common
Stock issued and outstanding. The Company has a contractual commitment to issue
an additional 8,084,792 shares to the former owners of Equisol, LLC. 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 50,000,000 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 Our Common Stock:





Market
Information:





The
Company’s Common Stock is traded on the NASD OTC Bulletin Board under the symbol
“EIHC.OB” commencing on or about January 27, 2010.





There is
currently a limited trading market for the Company’s Common Stock with the price
being very volatile.  The following table shows the reported high and
low closing prices per share for our common stock through December 31,
2009.  Since that date through April 14, 2010, the closing price per
share has been between $0.30 and $0.11.





High
                    
                    
                    LowFiscal
      2009:Fourth
      quarter
                    
                    $
                    0.45
                    
                    
                    $
                    0.22Third
      quarter
                    
                    
                    0.49
                    
                    
                    $
                    0.21Second
      quarter
                    
                    
                    0.46
                    
                    
                    
                    0.09First
      quarter
                    
                    
                    0.35
                    
                    
                    
                    0.10Fiscal
      2008:Fourth
      quarter
                    
                    $
                    0.75
                    
                    
                    
                    0.12Third
      quarter
                    
                    
                    1.81
                    
                    
                    $
                    0.52Second
      quarter
                    
                    
                    2.19
                    
                    
                    
                    1.50First
      quarter
                    
                    
                    2.90
                    
                    
                    
                    1.05





Liquidation:





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





Dividend
Policy:





The
Company has never declared or paid cash dividends on its common stock and
anticipates that all future earnings will be retained for development of its
business.  The payment of any future dividends will be at the
discretion of the Board of Directors and will depend upon, among other things,
funds legally available, future earnings, capital requirements, the financial
condition of the Company and general business conditions.


22




Stock
Transfer Agent:





Our
transfer agent and registrar of the Common Stock is Manhattan Transfer Registrar
Company, P.O. Box 756, Miller Place, NY  11764, (631) 928-7655,(631) 928-6171
Fax




Sales
of Unregistered Securities





On
October 27, 2009, XIOM issued a total of 850,000 restricted shares with a fair
market value of $314,500 to officers, employees, directors, and consultants
coincident to the reverse merger on 7 December 2009. On that date, the Company
issued 2,300,000 restricted shares to a noteholder for $460,000
cash.  On November 3, 2009,  XIOM issued a total of
1,400,500 restricted shares to consultants coincident to the reverse merger on
December 2009.  From November 5, 2009 to December 31, 2009, a total of
1,500,000 shares of common stock were sold (1,100,000 shares prior to the
reverse merger on 7 December 2009 and 400,000 shares thereafter) in a private
placement at $0.25 per share; the related shares were issued to investors on
March 9, 2010.  On December 15, 2009, the Company issued 18,563,693
restricted shares in connection with the purchase of Equisol,) LLC.




Purchase of Equity Securities by the
Small Business Issuer and Affiliated Purchasers





We did
not repurchase any shares of our common stock during the year ending December
31, 2009.





Equity
Compensation Plan Information





None





ITEM
6.     SELECTED FINANCIAL
INFORMATION





Not
required





Item 7.MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION.





Overview


We
currently do not plan to conduct any business other than the business in which
EIHC and its subsidiaries XIOM and EQUISOL are engaged. We expect to continue to
incur significant research, development and administrative expenses before any
of our current or proposed products are approved for marketing, if ever, and
generate significant revenues.





Plan
of Operations:





Both
subsidiaries’ plans to move into an expansion phase were adversely affected by
the weakened economy during fiscal 2009 and such plans are expected to be
further adversely affected by the continued weakness of the economy during the
beginning of fiscal 2010. Going forward the focus of the subsidiaries is to
expand organically through increased sales and improved productivity through
reduced SG&A costs.  The parent company will begin to acquire
other entities focused on environmental equipment manufacturing, engineering,
services, and consulting as well as geographic expansion throughout North
America.  Longer term, we anticipate to emulate such acquisitions
internationally.





During
the first quarter of fiscal 2008, the Company’s subsidiary, XIOM introduced its
XIOM 5000, a high speed spray gun which can apply material five times faster
than the XIOM 1000 system each and significantly reduce the cost per square foot
of spray coating to less than $1.00 per square foot. During the last two years,
over 200 of XIOM’s spray systems were sold. The sales were primarily to
customers in North America with 40 systems going to overseas
customers.


23





XIOM now
offers the XIOM 1000 and XIOM 5000 spray gun in a combination package for
$15,000 and expects to sell approximately 100 of these systems on a worldwide
basis during fiscal 2010.  However, there can be no assurance that
XIOM will be able to achieve this target since this will entail a shipping rate
approximately equal to what XIOM has achieved in the past.  During an
expected weak economy in fiscal 2010, training and support which will be
required to support a customer base aggregating approximately 300 members as
well as supplying the requisite materials used in the spray systems will be a
significant economic and logistical challenge for XIOM.





XIOM
plans to incur patent acquisition expenditures of approximately $50,000 during
fiscal 2010.





XIOM has
a joint venture in the United States whose purpose is to develop contract
revenues from spraying coatings on ship hulls and ship super
structures.  Management is currently reviewing its plans for this
joint venture.





XIOM
formed a European distribution arrangement during the second quarter of fiscal
2008.  Through this arrangement, XIOM has sold 20 systems to date and
has established 6 independent European sub-distributors to date.  XIOM
plans to maintain its sales efforts in Europe during fiscal 2010.





The
Company’s overhead expense run rate has been decreased to approximately $150,000
per month during the first quarter of fiscal 2010. We have approximately $2
million of firm contracts in house. The Company believes that it has enough
funds to only operate for the next 3 months even if it does not sell any systems
or services.





The
Company is not able to accurately forecast sales for fiscal 2010.The Company
does not have sufficient cash resources and revenue to adequately support
overseas marketing plans for the foreseeable future. Therefore, without
increasing revenues or acquiring additional capital, it is likely that our
current overseas marketing plans will have to proceed at a slower
rate.




Critical
Accounting Policies





Management’s
discussion and analysis of our financial condition and results of operations are
based on our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires management to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an ongoing basis, management evaluates its estimates, including
those related to impairment of long-lived assets, finite lived intangible
assets, accrued liabilities and certain expenses. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ materially
from these estimates under different assumptions or conditions.





Our
significant accounting policies are summarized in Note 2 of our audited
financial statements for the year ended December 31, 2009. We believe the
following critical accounting policies affect our more significant judgments and
estimates used in the preparation of our financial statements:





REVENUE
RECOGNITION





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


24





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





INVENTORY





Inventory
consists primarily of various parts, materials and supplies utilized in the
assembly of water treatment systems and the assembly and 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.





SHARE
BASED PAYMENTS





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





Common
stock options granted to employees are issued for past services from time to
time, at the discretion of the Board of Directors, and the value of each option
is recorded as compensation expense as of the grant date. The related excess tax
benefit received upon the exercise of stock options has not been recognized
because, in the opinion of management, it is more likely than not, that such tax
benefit will not be utilized in the future.




IMPAIRMENT
OF LONG-LIVED ASSETS




In
accordance with Accounting Standards Codification (“ASC”) ASC 360-10-35,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the Company
reviews long-lived assets, including its property and equipment, goodwill and
other intangible assets, which include trade names and customer accounts and
patents, for impairment whenever circumstances and situations change such that
there is an indication that the carrying amounts may not be recovered. In such
circumstances, the Company will estimate the future cash flows expected to
result from the use of the asset and its eventual disposition. Future cash flows
are the future cash inflows expected to be generated by an asset less the future
outflows expected to be necessary to obtain those inflows. If the sum of the
expected future cash flows (undiscounted and without interest charges) is less
than the carrying amount of the asset, the Company will recognize an impairment
loss to adjust to the fair value of the asset. Management believes that there
are no impaired long-lived assets at December 31, 2009 and 2008. Coincident to
the 2009 acquisition of XIOM, the Company recorded an impairment loss on the
goodwill resulting from its acquisition of XIOM of $7,099,110.


25


Recently
Adopted Accounting Pronouncements




FASB ASC
820-10 establishes a framework for measuring fair value and expands disclosures
about fair value measurements. The changes to current practice resulting from
the application of this standard relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. This standard is effective for fiscal years beginning after
November 15, 2007; however, it provides a one-year deferral of the effective
date for non-financial assets and non-financial liabilities, except those that
are recognized or disclosed in the financial statements at fair value at least
annually. The Company adopted this standard for financial assets and financial
liabilities and nonfinancial assets and nonfinancial liabilities disclosed or
recognized at fair value on a recurring basis (at least annually) as of October
1, 2008. The Company adopted the standard for nonfinancial assets and
nonfinancial liabilities on October 1, 2009. The adoption of this standard in
each period did not have a material impact on its financial
statements.





FASB ASC
810-10 requires all entities to report noncontrolling (minority) interests in
subsidiaries as equity in the consolidated financial statements. The standard
establishes a single method of accounting for changes in a parent’s ownership
interest in a subsidiary that does not result in deconsolidation and expands
disclosures in the consolidated financial statements. This standard is effective
for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years.  This standard is not currently applicable to the
Company because the Company does not have any non-controlling minority
interests, other than one which is accounted for on the cost basis.





FASB ASC
815-10 is effective January 1, 2009. This standard requires enhanced disclosures
about derivative instruments and hedging activities to allow for a better
understanding of their effects on an entity’s financial position, financial
performance, and cash flows. Among other things, this standard requires
disclosures of the fair values of derivative instruments and associated gains
and losses in a tabular formant. This standard is not currently applicable to
the Company since the Company does not have derivative instruments or hedging
activity.





FASB ASC
825-10 requires disclosures about the fair value of financial instruments for
interim reporting periods. This standard is effective for interim reporting
periods ending after June 15, 2009. The adoption of this standard did not have a
material impact on the Company’s financial statements.





FASB ASC
820-10 provides additional guidance for Fair Value Measurements when the volume
and level of activity for the asset or liability has significantly decreased.
This standard is effective for interim and annual reporting periods ending after
June 15, 2009. The adoption of this standard did not have a material effect on
its financial statements.





FASB ASC
320-10 amends the other-than-temporary impairment guidance for debt and equity
securities. This standard is effective for interim and annual reporting periods
ending after June 15, 2009. The adoption of this standard did not have a
material effect on its financial statements.





FASB ASC
855-10 is effective for interim or annual financial periods ending after June
15, 2009 and establishes general standards of accounting and disclosure of
events that occur after the balance sheet but before financial statements are
issued or are available to be issued. However, since the Company is a public
entity, management is required to evaluate subsequent events through the date
that financial statements are issued and disclose the date through which
subsequent events have been evaluated, as well as the date the financial
statements were issued. This standard was adopted for its interim period ending
June 30, 2009. Subsequent events have been evaluated through November 16, 2009
the date the financial statements were issued.





In June
2009, the FASB issued Accounting Standards Update No. 2009-01, The FASB
Accounting Standards Codification, which establishes the Codification as the
source of authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. This standard is effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The
adoption of this standard is not expected to have an effect on the Company’s
financial reporting.





FASB ASC
805 establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. This standard also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. This standard was adopted by the Company beginning October 1, 2009
and will change the accounting for business combinations on a prospective
basis.


26





FASB ASC
350-30 and 275-10 amend the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset. This standard is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early adoption is prohibited. The Company is
currently evaluating the effect of this statement on its financial position and
results of operations.





FASB ASC
260-10 provides that unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and shall be included in the computation of
earnings per share pursuant to the two-class method. This standard is effective
for financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. The Company does not
currently have any share-based awards that would qualify as participating
securities. Therefore, application of this standard is not expected to have an
effect on the Company's financial reporting.





FASB ASC
470-20 will be effective for financial statements issued for fiscal years
beginning after December 15, 2008. The standard includes guidance that
convertible debt instruments that may be settled in cash upon conversion should
be separated between the liability and equity components, with each component
being accounted for in a manner that will reflect the entity's nonconvertible
debt borrowing rate when interest costs are recognized in subsequent periods.
This standard is currently not applicable to the Company since the Company does
not have any convertible debt that may be settled for cash upon
conversion.





