SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





For the Quarterly period ended March 31, 2011





TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934





Commission File No. 0-52631





ENERGY HOLDINGS INTERNATIONAL, INC.


(Exact Name of Registrant as specified in its charter)





Nevada
52-2404983(State or other jurisdiction