FASB ASC
815-10 and 815-40 are effective for financial statements for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. The standard addresses the determination of whether an instrument (or an
embedded feature) is indexed to an entity’s own stock, which is the first part
of the scope exception for the purpose of determining whether the instrument is
classified as an equity instrument or accounted for as a derivative instrument
which would be recognized either as an asset or liability and measured at fair
value. The standard shall be applied to outstanding instruments as of the
beginning of the fiscal year in which this standard is initially applied. Any
debt discount that was recognized when the conversion option was initially
bifurcated from the convertible debt instrument shall continue to be amortized.
The cumulative effect of the change in accounting principles shall be recognized
as an adjustment to the opening balance of retained earnings. The Company
adopted this standard as of January 1, 2009, and was not required to reclassify
any of its warrants as liabilities.





As of
September 30, 2009, the FASB has issued Accounting Standards Updates (ASU)
through No. 2009-12. None of the ASUs have had an impact on the Company’s
financial statements.





Recently
Issued Accounting Pronouncements Not Yet Adopted




In
January, 2010, the FASB issued ASUs No. 2010-01 through 2010-07. In February,
2010, the FASB issued ASU No. 2009-08 through 2010-10. In March, 2010, the FASB
issued ASU 2010-11. The Company is currently evaluating the effect of these
standards updates on its financial position and results of
operations.




Results
of Operations:





Because the merger of the Company with
Equisol was accounted for as a reverse merger for accounting purposes, the
unaudited comparative consolidated financial statements reflect the results of
operations of Equisol prior to the merger on December 7, 2009.





For
the Fiscal Years Ended December 31, 2009 VersusDecember 31, 2008




For the
fiscal year ended December 31, 2009, the Company recorded $4,656,000 in sales
and cost of sales of $3,363,000. This is in comparison to total sales of
$6,236,000 and cost of sales of $4,336,000 for the fiscal year ended December
31, 2008. The Company’s discontinued operation recorded sales of $1,689,000 in
2009 and $1,984,000 in fiscal 2008. Gross profit for fiscal 2009 was $1,293,000
or 28%, a decrease of $606,000 compared to the gross profit in fiscal 2008 of
$1,899,000(which was 30% of revenue).  This decrease in sales and
gross profit in fiscal 2009 resulted primarily from general economic conditions
and the Company's limited ability to generate profitable sales.


27





Selling,
general and administrative expenses decreased from $1,961,000 in fiscal 2008 to
$1,887,000 in fiscal 2009.  Cost containment measures in the areas of
reduced headcount, marketing and general overhead lowered expenses at our
Equisol subsidiary by $340,000 or 17%.  This decrease in selling, general
and administrative expenses was offset by expenses related to the merger, and an
increase of $25,000 in allowance for uncollectible accounts.





Other
expense increased from $106,000 in fiscal 2008 to $7,205,000 in fiscal
2009.  While interest expense was unchanged between periods, in 2009
the Company recorded a $7,099,000 charge for impairment of goodwill, which
resulted from accounting for the merger of Equisol and the Company as a reverse
merger. Because the Company’s XIOM subsidiary, prior to the merger, had a
significant stockholder’s deficit and had sustained operating losses for several
years, the goodwill resulting from the reverse merger was considered by
management to be impaired.





The
Company’s results of operations showed a loss of $94,000 in 2008 and a net loss
of $7,835,000 in fiscal 2009. This increased loss was attributable to the
reduction of gross profit and the charge for goodwill impairment offset by a
decrease in general and administrative expenses as described above.





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





Liquidity,
Capital Resources and Operations:





Our
liquidity comes from two sources.  Internally, if we increase sales,
we would be able to increase the acquisition of raw materials and increase our
production.  This would in turn increase the short-term liquidity of
the Company.  Externally, we may gain long-term liquidity from the sale of
common stock and from the exercise of warrants by the shareholders from the
recent private placements.





There are
no known trends, events or uncertainties that have or are reasonably likely to
have a material impact on the Company’s short-term or long-term liquidity, other
than the inability to sell our products, or the failure to sell any of future
shares of common stock or the lack of exercise of the warrants by the
shareholders.  Near term the current turmoil in financial markets may
make new fund raising more difficult than in the recent past.





At
December 31, 2009, the Company had negative working capital. During the fiscal
years ended December 31, 2009, net cash used by operating activities was
$278,000; in fiscal 2008, operating activities used $19,000. The Company
incurred net losses of $7,835,000 for the fiscal year ended December 31, 2009.
Additionally, at December 31, 2009, the Company had a Stockholders’ Deficit of
$3,252,000.





These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. The Company anticipates that in order to fulfill its plan of
operations, it will need to seek financing from outside sources.  To this
end, the Company is constantly pursuing private debt and equity sources.
 However, there is no assurance that any future financing, if successful,
will be sufficient to allow the Company to operate profitably or
successfully. It is also the intention of the Company’s management to
improve profitability by significantly increasing sales of its wastewater
treatment services and its patented thermal spray process in fiscal 2010 while
maintaining reasonable levels general and administrative expenses as the company
grows.





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


28





In
private placement transactions completed subsequent to the filing of our initial
registration statement, from January 1, 2006 through October 20, 2006 (the
effective date of the registration statement) we sold a total of 563,718 shares
of restricted common stock from which we received gross offering proceeds of
$670,000. These securities were offered and sold in reliance upon claimed
private placement exemptions from registration. As a result, the purchasers of
the shares may have the right to claim that the purchase transactions violated
the federal securities laws. If any of these transactions did violate federal
securities laws, the purchasers in those transactions may have claims against us
for damages or for rescission and recovery of their full subscription price,
plus interest. Although none of the purchasers of these shares has made or
threatened any claim against us alleging violation of federal securities laws,
in the event the purchasers of these securities successfully asserted claims for
rescission it would have a substantial adverse effect on our business and on our
ability to continue to operate. We may not have sufficient funds available to
pay such claims, and there is no assurance that we would be able to obtain funds
from other sources.  In that event, we may be forced to cease operations
and liquidate our available assets to pay our liabilities, including, but not
limited to, the rescission claims.





In
connection with the acquisition of Equisol, LLC, the Company raised $705,000 in
a private placement. These funds were used to pay for costs of the acquisition,
working capital needs such as outstanding and overdue payables.





Change
of Fiscal Year





In
connection with the reverse merger for accounting purposes with Equisol, LLC,
the Company changed its fiscal year. The Company previously reported its results
of operations for the year ended September 30, 2009 on Form 10-K filed with the
Securities and Exchange Commission on January 13, 2010.





For the
three months ended December 31, 2009, the legal acquirer had the following
results of operations:





Revenues
                  
                  $
                  118,018Cost
      of Revenues
                  
                  
                  117,438Gross
      Profit
                  
                  
                  580Selling,
      General & Administrative Expenses
                  
                  
                  371,319Loss
      from Operations
                  
                  
                  (370,739
                  )Interest
      Expense
                  
                  
                  317,184Net
      Loss
                  
                  
                  (687,923
                  )





Inflation





The
amounts presented in the financial statements do not provide for the effect of
inflation on the Company’s operations or its financial position. Amounts shown
for machinery, equipment and leasehold improvements and for costs and expenses
reflect historical cost and do not necessarily represent replacement cost. The
net operating losses shown would be greater than reported if the effects of
inflation were reflected either by charging operations with amounts that
represent replacement costs or by using other inflation
adjustments.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to
investors.


29


Item
8.FINANCIAL
STATEMENTS




Index To
Consolidated Financial Statements





Report
      of Independent Registered Public Accounting Firm
                      F-2Consolidated
      Balance Sheets as of December 31, 2009 and 2008
                      F-3Consolidated
      Statements of Operations for the years endedDecember 31, 2009 and
      2008
                      F-4Consolidated
      Statements of Changes in Stockholders’Deficit for the years
      ended December 31, 2009 and 2008
                      F-5Consolidated
      Statements of Cash Flows for the years endedDecember 31, 2009
      and 2008
                      F-6Notes
      to Consolidated Financial Statements
                      F-7


F-1





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders of Environmental Infrastructure Holdings
Corp.:





I have
audited the accompanying consolidated balance sheets of Environmental
Infrastructure Holdings Corp. and subsidiaries (the Company) as of December 31,
2009 and 2008 and the related consolidated statements of operations,
stockholders’ deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the Company’s management. My responsibility
is to express an opinion on these financial statements based on my
audits.





I
conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audits 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. I believe that my
audits provide a reasonable basis for my opinion.





In my
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Environmental Infrastructure
Holdings Corp. and subsidiaries as of December 31, 2009 and 2008 and the results
of their operations and cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States.





The
accompanying consolidated financial statements referred to above have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 14 to the consolidated financial statements, the Company has
incurred losses for the years ended December 31, 2009 and 2008 and has a
deficiency in stockholders’ equity at December 31, 2009. These factors raise
substantial doubt about its ability to continue as a going concern. Management’s
plans in regard to this matter are also described in Note 14. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.





/s/
Michael T. Studer CPA P.C.





Freeport,
New York


September
23, 2010


F-2





Environmental
Infrastructure Holdings Corp.


Consolidated
Balance Sheets


As
of December 31, 2009 and 2008





2009
                                    
                                    
                                    2008ASSETSCurrent
      AssetsCash
      and cash equivalents
                                    
                                    $
                                    246,725
                                    
                                    
                                    $
                                    19,612Accounts
      receivable, net of allowance for doubtful accounts of $245,000 and
      $75,000, respectively
                                    
                                    
                                    486,860
                                    
                                    
                                    
                                    755,042Inventory
                                    
                                    
                                    351,488
                                    
                                    
                                    
                                    161,413Prepaid
      expenses and other current assets
                                    
                                    
                                    32,728
                                    
                                    
                                    
                                    -Total
      Current Assets
                                    
                                    
                                    1,117,801
                                    
                                    
                                    
                                    936,067Property
      and equipment, net of accumulated depreciation and
      amortization
                                    
                                    
                                    174,739
                                    
                                    
                                    
                                    30,673Assets
      of subsidiary spunoff on December 7, 2009
                                    
                                    
                                    -
                                    
                                    
                                    
                                    510,473Other
      AssetsIntangible
      assets, net of accumulated amortization and impairment
      allowances
                                    
                                    
                                    289,315
                                    
                                    
                                    
                                    287,464Retainage
      receivable
                                    
                                    
                                    51,851
                                    
                                    
                                    
                                    -Investment
      in and advances to publicly traded investee, net
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    -Security
      deposits
                                    
                                    
                                    11,445
                                    
                                    
                                    
                                    -Total
      Other Assets
                                    
                                    
                                    402,611
                                    
                                    
                                    
                                    287,464Total
      Assets
                                    
                                    $
                                    1,695,151
                                    
                                    
                                    $
                                    1,764,677LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      LiabilitiesCurrent
      portion of debt
                                    
                                    $
                                    2,830,789
                                    
                                    
                                    $
                                    1,050,417Accounts
      payable
                                    
                                    
                                    873,883
                                    
                                    
                                    
                                    404,837Accrued
      expenses
                                    
                                    
                                    351,710
                                    
                                    
                                    
                                    26,372Accrued
      compensation
                                    
                                    
                                    150,000
                                    
                                    
                                    
                                    -Accrued
      interest
                                    
                                    
                                    495,352
                                    
                                    
                                    
                                    92,255Total
      Current Liabilities
                                    
                                    
                                    4,701,734
                                    
                                    
                                    
                                    1,573,881Long
      term portion of debt
                                    
                                    
                                    245,621
                                    
                                    
                                    
                                    288,175Liabilities
      of subsidiary spunoff on December 7, 2009
                                    
                                    
                                    -
                                    
                                    
                                    
                                    329,679Total
      Liabilities
                                    
                                    
                                    4,947,355
                                    
                                    
                                    
                                    2,191,735COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      DEFICITCommon
      stock, $.0001 par value; authorized 50,000,000 shares:Issued
      and outstanding 41,811,100 and 18,080,005 shares,
    respectively
                                    
                                    
                                    4,181
                                    
                                    
                                    
                                    1,808Committed
      to be issued 9,609,942 and 8,084,942 shares,
    respectively
                                    
                                    
                                    961
                                    
                                    
                                    
                                    808Additional
      paid in capital
                                    
                                    
                                    5,345,807
                                    
                                    
                                    
                                    144,590Retained
      earnings (deficit)
                                    
                                    
                                    (8,603,153
                                    )
                                    
                                    
                                    (587,320
                                    )Total
      Company Deficit
                                    
                                    
                                    (3,252,204
                                    )
                                    
                                    
                                    (440,114
                                    )Noncontrolling
      interest
                                    
                                    
                                    -
                                    
                                    
                                    
                                    13,056Total
      Stockholders' Deficit
                                    
                                    
                                    (3,252,204
                                    )
                                    
                                    
                                    (427,058
                                    )Total
      Liabilities and Stockholder's Deficit
                                    
                                    $
                                    1,695,151
                                    
                                    
                                    $
                                    1,764,677




See
accompanying notes to consolidated financial statements.




F-3




Environmental
Infrastructure Holdings Corp.


Consolidated
Statements of Operations


For
the Years Ended December 31,





2009
                                              
                                              
                                              2008Revenues
                                              
                                              $
                                              4,656,341
                                              
                                              
                                              $
                                              6,236,258Cost
      of Revenues
                                              
                                              
                                              3,363,310
                                              
                                              
                                              
                                              4,336,802Gross
      Profit
                                              
                                              
                                              1,293,031
                                              
                                              
                                              
                                              1,899,456Operating
      ExpensesSelling,
      general and administrative expenses
                                              
                                              
                                              1,886,781
                                              
                                              
                                              
                                              1,961,568Operating
      Loss
                                              
                                              
                                              (593,750
                                              )
                                              
                                              
                                              (62,112
                                              )Other
      (Expense) IncomeImpairment
      of Xiom related goodwill upon acquisition by Company
                                              
                                              
                                              (7,099,110
                                              )
                                              
                                              
                                              -Interest
      Expense
                                              
                                              
                                              (105,881
                                              )
                                              
                                              
                                              (106,321
                                              )Interest
      Income
                                              
                                              
                                              233
                                              
                                              
                                              
                                              366Total
      Other (Expense) Income
                                              
                                              
                                              (7,204,758
                                              )
                                              
                                              
                                              (105,955
                                              )Loss
      from Continuing Operations before Income Tax Provision
                                              
                                              
                                              (7,798,508
                                              )
                                              
                                              
                                              (168,067
                                              )Income
      tax provision
                                              
                                              
                                              31,008
                                              
                                              
                                              
                                              13,319Loss
      from Continuing Operations
                                              
                                              
                                              (7,829,516
                                              )
                                              
                                              
                                              (181,386
                                              )Income
      (loss) from Discontinued Operations, net of income tax
                                              
                                              
                                              (5,256
                                              )
                                              
                                              
                                              87,309Net
      Loss
                                              
                                              $
                                              (7,834,772
                                              )
                                              
                                              $
                                              (94,077
                                              )Loss
      per common share, basic and diluted:Loss
      from continuing operations
                                              
                                              $
                                              (0.28
                                              )
                                              
                                              $
                                              (0.01
                                              )Loss
      from discontinued operations
                                              
                                              
                                              0.00
                                              
                                              
                                              
                                              0.01Net
      Loss
                                              
                                              $
                                              (0.28
                                              )
                                              
                                              $
                                              (0.00
                                              )Weighted
      average number of common shares outstanding, basic and
    diluted
                                              
                                              
                                              27,892,844
                                              
                                              
                                              
                                              26,164,947





See
accompanying notes to consolidated financial statements.


F-4





Environmental
Infrastructure Holdings Corp.


Consolidated
Statements of Stockholders' Deficit


For
the Years Ended December 31, 2009 and 2008





CommonStock,$.0001ParValueIssuedShares
                                
                                
                                SharesCommittedtobeIssued
                                
                                
                                Additional Paid
                                
                                
                                Accumulated
                                
                                
                                TotalStockholders'Shares
                                
                                
                                Par Value
                                
                                
                                Shares
                                
                                
                                Par Value
                                
                                
                                In Capital
                                
                                
                                Deficit
                                
                                
                                DeficitBalance,
      December 31, 2007, retroactively restated for reverse
    merger
                                
                                
                                18,080,005
                                
                                
                                $
                                1,808
                                
                                
                                
                                8,084,942
                                
                                
                                $
                                808
                                
                                
                                $
                                144,590
                                
                                
                                $
                                (493,243
                                )
                                
                                $
                                (346,037
                                )Net
      loss for year ended December 31, 2008
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (94,077
                                )
                                
                                
                                (94,077
                                )Balance,
      December 31, 2008
                                
                                
                                18,080,005
                                
                                
                                
                                1,808
                                
                                
                                
                                8,084,942
                                
                                
                                
                                808
                                
                                
                                
                                144,590
                                
                                
                                
                                (587,320
                                )
                                
                                
                                (440,114
                                )Conversion
      of convertible note to common stock on December 7, 2009
                                
                                
                                483,688
                                
                                
                                
                                48
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                149,952
                                
                                
                                
                                -
                                
                                
                                
                                150,000Spinoff
      of subsidiary to members of Equisol on December 7, 2009
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (144,477
                                )
                                
                                
                                (181,061
                                )
                                
                                
                                (325,538
                                )18,563,693
                                
                                
                                
                                1,856
                                
                                
                                
                                8,084,942
                                
                                
                                
                                808Shares
      retained by EIHC (formerly XIOM Corp.) shareholders in reverse merger with
      Equisol, LLC on December 7, 2009
                                
                                
                                23,247,407
                                
                                
                                
                                2,325
                                
                                
                                
                                1,125,000
                                
                                
                                
                                113
                                
                                
                                
                                5,135,432
                                
                                
                                
                                -
                                
                                
                                
                                5,137,870Sales
      of additional shares from December 7, 2009 to December 31, 2009 under XIOM
      private placement which commenced prior to the reverse merger with Equisol
      on December 7, 2009, net of offering costs of $39,650
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                400,000
                                
                                
                                
                                40
                                
                                
                                
                                60,310
                                
                                
                                
                                -
                                
                                
                                
                                60,350Net
      loss for year ended December 31, 2009
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (7,834,772
                                )
                                
                                
                                (7,834,772
                                )Balance,
      December 31, 2009
                                
                                
                                41,811,100
                                
                                
                                $
                                4,181
                                
                                
                                
                                9,609,942
                                
                                
                                $
                                961
                                
                                
                                $
                                5,345,807
                                
                                
                                $
                                (8,603,153
                                )
                                
                                $
                                (3,252,204
                                )





See
accompanying notes to consolidated financial statements.





F-5





Environmental
Infrastructure Holdings Corp.


Consolidated
Statements of Cash Flows


For
the Years Ended December 31,





2009
                            
                            
                            2008Cash
      Flow from Operating ActivitiesNet
      Loss
                            
                            $
                            (7,834,772
                            )
                            
                            $
                            (94,077
                            )Adjustments
      to reconcile net loss to cash used in operating
activities:Impairment
      of XIOM related goodwill upon acquisition by the Company
                            
                            
                            7,099,110
                            
                            
                            
                            -Provision
      for doubtful accounts
                            
                            
                            85,000
                            
                            
                            
                            60,000Depreciation
      and amortization
                            
                            
                            35,517
                            
                            
                            
                            20,801Amortization
      of debt discounts
                            
                            
                            5,949
                            
                            
                            
                            5,493Net
      change in operating assets and liabilities:Accounts
      Receivable
                            
                            
                            200,796
                            
                            
                            
                            469,979Inventory
                            
                            
                            (11,491
                            )
                            
                            
                            (16,357
                            )Prepaid
      expenses and other current assets
                            
                            
                            (1,459
                            )
                            
                            
                            -Assets
      and liabilities of subsidiary spunoff on December 7, 2009
                            
                            
                            -
                            
                            
                            
                            (151,455
                            )Accounts
      payable
                            
                            
                            52,263
                            
                            
                            
                            (350,757
                            )Accrued
      expenses
                            
                            
                            90,767
                            
                            
                            
                            36,888Net
      cash used in operating activities
                            
                            
                            (278,320
                            )
                            
                            
                            (19,485
                            )Cash
      Flow from Investing ActivitiesIncrease
      in cash due to acquisition of XIOM Corp., including escrow cash of
      $268,975 related to its private placement offering
                            
                            
                            348,028
                            
                            
                            
                            -Intangible
      assets additions
                            
                            
                            (5,451
                            )
                            
                            
                            -Property
      and equipment additions
                            
                            
                            (6,320
                            )
                            
                            
                            (12,107
                            )Net
      cash provided by (used in) investing activities
                            
                            
                            336,257
                            
                            
                            
                            (12,107
                            )Cash
      Flow from Financing ActivitiesIncreases
      in debt
                            
                            
                            9,241
                            
                            
                            
                            101,401Decreases
      in debt
                            
                            
                            (105,390
                            )
                            
                            
                            (49,591
                            )Proceeds
      from XIOM private placement offerings, net of offering
    costs
                            
                            
                            265,325
                            
                            
                            
                            -Decrease
      in cash overdraft
                            
                            
                            -
                            
                            
                            
                            (606
                            )Net
      cash provided by (used in) financing activities
                            
                            
                            169,176
                            
                            
                            
                            51,204Increase
      (decrease) in cash and cash equivalents
                            
                            
                            227,113
                            
                            
                            
                            19,612Cash
      and cash equivalents, beginning of year
                            
                            
                            19,612
                            
                            
                            
                            -Cash
      and cash equivalents, end of year
                            
                            $
                            246,725
                            
                            
                            $
                            19,612Supplemental
      disclosures of cash flow information:Interest
      paid
                            
                            $
                            105,881
                            
                            
                            $
                            106,321Income
      taxes paid
                            
                            $
                            31,008
                            
                            
                            $
                            13,319Supplemental
      noncash disclosures:Conversion
      of Equisol convertible note to common stock onDecember 7,
      2009
                            
                            $
                            150,000
                            
                            
                            $
                            -


F-6





ENVIRONMENTAL
INFRASTRUCTURE HOLDINGSCORP.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


For The
Years Ended December 31, 2009 and 2008





1)
            ENTITY
      AND ORGANIZATION





Environmental
Infrastructure Holdings Corp. (“EIHC”, or the “Company”), was incorporated in
Delaware on November 5, 2009. The Company was formed to be the holding company
of XIOM Corp. (“XIOM”).  See “Reorganization” below.  The
Company is the successor issuer of XIOM for purposes of the Securities Act of
1933, as amended, and the filings made by XIOM thereunder. Pursuant to Rule
12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the
“Act”), the Company is the successor issuer of XIOM with respect to XIOM Common
Shares, which were registered pursuant to Section 12(g) of the Act. Pursuant to
such rule, the Company Common Shares may be deemed to be registered pursuant to
Section 12(g) of the Act.





Reorganization





On
December 7, 2009, XIOM reorganized into a holding company structure (the
“Reorganization”) whereby XIOM became a direct wholly owned subsidiary of the
Company pursuant to an Agreement and Plan of Merger pursuant to Section 251(g)
of the Delaware General Corporation Law (the “Merger Agreement”) dated as of
December 7, 2009, by and among the Company, XIOM and EIHC Merger Co. (“Merger
Sub”).





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





Operations





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





XIOM
sells thermal spray system equipment and related powder and other supplies to
customers from its New York location.





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





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





On August
29, 2007, Equisol’s subsidiary Gulf State Acquisition, LLC acquired a
100%  stock ownership in an engineering company, Electrical &
Instrumentation, Inc. (“E&I”), for 104,607 Class A Units of membership
interest of Equisol (now 143,359 shares of EIHC common stock). Thereafter, the
acquired company’s operations were included with Equisol’s operations and the
acquiree filed a final income tax return for the period January 1, 2007 to
August 29, 2007. In February 2010, the E&I division of Equisol ceased
operations (see Note 9).


F-7





2)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





PRINCIPLES
OF CONSOLIDATION





The
consolidated balance sheet at December 31, 2009 includes the accounts of EIHC
and its wholly-owned subsidiaries Equisol (including Equisol’s Gulf States
subsidiary) and XIOM. The consolidated statements of operations, stockholders’
deficit, and cash flows for the years ended December 31, 2009 and 2008 include
the accounts of EIHC (from December 7, 2009 to December 31, 2009), Equisol (from
inception to December 31, 2009), and XIOM (from December 7, 2009 to December 31,
2009). As of December 7, 2009, the PDIR subsidiary was spun off to Equisol’s
members prior to the merger with EIHC, and is accounted for prior to that date
as a discontinued operation in the consolidated financial statements presented.
All significant intercompany balances and transactions have been eliminated in
consolidation.





USE
OF ESTIMATES





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





FAIR
VALUE OF FINANCIAL INSTRUMENTS





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





REVENUE
RECOGNITION





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





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





CASH
AND CASH EQUIVALENTS





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





ACCOUNTS
RECEIVABLE





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


F-8


INVENTORY





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





PROPERTY,
EQUIPMENT AND DEPRECIATION





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





EQUITY
INVESTMENTS





Equity
investments of 20% to 50% ownership are accounted for using the Equity Method of
accounting. Equity investments of less than 20% ownership are accounted for
using the Cost Method of accounting and equity investments of greater than 50%
ownership are consolidated with the financials of the Company, as appropriate.
See Note 8.





IMPAIRMENT
OF LONG-LIVED ASSETS




In
accordance with Accounting Standards Codification (“ASC”) ASC 360-10-35,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the Company
reviews long-lived assets, including its property and equipment, goodwill and
other intangible assets, which include trade names and customer accounts and
patents, for impairment whenever circumstances and situations change such that
there is an indication that the carrying amounts may not be recovered. In such
circumstances, the Company will estimate the future cash flows expected to
result from the use of the asset and its eventual disposition. Future cash flows
are the future cash inflows expected to be generated by an asset less the future
outflows expected to be necessary to obtain those inflows. If the sum of the
expected future cash flows (undiscounted and without interest charges) is less
than the carrying amount of the asset, the Company will recognize an impairment
loss to adjust to the fair value of the asset. Management believes that there
are no impaired long-lived assets at December 31, 2009 and 2008. Coincident to
the 2009 acquisition of XIOM, the Company recorded an impairment loss on the
goodwill resulting from its acquisition of XIOM of $7,099,110. See Note
6.





EARNINGS
(LOSS) PER SHARE





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





Basic EPS
is computed by dividing net income or loss available to common shareholders by
the weighted average number of common shares outstanding during the period. The
computation of Diluted EPS gives effect to all potentially dilutive common
shares during the period. The computation of Diluted EPS does not assume
conversion, exercise or contingent exercise of securities that would have an
antidilutive effect on earnings. For the years ended December 31, 2009 and 2008,
the diluted loss per common share calculation excluded the following potentially
dilutive securities:


F-9





Common Shares EquivalentYear Ended December 31,2009
                  
                  2008Convertible
      notes payable (see Note 8)
                  
                  
                  2,239,700
                  
                  
                  
                  483,688Stock
      options  (see Note 10)
                  
                  
                  6,186,500
                  
                  
                  
                  -Common
      stock purchase warrants (see Note 10)
                  
                  
                  3,653,916
                  
                  
                  
                  -Total
                  
                  
                  12,080,116
                  
                  
                  
                  483,688





INCOME
TAXES





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





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




Interest
costs and penalties related to income taxes are classified as interest expense
and selling, general and administrative costs, respectively, in the Company's
financial statements. For the years  ended December 31, 2009 and 2008,
the Company did not recognize any interest or penalty expense related to income
taxes. The Company is currently subject to a three-year statute of limitations
by major tax jurisdictions.





FOREIGN
CURRENCY TRANSLATION





For any
future foreign subsidiaries, where the functional currency is other than the
U.S. Dollar, revenue and expense accounts will be translated at the average
rates during the period, and the balance sheet items will be translated at
period end rates. Translation adjustments arising from the use of differing
exchange rates from period to period will be included as a component of
Stockholders’ Equity. Gains and losses from foreign currency transactions are
included in Net Income. In the years ended December 31, 2009 and 2008, all
foreign sales were transacted in U.S. dollars.





SHARE
BASED PAYMENTS





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


F-10




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





RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS





Recently
Adopted Accounting Pronouncements




FASB ASC
820-10 establishes a framework for measuring fair value and expands disclosures
about fair value measurements. The changes to current practice resulting from
the application of this standard relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. This standard is effective for fiscal years beginning after
November 15, 2007; however, it provides a one-year deferral of the effective
date for non-financial assets and non-financial liabilities, except those that
are recognized or disclosed in the financial statements at fair value at least
annually. The Company adopted this standard for financial assets and financial
liabilities and nonfinancial assets and nonfinancial liabilities disclosed or
recognized at fair value on a recurring basis (at least annually) as of January
1, 2008. The Company adopted the standard for nonfinancial assets and
nonfinancial liabilities on January 1, 2009. The adoption of this standard in
each period did not have a material impact on its financial
statements.




FASB ASC
810-10 requires all entities to report noncontrolling (minority) interests in
subsidiaries as equity in the consolidated financial statements. The standard
establishes a single method of accounting for changes in a parent’s ownership
interest in a subsidiary that does not result in deconsolidation and expands
disclosures in the consolidated financial statements. This standard is effective
for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years.  This standard is not currently applicable to the
Company because the Company does not have any non-controlling minority
interests, other than that disclosed in Note 7 below, which is accounted for on
the cost method.




FASB ASC
815-10 is effective January 1, 2009. This standard requires enhanced disclosures
about derivative instruments and hedging activities to allow for a better
understanding of their effects on an entity’s financial position, financial
performance, and cash flows. Among other things, this standard requires
disclosures of the fair values of derivative instruments and associated gains
and losses in a tabular format. This standard is not currently applicable to the
Company since the Company does not have derivative instruments or hedging
activity.




FASB ASC
825-10 requires disclosures about the fair value of financial instruments for
interim reporting periods. This standard is effective for interim reporting
periods ending after June 15, 2009. The adoption of this standard did not have a
material impact on the Company’s financial statements.




FASB ASC
820-10 provides additional guidance for Fair Value Measurements when the volume
and level of activity for the asset or liability has significantly decreased.
This standard is effective for interim and annual reporting periods ending after
June 15, 2009. The adoption of this standard did not have a material effect on
the Company’s financial statements.




FASB ASC
320-10 amends the other-than-temporary impairment guidance for debt and equity
securities. This standard is effective for interim and annual reporting periods
ending after June 15, 2009. The adoption of this standard did not have a
material effect on the Company’s financial statements.




FASB ASC
855-10 is effective for interim or annual financial periods ending after June
15, 2009 and establishes general standards of accounting and disclosure of
events that occur after the balance sheet but before financial statements are
issued or are available to be issued. However, since the Company is a public
entity, management is required to evaluate subsequent events through the date
that financial statements are issued and disclose the date through which
subsequent events have been evaluated, as well as the date the financial
statements were issued. This standard was adopted for the Company’s interim
period ended June 30, 2009. Subsequent events have been evaluated through July
20, 2010, the date these financial statements were issued.




F-11


In June
2009, the FASB issued Accounting Standards Update No. 2009-01, The FASB
Accounting Standards Codification, which establishes the Codification as the
source of authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. This standard is effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The
adoption of this standard did not have an effect on the Company’s financial
reporting.




FASB ASC
805 establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. This standard also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. This standard was adopted by the Company beginning January 1, 2009
and will change the accounting for business combinations on a prospective
basis.




FASB ASC
350-30 and 275-10 amend the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset. This standard is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early adoption is prohibited. This standard was
adopted by the Company beginning January 1, 2009, and did not have a material
effect on its financial statements.




FASB ASC
260-10 provides that unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and shall be included in the computation of
earnings per share pursuant to the two-class method. This standard is effective
for financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. The Company does not
currently have any share-based awards that would qualify as participating
securities. Therefore, application of this standard did not have any effect on
the Company's financial reporting.




FASB ASC
470-20 is effective for financial statements issued for fiscal years beginning
after December 15, 2008. The standard includes guidance that convertible debt
instruments that may be settled in cash upon conversion should be separated
between the liability and equity components, with each component being accounted
for in a manner that will reflect the entity's nonconvertible debt borrowing
rate when interest costs are recognized in subsequent periods. This standard is
currently not applicable to the Company since the Company does not have any
convertible debt that may be settled for cash upon conversion.




FASB ASC
815-10 and 815-40 are effective for financial statements for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. The standard addresses the determination of whether an instrument (or an
embedded feature) is indexed to an entity’s own stock, which is the first part
of the scope exception for the purpose of determining whether the instrument is
classified as an equity instrument or accounted for as a derivative instrument
which would be recognized either as an asset or liability and measured at fair
value. The standard shall be applied to outstanding instruments as of the
beginning of the fiscal year in which this standard is initially applied. Any
debt discount that was recognized when the conversion option was initially
bifurcated from the convertible debt instrument shall continue to be amortized.
The cumulative effect of the change in accounting principles shall be recognized
as an adjustment to the opening balance of retained earnings. The Company
adopted this standard as of January 1, 2009, and was not required to reclassify
any of its warrants as liabilities.




As of
December 31, 2009, the FASB has issued Accounting Standards Updates (ASU)
through No. 2009-17. None of the ASUs have had an impact on the Company’s
financial statements.




Recently
Issued Accounting Pronouncements Not Yet Adopted




In
January, 2010, the FASB issued ASU Nos. 2010-01 through 2010-07. In February,
2010, the FASB issued ASU Nos. 2009-08 through 2010-10. In March, 2010, the FASB
issued ASU 2010-11. The Company is currently evaluating the effect of these
standards updates on its financial position and results of
operations.




3) 
ACQUISITION OF EIHC




As noted
above, on December 7, 2009, EIHC (legal acquirer) acquired Equisol and its
subsidiaries (legal acquiree) in a transaction which has been accounted for in
the accompanying financial statements as a reverse merger. As a result, the
financial position and results of operations of EIHC and its subsidiary XIOM
prior to the date of the acquisition have been excluded from the accompanying
financial statements, and the results of operations  presented for the year
ended  December 31, 2008 are for Equisol and its subsidiaries.




F-12


In
connection with the merger, Equisol members received 18,563,693 shares and are
entitled to receive an additional 8,084,942 shares. At the closing price on the
date of acquisition, this represented consideration of $7,728,104.




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





Cash
      and cash equivalents, including $268,975 held in escrow
    fromXIOM
      private placement offering
                                                  
                                                  $
                                                  348,028Accounts
      receivable(net
      of allowance for doubtful accounts of $85,000)
                                                  
                                                  
                                                  17,614Stock
      subscription receivable (collected December 8, 2009)
                                                  
                                                  
                                                  204,975Inventory
                                                  
                                                  
                                                  178,584Prepaid
      expenses and other current assets
                                                  
                                                  
                                                  22,562Property
      and equipment, net
                                                  
                                                  
                                                  167,263Patents
                                                  
                                                  
                                                  2,400Retainage
      receivable
                                                  
                                                  
                                                  51,851Investment
      in and advances to investee
                                                  
                                                  
                                                  50,000Security
      deposits
                                                  
                                                  
                                                  11,445Total
      assets
                                                  
                                                  
                                                  1,054,722Current
      portion of debt
                                                  
                                                  
                                                  1,819,31Accounts
      payable
                                                  
                                                  
                                                  1416,783Accrued
      expenses
                                                  
                                                  
                                                  276,107Accrued
      compensation
                                                  
                                                  
                                                  150,000Accrued
      interest
                                                  
                                                  
                                                  373,426Total
      liabilities
                                                  
                                                  
                                                  3,035,627Identifiable
      net assets
                                                  
                                                  $
                                                  (1,980,905
                                                  )




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




The
following pro forma information summarizes the results of operations for the
periods indicated as if the acquisition occurred at December 31, 2007. The pro
forma information is not necessarily indicative of the results that would have
been reported had the transaction actually occurred on December 31, 2007, nor is
it intended to project results of operations for any future period.




F-13




Pro
      Forma
                    
                    Year
      Ended December 31,2009
                    
                    
                    2008Revenues
                    
                    $
                    5,340,707
                    
                    
                    $
                    8,590,266Cost
      of Revenues
                    
                    
                    3,868,835
                    
                    
                    
                    5,756,163Gross
      profit
                    
                    
                    1,471,872
                    
                    
                    
                    2,834,103Selling,
      general and administrative expenses
                    
                    
                    5,014,356
                    
                    
                    
                    5,598,628Operating 
      loss
                    
                    
                    (3,542,484
                    )
                    
                    
                    (2,764,525
                    )Interest
      expense, net
                    
                    
                    (1,104,787
                    )
                    
                    
                    (442,805
                    )Loss
      from continuing operations before income tax provision
                    
                    
                    (4,647,271
                    )
                    
                    
                    (3,207,330
                    )Income
      tax provision
                    
                    
                    (31,008
                    )
                    
                    
                    (13,319
                    )Loss
      from continuing operations
                    
                    
                    (4,678,279
                    )
                    
                    
                    (3,220,649
                    )Income
      from discontinued operations, net of income tax
                    
                    
                    2,661
                    
                    
                    
                    87,309Net
      loss
                    
                    $
                    (4,675,618
                    )
                    
                    $
                    (3,133,340
                    )Diluted
      loss per common share
                    
                    $
                    (0.17
                    )
                    
                    $
                    (0.12
                    )




4)
INVENTORY




Inventory
consisted of the following as of December 31, 2009 and 2008:





2009
                    
                    
                    2008Parts
      and supplies
                    
                    $
                    267,775
                    
                    
                    $
                    161,413Coating
      powders
                    
                    
                    77,204
                    
                    
                    
                    -Finished
      goods
                    
                    
                    6,509
                    
                    
                    
                    -Total
      inventory (a)
                    
                    $
                    351,488
                    
                    
                    $
                    161,413





(a)
Includes inventory of $41,583 and $39,869 at December 31,  2009 and 2008,
respectively, pledged to secure the $400,000 line of credit described in Note
9.





The
Company has determined that a reserve for obsolete, or slow moving, inventory is
not required because the assembly of the spray system and the blending of
powders is done based on actual sales orders and not for the shelf.





5) PROPERTY AND
EQUIPMENT





Property
and equipment, net, consisted of the following as of December31, 2009 and
2008:





Useful
                    Life-
                    Years
                  
                  2009
                  
                  
                  2008Machinery
      and equipment
                  5-10
                  
                  $
                  181,596
                  
                  
                  $
                  62,869Vehicles
                  3-5
                  
                  
                  56,998
                  
                  
                  
                  97,394Office
      equipment
                  3-5
                  
                  
                  24,642
                  
                  
                  
                  -Furniture
      and fixtures
                  5-7
                  
                  
                  17,952
                  
                  
                  
                  5,522Computer
      software
                  5-7
                  
                  
                  27,861
                  
                  
                  
                  -Leasehold
      improvements
                  5
                  
                  
                  112,455
                  
                  
                  
                  -421,504
                  
                  
                  
                  165,785Less
      accumulated depreciation and amortization
                  
                  
                  
                  (246,765
                  )
                  
                  
                  (135,112
                  )Property
      and equipment, net  (a)
                  
                  
                  $
                  174,739
                  
                  
                  $
                  30,673





(a)
Includes property and equipment, net of $9,919 and $18,776 at December 31, 
2009 and 2008, respectively, pledged to secure the $400,000 line of credit
described in Note 9.





Depreciation
and amortization of property and equipment for the years ended December 31, 2009
and 2008 was $29,517 and $14,801, respectively.




F-14




6)
GOODWILL AND OTHER INTANGIBLE ASSETS




Intangible
assets, net, consisted of the following as of December 31, 2009 and
2008:





2009
                                                  
                                                  
                                                  2008Goodwill:Acquisition
      of EIHC (formerly XIOM) on December 7, 2009
                                                  
                                                  $
                                                  7,099,110
                                                  
                                                  
                                                  $
                                                  -Impairment
      recognized on acquisition of EIHC (formerly  XIOM)
                                                  
                                                  $
                                                  (7,099,110
                                                  )
                                                  
                                                  $
                                                  -Net
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -Acquisition
      of Gulf States Chlorinator & Pump Inc.on
      March 1, 2006
                                                  
                                                  
                                                  237,464
                                                  
                                                  
                                                  
                                                  237,464Other
      Intangible Assets:Trade
      name and customer accounts:Acquisition
      of intangible assets of KerriganDupree,
      Inc. on April 17, 2007
                                                  
                                                  
                                                  60,000
                                                  
                                                  
                                                  
                                                  60,000Accumulated
      amortization
                                                  
                                                  
                                                  (16,000
                                                  )
                                                  
                                                  
                                                  (10,000
                                                  )Net
                                                  
                                                  
                                                  44,000
                                                  
                                                  
                                                  
                                                  50,000Patent
      costs:XIOM
      Corp. thermal spray technology
                                                  
                                                  
                                                  7,851
                                                  
                                                  
                                                  
                                                  -Accumulated
      amortization
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -Net
                                                  
                                                  
                                                  7,851
                                                  
                                                  
                                                  
                                                  -Intangible
      assets, net
                                                  
                                                  $
                                                  289,315
                                                  
                                                  
                                                  $
                                                  287,464





Goodwill
is not amortized but is reviewed for impairment at least annually. The trade
name and customer accounts and the patent costs are amortized over their
estimated economic lives of 10 years. Expected future amortization of intangible
assets for the years ending December 31, 2010, 2011, 2012, 2013, and 2014 is
$6,785.





7)
RETAINAGE RECEIVABLE





Retainage
receivable represents the cumulative amount held-back by the customer from each
percentage-of-completion billing pursuant to long-term contracts. Such amounts
are payable to the Company upon the completion of each contract and final
customer approval.





8)
INVESTMENT IN AND ADVANCES TO PUBLICLY TRADED INVESTEE





Investment
in and advances to publicly traded investee, net, consisted of the following as
of December 31, 2009:





Advances
      to Structural Enhancement Technologies Corp., formerlyExtreme Mobile Coatings Worldwide Corp. (“EMWW”), under
      adelinquent
      5% promissory note that was due April 10, 2010as
      extended
                          
                          $
                          158,500Investment
      in EMWW (21% of issued and outstanding shares ofEMWW at December 31, 2009)
                          
                          
                          -Allowance
      for recoverability provided for by XIOM Corp prior to its acquisition by
      the Company
                          
                          
                          (108,500
                          )Net
                          
                          $
                          50,000





F-15


EMWW is a
publicly traded development stage company whose business plan was to establish
franchises to market, use, and sell coating products and equipment licensed from
XIOM. The chairman of the board of directors of EMWW was the chief executive
officer of XIOM to October 30, 2009. The executive vice president (and also a
director and significant stockholder) of EMWW was a director of EIHC from
December 7, 2009 to June 17, 2010 and a corporation controlled by him was a
consultant to XIOM prior to December 7, 2009.





At
December 31, 2009, XIOM owned 451,193 (as adjusted for the 1 for 100 reverse
stock split on 19 May 2010) shares of common stock of EMWW, or 21% of the
2,145,094 post reverse stock split shares of EMWW common stock issued and
outstanding.  At December 31, 2009, EMWW had a stockholders’ deficit of
$1,326,930 and a closing stock price of $1.80 per share (as adjusted for the 1
for 100 reverse stock split on 19 May 2010). It incurred a net loss for the year
ended December 31, 2009 of $966,788, and had cumulative losses of $1,817,353 at
that date. At December 31, 2009, accounts receivable includes $19,501 due from
EMWW.





In its
filings with the Securities and Exchange Commission, EMWW reported that on
February 12, 2010, EMWW issued 110,000 shares of common stock (post reverse
stock split) to EIHC as a principal payment of $55,000 on the Note, and on March
4, 2010, EMWW issued 107,000 shares of common stock (post reverse stock split)
to EIHC as a principal payment of $53,500 on the Note payable to XIOM; however,
neither XIOM nor EIHC has any knowledge of this, has not received any additional
shares from EMWW, nor has released or acknowledged any satisfaction of $108,500
of the principal on the note. Based upon the most recently available public
information, the Executive Vice President of EMWW, who was also a director of
EIHC held approximately 15% of the common stock of EMWW at March 31, 2010. At
June 30, 2010, EMWW had a stockholders’ deficit of $534,154 and a closing stock
price of $0.33 per share. It incurred a loss from operations of $1,460,076 for
the six months ended June 30, 2010. Revenues of EMWW from its inception have
been nominal.





9)
DEBT




Debt
consisted of the following at December 31, 2009 and 2008:




2009
                    
                    
                    2008Equisol:Due
      bank under revolving line of credit, interest at prime  rate plus 1%,
      due in May, 2010 pursuant to annual  ‘clean-up” provision, secured
      by  Equisol assets, right  of offset and personal guaranties
      of  two officers of the  Company and their spousesThe balance
      owing of $400,000 under this line of credit was substantially satisfied by
      cash advances received by it in August 2010 from the Company’s spun-off
      PDIR/ Penn-Del subsidiary for which Equisol executed a $400,000 promissory
      note in favor of PDIR LLC due in 4 equal annual installments of $100,000
      plus accrued interest thereon at a rate of 8% per annum (overdue principal
      at 12% per annum). The Equisol promissory note executed in favor of PDIR
      is secured by all the assets of Equisol, which total $482,961 at December
      31, 2009 (the most recent date for which such information is available at
      the date of issuance of these financial statements).
                    
                    $
                    400,000
                    
                    
                    $
                    400,000




F-16




Due
      another bank under E&I revolving line of credit,  interest at
      6.05% (default rate of 18%) and 7.25%, respectively, due 6/29/10 and
      5/25/09, respectively, secured by accounts receivable of E&I ($0 at
      December 31, 2009 ) and by a right of setoff related to cash held at this
      bank. At 12/31/08 and 12/31/09, this bank held personal guaranties of the
      former owners of  E&I;On February 25, 2010, the remaining balance
      due under this line of credit was paid down to zero by the Company.
       However, the former owners of E&I have retained borrowing
      authority under the line of credit and new borrowings have continued to
      occur since that date.To the date of the issuance of these financial
      statements, known borrowing under the line of credit in E & I’s name
      have been $29,000 has been borrowed, the proceeds of which may be used to
      satisfy the $46,852 listed below in this table as due to the former owners
      at December 31, 2009, in a similar self-reimbursement to that of
      approximately $70,000 made by them from the line in 2008. In March 2010,
      the former owners reimbursed themselves $8,200, of which $3,496 was
      applied to reduce the amount due them by the Company and $4,704
      represented expenses paid claimed by them as reimburseable Company
      expenses. Legal counsel to the Company is not aware of, nor has Company
      management advised them, of any formal litigation that has been commenced
      by the former owners or of claims made against the Company, if any, by the
      former owners or related matters of financial consequence arising out of
      day to day operations of E&I  prior to its cessation in 2010. The
      Company believes its financial exposures concerning the former owners is
      likely limited to the extent of the remainder due of the $46,852.
      Management of the Company has indicated it is legally dissolving E&I
      which has already merged out of existence for income tax purposes.
                
                
                150,000
                
                
                
                140,759Convertible
      debt due related parties and others, interest at 8%, due January 2007
      through October 2010, secured by  all Equisol assets under a lien
      junior to that of the $400,000 bank line of credit loan, convertible into
      Equisol membership units (net of unamortized discounts  of 
      $5,332 and $11,281, respectively).
                
                
                214,254
                
                
                
                238,219Loan
      payable to chief executive officer of  the Company,  interest at
      8%, due on demand .
                
                
                145,581
                
                
                
                145,581Loan payable to
      former owners of E & I, interest at 0%, due on demand.(see the
      related discussion above in this table related to the balance due of
      $150,000 at  December 31, 2009 under the revolving line of credit
      with another bank).
                
                
                46,852
                
                
                
                67,000Vehicle
      loan
                
                
                -
                
                
                
                3,085




F-17




Gulf
      States:SBA
      guaranteed loan payable to financial institution,  interest at prime
      rate plus 2.75%, due in monthly  installments of principal and
      interest of $5,000 with  balance due on May 31, 2016, secured by
      guaranties of Equisol, and two officers of the Company, certain 
       personal property, and certain real property  owned by two
      officers of the Company. The loan   requires, among other
      things, prior lender written  consent concerning transfer or disposal
      of Company  assets, payment of distributions, or changes in ownership
      structure during the period the loan is outstanding
                      
                      
                      289,446
                      
                      
                      
                      334,229Vehicle
      loans
                      
                      
                      2,259
                      
                      
                      
                      9,719EIHC:Loan
      payable to financial institution for insurance   premium
      financing, interest at 10.6%, due in 7 monthly  installments of
      principal and interest of $1,311 from     March 2010 to
      September 2010
                      
                      
                      8,707
                      
                      
                      
                      -XIOM:Convertible
      notes sold to investors in 2007, interest at 7% (default rate of 15%),
      originally due April 2012 (but  acceleratable since required
      Registration Statement was  not declared effective by June 2008, one
      year from the  final closing date of the related private
      offering),  convertible at a conversion price of $1.50 per share
      (a)
                      
                      
                      940,000
                      
                      
                      
                      -Convertible
      note sold to investor in April 2008,  interest at 7%, due March 2010,
      convertible at a conversion price of $1.50 per share – in technical
      default
                      
                      
                      500,000
                      
                      
                      
                      -Convertible
      notes sold to investors from June 2009 to August 2009, interest at 100%,
      due from December 2009 to February 2010, convertible at a conversion price
      equal to 75% of the 30 day  moving average of the closing price of
      the Company’s common stock immediately prior to such conversion – in
      technical   default
                      
                      
                      350,000
                      
                      
                      
                      -Loan
      payable to former chief executive officer of XIOM, interest at 0%, due on
      demand
                      
                      
                      29,311
                      
                      
                      
                      -Total
                      
                      
                      3,076,410
                      
                      
                      
                      1,338,592Less
      current portion of debt
                      
                      
                      (2,830,789
                      )
                      
                      
                      (1,050,417
                      )Long
      term portion of debt
                      
                      $
                      245,621
                      
                      
                      $
                      288,175





(a) In
December 2009, XIOM received a notice from holders of $820,000 of the
convertible notes sold to investors in 2007 indicating that XIOM was in default
and demanding payment of the face amount and all accrued and unpaid
interest.




F-18


Maturities
of the debt as of December 31, 2009 for the next five years and thereafter are
as follows:




Year
      ending
                        December 31,2010
                      
                      $
                      2,830,7892011
                      
                      
                      46,5372012
                      
                      
                      49,3982013
                      
                      
                      52,4452014
                      
                      
                      55,680Thereafter
                      
                      
                      41,561Total
                      
                      $
                      3,076,410




Accrued
interest on debt consisted of the following at December 31, 2009 and
2008:




2009
                          
                          
                          2008XIOM
      convertible notes
                          
                          $
                          407,013
                          
                          
                          $
                          -Equisol
      loan payable to chief executive officerof
      the Company
                          
                          
                          66,269
                          
                          
                          
                          66,269Equisol
      convertible debt
                          
                          
                          22,070
                          
                          
                          
                          25,986Total
                          
                          $
                          495,352
                          
                          
                          $
                          92,255





Interest
expense incurred for the years ended December 31, 2009 and 2008 is summarized as
follows:





2009
                    
                    
                    2008Equisol
                    
                    $
                    51,075
                    
                    
                    $
                    75,702Gulf
      States
                    
                    
                    21,219
                    
                    
                    
                    30,619XIOM
      convertible notes
                    
                    
                    33,587
                    
                    
                    
                    -Total
                    
                    $
                    105,881
                    
                    
                    $
                    106,321





10)
COMMON STOCK





As
described inNote 1, the acquisition of Equisol on December 7, 2009 was accounted
for as a reverse merger of EIHC into Equisol. Accordingly, the accompanying
financial statements reflect issued shares and shares committed to be issued at
December 31, 2009 and prior to the reverse merger based on the number of shares
issued (18,563,693 shares) and committed to be issued (8,084,942 shares), or
26,648,635 shares total, to Equisol members on December 7, 2009 pursuant to the
reverse merger and exclude EIHC (formerly XIOM Corp.) equity transactions prior
to the reverse merger on December 7, 2009. The fair value of the issued shares
(23,247,407 shares) and shares committed to be issued (1,125,000 shares),
or24,372,407 shares total, relating to the shares retained by EIHC (formerly
XIOM Corp.) shareholders pursuant to the reverse merger on December 7, 2009 has
been reflected as consideration for the reverse purchase of XIOM at December 7,
2009 (see Note 3).





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





Issued
      and committed to be issued shares at September 30, 2009
                  
                  
                  18,722,357Shares
      issued for services by XIOM former chief executive officer andconsultants
      coincident to completing reverse merger with an estimatedvalue
      of $748,516 based on the stock trading price
                  
                  
                  2,250,050Shares
      sold at $0.20 per share to a convertible note holder of  XIOM
      (a)
                  
                  
                  2,300,000Shares
      sold at $0.25 per share (b)
                  
                  
                  1,100,000Issued
      and committed to be issued shares at December 7, 2009
                  
                  
                  24,372,407





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





At
December 31, 2009, the XIOM convertible note holder holding the 2,300,000 shares
also holds $125,000 of notes sold to investors from June 2009 to August 2009
that were due between December 2009 and February 2010, with a conversion price
equal to 75% of the 30 day moving average of the closing price of the Company’s
common stock prior to such conversion. These convertible notes entitled him to
receive 457,038 shares of common stock if the conversion had taken place at
December 31, 2009.





F-19


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





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





Date deposited into
                    Escrow
                  
                  Shares of
                    Common
                    Stock Sold at
                    $.25
                  
                  
                  Gross
                    Proceeds
                    of the
                    Offering
                  
                  
                  Offering
                    Costs
                  
                  
                  Net
                    ProceedsPrior
      to  December 7, 2009
                  
                  
                  1,100,000
                  
                  
                  $
                  275,000
                  
                  
                  $
                  6,025
                  
                  
                  $
                  268,975From
      December 7, 2009 to December 31, 2009
                  
                  
                  400,000
                  
                  
                  
                  100,000
                  
                  
                  
                  39,650
                  
                  
                  
                  60,350Through
      December 31, 2009
                  
                  
                  1,500,000
                  
                  
                  
                  375,000
                  
                  
                  
                  45,675
                  
                  
                  
                  329,325January
      1, 2010 to February 18, 2010
                  
                  
                  440,000
                  
                  
                  
                  110,000
                  
                  
                  
                  10
                  
                  
                  
                  109,990Total
                  
                  
                  1,940,000
                  
                  
                  $
                  485,000
                  
                  
                  $
                  45,685
                  
                  
                  $
                  439,315





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





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




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





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





F-20


Of the
9,609,942 shares committed to be issued at December 31, 2009, 1,525,000 shares
were issued in March 2010. The remaining 8,084,942 shares committed to be issued
will be issued once the Company increases its authorized number of shares of
common stock.





11)
STOCK OPTIONS AND COMMON STOCK PURCHASE WARRANTS





A summary
of stock option and warrant activity for the years ended December 31, 2008 and
2009 follows:





Common Shares EquivalentStock Options
                    
                    
                    WarrantsOutstanding
      at December 31, 2007
                    
                    
                    -
                    
                    
                    
                    -Granted
      and issued
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    -
                    
                    
                    
                    -Forfeited/
      expired/ cancelled
                    
                    
                    -
                    
                    
                    
                    -Outstanding
      at December 31,  2008
                    
                    
                    -
                    
                    
                    
                    -Prior
      XIOM grants honored in connection with reverseMerger with Equisol on December 7, 2009
                    
                    
                    6,186,500
                    
                    
                    
                    3,253,916Granted
      and issued (see Note 11)
                    
                    
                    -
                    
                    
                    
                    400,000Exercised
                    
                    
                    -
                    
                    
                    
                    -Forfeited/
      expired/ cancelled
                    
                    
                    -
                    
                    
                    
                    -Outstanding
      at December 31, 2009
                    
                    
                    6,186,500
                    
                    
                    
                    3,653,916




Stock
options outstanding at December 31, 2009 follow:





Granted in
                            Year Ended
                          
                          Number
                            Outstanding
                          
                          
                          Exercise
                          
                          ExpirationDecember 31,
                          
                          and Exercisable
                          
                          
                          Price
                          
                          Date2005
                          
                          
                          67,500
                          
                          
                          $
                          0.25
                          
                          September
      30, 20102006
                          
                          
                          214,000
                          
                          
                          $
                          0.50
                          
                          February
      28. 20112006
                          
                          
                          350,000
                          
                          
                          $
                          0.58
                          
                          October
      14, 20112007
                          
                          
                          250,000
                          
                          
                          $
                          0.42
                          
                          July
      5, 20122007
                          
                          
                          300,000
                          
                          
                          $
                          0.42
                          
                          August
      14, 20122007
                          
                          
                          30,000
                          
                          
                          $
                          1.25
                          
                          August
      30, 20122007
                          
                          
                          525,000
                          
                          
                          $
                          0.50
                          
                          October
      15, 20122008
                          
                          
                          300,000
                          
                          
                          $
                          1.05
                          
                          February
      19, 20132008
                          
                          
                          500,000
                          
                          
                          $
                          0.42
                          
                          February
      29, 20132009
                          
                          
                          1,500,000
                          
                          
                          $
                          0.25
                          
                          February
      27, 20142009
                          
                          
                          750,000
                          
                          
                          $
                          0.50
                          
                          March
      23, 20142009
                          
                          
                          500,000
                          
                          
                          $
                          0.75
                          
                          March
      23, 20142009
                          
                          
                          900,000
                          
                          
                          $
                          0.05
                          
                          May
      26, 2014Total
                          
                          
                          6,186,500





F-21


Warrants
outstanding at December 31, 2009 follow:





Issued in Year Ended
                  
                  Number Outstanding
                  
                  
                  Exercise
                  
                  ExpirationDecember 31,
                  
                  and Exercisable
                  
                  
                  Price
                  
                  Date2007
                  
                  
                  666,666
                  
                  
                  $
                  2.00
                  
                  June
      20122007
                  
                  
                  666,666
                  
                  
                  $
                  2.50
                  
                  June
      20122007
                  
                  
                  154,667
                  
                  
                  $
                  1.00
                  
                  June
      20122007
                  
                  
                  154,667
                  
                  
                  $
                  1.25
                  
                  June
      20122008
                  
                  
                  250,000
                  
                  
                  $
                  1.50
                  
                  March
      20132008
                  
                  
                  250,000
                  
                  
                  $
                  1.80
                  
                  March
      20132008
                  
                  
                  6,250
                  
                  
                  $
                  2.00
                  
                  March
      20132008
                  
                  
                  5,000
                  
                  
                  $
                  2.50
                  
                  March
      20132009
                  
                  
                  1,100,000
                  
                  
                  $
                  0.75
                  
                  December
      31, 20122009
                  
                  
                  400,000
                  
                  
                  $
                  0.75
                  
                  December
      31, 2012Total
                  
                  
                  3,653,916





12)
INCOME TAXES





For 2008
and prior years, Equisol, GSCP, XIOM, and PDIR have filed separate federal and
state income tax returns; returns for 2009 have not yet been filed. Equisol and
PDIR have filed their returns as partnerships and as such their federal taxable
income (loss) has been allocated and taxed to their members and were not taxable
to Equisol and PDIR. For income taxes, GSCP has used February 28 as its yearend
and XIOM has used September 30 as its yearend.





For the
years ended December 31, 2009 and 2008, the income tax provision consisted
of:





2009
                  
                  
                  2008GSCP
      - Federal income tax
                  
                  $
                  26,343
                  
                  
                  $
                  6,725GSCP
      – State income tax
                  
                  
                  4,375
                  
                  
                  
                  2,153Equisol
      – State income tax
                  
                  
                  290
                  
                  
                  
                  4,441Total
                  
                  $
                  31,008
                  
                  
                  $
                  13,319





For the
years ended December 31, 2009 and 2008, the income tax provision differed from
the amount computed by applying the statutory United States federal income tax
rate of 35% to income (loss) from continuing operations before income tax
provision. The sources of the difference follow:





2009
                        
                        
                        2008Expected
      tax at 35%
                        
                        $
                        (2,729,478
                        )
                        
                        $
                        (58,823
                        )Nondeductible
      impairment of  goodwill
                        
                        
                        2,484,689
                        
                        
                        
                        -Tax
      effect of Equisol taxation as apartnership
                        
                        
                        250,756
                        
                        
                        
                        65,548Change
      in EIHC and XIOM valuationallowance
                        
                        
                        20,376
                        
                        
                        
                        -State
      income tax
                        
                        
                        4,665
                        
                        
                        
                        6,594Actual
      income tax provision
                        
                        $
                        31,008
                        
                        
                        $
                        13,319





As of
December 31, 2009, XIOM had net operating loss carryforwards of approximately
$6,000,000, which expire at various dates through 2029.





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





At
December 31, 2009, the Company maintained a full valuation allowance against the
gross deferred tax asset arising from the net operating carryforwards 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.





F-22


At
December 31, 2009, the net deferred tax asset consists of:




Deferred
      tax asset relating to netoperating
      loss carry forwards of XIOM
                    
                    $
                    2,100,000Valuation
      Allowance
                    
                    
                    (2,100,000
                    )Deferred
      tax asset, net
                    
                    $
                    -




13)
COMMITMENTS AND CONTINGENCES




LEASES





The
Company’s subsidiaries lease office, manufacturing and warehouse space pursuant
to various leases on a month-to-month basis. Rent expense for 2009 and 2008 was
approximately $96,525 and $87,569, respectively.





On
January 13, 2010, GSCP executed a lease agreement for office and warehouse space
in Baton Rouge, Louisiana for a term of five years from February 1, 2010 to
January 31, 2015 at a base rent of $1,950 per month. Under the lease agreement,
GSCP has an option to renew the lease for two additional terms of three years
each at base rent plus 4% increases per year.





EMPLOYMENT
AGREEMENTS





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





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





The
agreement with EIHC’s chief executive officer has a term of two years and
provides for a base salary of $175,000 per year, annual stock grants equal to
$100,000, a fixed bonus of no less than $175,000 per year, and two fully vested
exercisable stock options to purchase 10% of the then issued and outstanding
common stock of the Company on each of the two dates that the Company attains
annual revenues of $20,000,000 and $30,000,000 (at an exercise price equal to
the market price on the date of the grant). The agreement provides for fringe
benefits such as Company paid life insurance and 401(K) plan participation. It
also contains provisions related to termination of the executive, whom may be
entitled to a cash payment over 24 months equal to twice his base pay under
certain circumstances.





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





The
agreement with XIOM’s chief executive officer has a term of three years and
provides for a base salary of $120,000 per year, annual stock grants equal to
$30,000, a bonus of no less than 1% of XIOM’s net income per year, and signing
grants of 250,000 stock options (to vest 20% per year of service), and 500,000
additional stock options (to vest 20% each year that XIOM gross revenues exceed
$10,000,000). The agreement also provides for certain fringe benefits. It also
contains provisions related to termination of the executive, whom may be
entitled to receive a quarter of his base compensation under certain
circumstances.





F-23


LEGAL
PROCEEDINGS





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





14)
GOING CONCERN





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As shown in the financial statements as of
December 31, 2009, the Company has a total Stockholders’ Deficit of $3,252,204
and negative working capital of $3,583,933. Additionally, the Company incurred a
Net Loss of $7,692,543 for the year ended December 31, 2009.  These factors
raise substantial doubt about the Company’s ability to continue as a going
concern.





The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence. The Company will continue seeking to raise money
through a series of equity and debt transactions in 2010.





15)
DISCONTINUED OPERATION





As
described in Note 1, Equisol spun off its one of its subsidiaries to Equisol’s
members prior to the merger with EIHC on December 7, 2009. Accordingly, this
operation has been presented as a discontinued operation in the accompanying
consolidated financial statements for the period January 1, 2008 to December 7,
2009.




For the
years ended December 31, 2009 and 2008, income (loss) from discontinued
operation consisted of:




2009
                  
                  
                  2008Revenues
                  
                  $
                  1,689,001
                  
                  
                  $
                  1,984,457Cost
      of revenues
                  
                  
                  (841,208
                  )
                  
                  
                  (983,325
                  )Gross
      profit
                  
                  
                  847,793
                  
                  
                  
                  1,001,132Selling,
      general and administrative expenses
                  
                  
                  (851,685
                  )
                  
                  
                  (890,257
                  )Operating
      income
                  
                  
                  (3,892
                  )
                  
                  
                  110,875Interest
      expense
                  
                  
                  (1,364
                  )
                  
                  
                  (25,466
                  )Income
      (loss) before income tax provision
                  
                  
                  (5,256
                  )
                  
                  
                  85,409Income
      tax provision
                  
                  -
                  
                  
                  
                  1,900Income
      (loss)  from discontinued operation
                  
                  $
                  (5,256
                  )
                  
                  $
                  87,309




F-24


The
assets and liabilities of the company spun off at December 7, 2009 (date of
spinoff) and December 31, 2008 consisted of:




December 7,
                    
                    
                    December 31,2009
                    
                    
                    2008AssetsCash
      and cash equivalents
                    
                    $
                    18,947
                    
                    
                    $
                    16,541Accounts
      receivable, net
                    
                    
                    538,358
                    
                    
                    
                    422,717Inventory
                    
                    
                    15,972
                    
                    
                    
                    15,972Prepaid
      expenses and other current assets
                    
                    
                    5,098
                    
                    
                    
                    15,199Total
      current assets
                    
                    
                    578,375
                    
                    
                    
                    470,429Property
      and equipment, net
                    
                    
                    3,259
                    
                    
                    
                    4,711Intangible
      assets, net
                    
                    
                    32,666
                    
                    
                    
                    35,333Total
      assets
                    
                    $
                    614,300
                    
                    
                    $
                    510,473LiabilitiesCurrent
      portion of debt
                    
                    $
                    7,500
                    
                    
                    $
                    156,667Accounts
      payable
                    
                    
                    257,855
                    
                    
                    
                    134,722Accrued
      expenses
                    
                    
                    23,407
                    
                    
                    
                    38,290Total
      liabilities
                    
                    $
                    288,762
                    
                    
                    $
                    329,679Net
      Assets
                    
                    $
                    325,538
                    
                    
                    $
                    180,794




Net
assets of the company spun off changed from December 31, 2008 to December 7,
2009 as follows:




Net
      assets, December 31, 2008
                    
                    $
                    180,794Transfer
      of debt to Equisol simultaneous withconversion
      of debt into 483,688 shares ofEIHC
      common stock on December 7, 2009 (note 10)
                    
                    
                    150,000Net
      loss
                    
                    
                    (5,256
                    )Net
      assets, December 7, 2009
                    
                    $
                    325,538




16)
BUSINESS SEGMENTS AND MAJOR CUSTOMERS




EIHC is a
holding company that operates through its wholly owned subsidiaries. The Company
operates in two business segments: (1) water treatment systems equipment sales
and services (conducted through Equisol) and (2) thermal spray coating systems
equipment (conducted through XIOM since December 7, 2009).




Summarized
financial information by business segment for the years ended December 31, 2009
and 2008 is as follows:




2009
                    
                    
                    2008Revenues:Water
      treatment systems equipment sales and services
                    
                    $
                    4,613,191
                    
                    
                    $
                    6,236,258Thermal
      spray coating systems equipment
                    
                    
                    43,150
                    
                    
                    –Total
                    
                    $
                    4,656,341
                    
                    
                    $
                    6,236,258Operating
      Loss:Water
      treatment systems equipment sales and services
                    
                    $
                    (569,948
                    )
                    
                    $
                    (62,112
                    )Thermal
      spray coating systems equipment
                    
                    
                    (23,802
                    )
                    
                    –Total
                    
                    $
                    (593,750
                    )
                    
                    $
                    (62,112
                    )Identifiable
      Assets:Water
      treatment systems equipment sales and services
                    
                    $
                    911,686
                    
                    
                    $
                    1,764,677Thermal
      spray coating systems equipment
                    
                    
                    549,227
                    
                    
                    –EIHC
                    
                    
                    234,238
                    
                    
                    –Total
                    
                    $
                    1,695,151
                    
                    
                    $
                    1,764,677Capital
      Expenditures:Water
      treatment systems equipment sales and services
                    
                    $
                    -
                    
                    
                    $
                    12,107Thermal
      spray coating systems equipment
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    $
                    -
                    
                    
                    $
                    12,107Depreciation
      and Amortization:Water
      treatment systems equipment sales and services
                    
                    $
                    33,074
                    
                    
                    $
                    20,801Thermal
      spray coatings systems equipment
                    
                    
                    2,443
                    
                    
                    
                    -Total
                    
                    $
                    35,517
                    
                    
                    $
                    20,801




F-25




The
thermal spray coatings systems equipment business segment represents the results
for XIOM since December 7, 2009 (date of the reverse merger).




Substantially
all revenues for the years ended December 31, 2009 and 2008 were derived from
customers located in the United States.




In 2008,
one customer accounted for 10% of net sales of the water treatment systems
equipment sales and services business segment.




17)
SUBSEQUENT EVENTS




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




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




On March
30, 2010, the Company issued 250,000 shares of its common stock to the former
chief executive of XIOM (to October 31, 2009) for services
rendered.




On
September 18, 2010 the Company issued a total of 2,523,886 shares of its common
stock to




SHARES
                                      
                                      
                                      FAIR VALUEConsultants
      for services rendered
                                      
                                      
                                      400,000
                                      
                                      
                                      $
                                      50,500Executives
      pursuant to employmentAgreements
      (See Note 13)
                                      
                                      
                                      2,123,886
                                      
                                      
                                      
                                      129,8382,523,886
                                      
                                      
                                      $
                                      180,338




F-26


Item 9.CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE





None.





Item
9A(T).CONTROLS AND PROCEDURES





Disclosure
Controls and Procedures





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




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




·      pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of EIHC;




·      provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally accepted
accounting principles, and that receipts and expenditures of EIHC are being made
only in accordance with authorizations of management and directors of EIHC;
and




·      provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of EIHC’s assets that could have a material
effect on the financial statements.





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





Management,
including our then principal executive officer and principal financial officer,
assessed the effectiveness of the Company’s internal control over financial
reporting as of September 30, 2008.  In making this assessment,
management used the criteria set forth by [the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated
Framework.  Based on our assessment as further discussed in the
following paragraph, management believes that the Company maintained ineffective
internal control over financial reporting as of September 30, 2008, December 31,
2008, and December 31, 2009.




Current
management and the officers of the Company concluded, based upon extensive
restatements of the consolidated financial statements for both the year ended
December 31, 2009 and 2008 upon completion of audits by PCAOB Registered
independent auditor,  that our disclosure controls and procedures
needed improvement and were ineffective to ensure that information required to
be disclosed by our company in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in Commission rules and
forms.  Additionally, management and the chief executive officer/chief
financial officer concluded that our company's disclosure controls and
procedures needed improvement to ensure that the information required to be
disclosed by our company in the reports that we file or submit under the
Exchange Act is accumulated and communicated to management and its chief
executive officer/chief financial officer to allow timely decisions about
required disclosure.


30





As a
result, during the quarter ended December 31, 2008, and subsequent to December
31, 2009, we instituted additional levels of review and have retained the
services of additional financial professionals with the requisite background and
experience that will coordinate and be responsible for our disclosure controls
and procedures.





Changes
in Internal Controls over Financial Reporting





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





Item
9b. OTHER INFORMATION





None





Part
III





Item 9.DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE.





The
directors and officers of the Company are listed below with information about
their respective backgrounds.  Each Director is elected to serve a one
year term, until the next annual meeting of the shareholders or until their
successor is elected (or appointed) and qualified.







Effective
as of December 7, 2009, the following individuals were elected to the Board of
Directors of the Company:





Name
                        
                        Age
                        
                        PositionMichael
      D. Parrish
                        
                        46
                        
                        Chairman
      of the Board of Directors/CEO, PresidentGregory
      N. Moore
                        
                        59
                        
                        Director
      and Chairman of the Audit Committee of the Board of
    DirectorsAndrew
      B. Mazzone
                        
                        68
                        
                        DirectorJames
      W. Zimbler
                        
                        44
                        
                        Secretary/DirectorKurt
      M. Given
                        
                        45
                        
                        Treasurer/Director




Mr.
Mazzone resigned as a director on February 26, 2010 and was replaced by James K.
Weber, the president of the Company’s XIOM subsidiary.




Mr.
Zimbler resigned as a director on June 17, 2010.




Mr. Moore
resigned as a director on September 2, 2010


31




Michael
D. Parrish


In
connection with the Acquisition, the Company entered into an Employment
Agreement dated as of December 7, 2009 (the “Employment Agreement”) with Michael
D. Parrish, the President and CEO of Equisol and a Seller under the Purchase
Agreement.  Under the terms of the Employment Agreement, Mr. Parrish
will be employed as the President and CEO of the Company for an initial term of
two (2) years, which term may be extended for an additional
one-year.  The initial term of employment commenced on the closing
date of the Acquisition.  Mr. Parrish will also serve as the Chairman
of the Board of Directors of the Company.  Mr. Parrish will have an
annual base salary of $175, 000, and he is also eligible to receive
discretionary performance bonuses.





Mr.
Parrish has extensive operational and general management experience; his focus
is on financial performance and strategic alliances.  Mr. Parrish has
over 24 years of leadership and finance experience in a variety of global
firms.  Prior to Equisol, Mr. Parrish held various executive positions
in several General Electric Companies where he served in positions such as
General Manager for global logistics and services for GE’s Water business, and,
earlier, as Managing Director for GE Capital specializing in ecommerce, six
sigma, and productivity of several of GE’s equipment management
groups.  Prior to GE, Mr. Parrish served for 14 years active duty in
the U.S. Army where he held various leadership positions of increasing
responsibility as an Army Aviator culminating as a member of the Army
Acquisition Corps.  Mr. Parrish has a Bachelor’s degree in Engineering
from the U.S. Military Academy at West Point as well as a Masters Degree in
Astronautical Engineering from Stanford University and an MBA with honors from
the Wharton School at the University of Pennsylvania.   He is the
current President of the West Point Society of Philadelphia and serves on the
boards of the USO of SE PA/NJ and the Delaware Valley Industrial Resources
Council.





Gregory
N. Moore


Gregory
N. Moore, has over 25 years of senior management experience in major
multi-national companies and extensive international experience in major
worldwide markets.  He served as the Senior Vice President and
Controller of YUM! Brands, Inc. from 2003 to 2005.  Prior thereto, Mr.
Moore was the Vice President and General Auditor of Yum from 1997 to
2003.  Before that, he was with PepsiCo, Inc. and held the position of
Vice President and Controller of Taco Bell and Controller of PepsiCo Wines and
Spirits International.  Since retiring, he has been a frequent speaker
and lecturer and currently sits on two boards:  Texas Roadhouse, Inc.
(NASDAQ) serving as Chairman of the Audit Committee and Nominating &
Corporate Governance Committee, and as a member of the Compensation Committee;
and 3 Day Blinds, a privately held company owned by two private equity firms,
for which he chairs the Audit Committee.





James W.
Zimbler


James W.
Zimbler, has been a principal of Keystone Capital Resources, LLC, since its
inception in March 2004.  Keystone is involved as a consultant in the
mergers and acquisitions of public companies and consulting for private
companies that wish to access the public markets.  Prior to becoming a
founding member of Keystone, he was involved in consulting for capital raising,
re-capitalization and mergers and acquisitions for various
clients.  Mr. Zimbler was one of the initial shareholders in
Accountabilities, Inc., f/k/a Human Trans Services Holding Corp (“ACBT”).   Mr.
Zimbler has recently focused his energies in the field of turnarounds of small
emerging private and public companies.  He has served on the Board of
Directors and/or Officer of several companies since 2000.





Kurt M.
Given


Kurt M.
Given, is responsible for the day-to-day business functions and operations of
Equisol, including marketing, technology, and linking together sales,
administration, and customer relationships. With 20 years of water treatment
experience at GE Betz, he has held positions in engineering and management for
both the chemical and feed equipment product lines. From 1999 to 2002, he was
group Leader and Product Manager for the Equipment team, overseeing all
activities including pricing, marketing, profitability, capital equipment,
contracts and product management. He has a Bachelor of Science degree in
Chemical Engineering from Pennsylvania State University and holds a patent for
dust control foam generation.





Code
of Ethics





Our board
of directors had adopted a code of ethics applicable to persons at our company
who are responsible for financial management. A copy of the code of ethics has
been previously filed as an attachment to the Annual Report for September 30,
2007 as Exhibit 14.1.


32





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.





Item 11.EXECUTIVE
COMPENSATION





For the
three months ended December 31, 2009, the Officers/Directors have not been
compensated.




Summary
Compensation Table


Nameand
                                                        PrincipalPosition
                                                      
                                                      Year
                                                      
                                                      Salary($)
                                                      
                                                      
                                                      Bonus($)
                                                      
                                                      
                                                      Stock
                                                        Awards($)
                                                      
                                                      
                                                      Option
                                                        Awards($)
                                                      
                                                      
                                                      Non-equity
                                                        IncentivePlan
                                                        Compensation
                                                      
                                                      
                                                      Nonqualified
                                                        Deferred
                                                        Compensation
                                                        Earnings($)
                                                      
                                                      
                                                      AllOther
                                                        Compensation
                                                        ($)
                                                      
                                                      
                                                      Total($)Michael
      D.
                                                      
                                                      2009
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-Parrish,
      President,Chairman
      & CEO
                                                      
                                                      2008
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-James
      K. Weber,
                                                      
                                                      2009
                                                      
                                                      
                                                      -0-President,
      XIOMCorp.
                                                      
                                                      2008
                                                      
                                                      
                                                      -0-Kurt
      M. Given,
                                                      
                                                      2009
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-President,
      EquisolLLC
                                                      
                                                      2008
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-
                                                      
                                                      
                                                      
                                                      -0-





The
following table details options granted to each executive officer in the last
fiscal year ended September 30, 2009:




Outstanding
Equity Awards at Fiscal Year-End




OPTIONAWARDSName
                                                          
                                                          Numberof
                                                            Securities
                                                            Underlying
                                                            Unexercised
                                                            Options(#)
                                                            Exercisable
                                                          
                                                          Numberof
                                                            Securities
                                                            Underlying
                                                            Unexercised
                                                            Options(#)
                                                            Unexercisable
                                                          
                                                          EquityIncentive
                                                            PlanAwards:
                                                            Numberof
                                                            Securities
                                                            Underlying
                                                            Unexercised
                                                            UnearnedOptions
                                                          
                                                          OptionExercise
                                                            Price($)
                                                          
                                                          OptionExpiration
                                                            DateMichael
      D. Parrish, President, Chairman & CEOAndrew
      B. Mazzone, President, XIOM Corp.Kurt
      M. Given, President, Equisol LLC




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.


33





Director
and Officer Insurance:





The
Company has directors and officers (“D & O”) liability
insurance.




Stock
Option Plan




The
Company plans to submit an Equity Incentive Plan to a vote of shareholders
during 2010.




Item 12.SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS





The
following table sets forth information as of September 21, 2010 with respect to
the beneficial ownership of the 46,946,195 outstanding shares of the Company's
Common Stock by (i) each person known by the Company to beneficially own five
percent or more of the outstanding shares; (ii) the Company's officers and
directors; and (iii) the Company's officers and directors as a
group.  A person is deemed to be a beneficial owner of any securities
of which that person has the right to acquire beneficial ownership within sixty
(60) days




Percentage ofIdentity of Shareholder
                                                                                      
                                                                                      Number of Shares
                                                                                      
                                                                                      Beneficial OwnershipMichael
      D. Parrish
                                                                                      
                                                                                      
                                                                                      10,572,833
                                                                                      
                                                                                      22.52
                                                                                      %200
      Barr Harbor Drive, Ste 400West
      Conshohocken, PA 19428Chairman
      and CEOKurt
      M. Given (2)
                                                                                      
                                                                                      
                                                                                      6,521,116
                                                                                      
                                                                                      13.89
                                                                                      %200
      Barr Harbor Drive, Ste 400West
      Conshohocken, PA 19428Executive
      VP and DirectorJames
      K. Weber
                                                                                      
                                                                                      
                                                                                      347,461
                                                                                      
                                                                                      *114
      N. Clinton AvenueBay
      Shore, NY 11706DirectorMartin
      Hodus, Shareholder
                                                                                      
                                                                                      
                                                                                      2,525,000
                                                                                      
                                                                                      5.38
                                                                                      %271-19E
      Grand Central ParkwayFloral
      Park, NY 11005____________________________Anderw
      B.Mazzone (3)
                                                                                      
                                                                                      
                                                                                      1,413,832
                                                                                      
                                                                                      *513
      Dryden StreetWestbury,
      New York 11590-4408Former
      President of Xiom, Inc.All
      Officers and Directors as
                                                                                      
                                                                                      
                                                                                      17,441,410
                                                                                      
                                                                                      37.15
                                                                                      %A
      Group (5 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
      483,688 owned by a member of his
family


(3)
            Including
      430,277 owned by a member of his
family


34





Item
13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE.





Transactions
Between Us and Our Affiliates





Director
Independence





One of
our current directors, Mr. Gregory Moore, is considered to be independent at
this time.





Item
14.PRINCIPAL ACCOUNTANT FEES AND SERVICES





Michael
T. Studer, CPA, P.C. as our independent accountants, audited our financial
statements for the year ending December 31, 2009 and for the predecessor company
for the year ended September 30, 2009, and performed reviews of our financial
statements included in our Forms 10-Q during our fiscal year ended September 30,
2009.





Audit Fees: The aggregate
fees billed byMichael T. Studer, CPA, P.C. during the fiscal years ended
September 30, 2009 and 2008 for professional services for the audit of our
financial statements and the review of financial statements included in our
Forms 10-Q were $27,500 and $32,500, respectively.For the fiscal years ended
December 31, 2009 and 2008, we were billed $60,000 in fees for the audit of our
financial statements.





Audit-Related Fees: Michael
T. Studer, CPA, P.C. did not provide or bill for, and was not paid for, any
audit-related fees in the fiscal years ended December 31, 2009 and
2008.





Tax Fees: Michael T. Studer,
CPA, P.C. did not provide or bill for, and was not paid for, any audit-related
fees in the fiscal years ended December 31, 2009 and 2008.





All Other Fees: Michael T.
Studer, CPA, P.C. did not provide or bill for, and was not paid for, any other
services in the fiscal years ended December 31, 2009 and 2008.





The Company’s Board of Directors has
annually reviewed and approved the engagement of the Company’s auditors and
approved in advance the fee arrangements with regard to audit services and
reviews of financial statements included in the Company’s Forms 10-Q, along with
audit-related fees and tax fees. Substantially all such fees were approved in
advance for 2009 and 2008.




PART
IV





Item
15.  EXHIBITS





Index
to Exhibits:





SEC REFERENCENUMBER
            
            TITLE
      OF DOCUMENT31.1
            
            Certification
      of President Officer pursuant to 18 U.S.C. Section 1350, as adopted,
      Pursuant to section 906 of the Sarbanes-Oxley act of
      2002  (1)32.1
            
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted,
      Pursuant to section 906 of the Sarbanes-Oxley act of
      2002  (1)





(1)      Filed
herewith.





Reports
on Form 8-K:





None.


35





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 September 23, 2010.





ENVIRONMENTAL
      INFRASTRUCTURE
                HOLDINGS
      CORP.By:
              /s/
      Michael D. ParrishMichael
      D. Parrish, President,Chairman and
CEO





Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been
signed by the following persons in the capacities indicated:





Signature
              
              Title
              
              Date/s/
      Michael D. Parrish
              
              President,
      Principal
              
              September
      23, 2010Michael
      D. Parrish
              
              Executiveand
      Accounting Officer andDirector/s/
      James K. Weber
              
              Director
              
              September
      23, 2010James
      K. Weber/s/
      Kurt M. Given
              
              Director
              
              September
      23, 2010Kurt
      M. Given


36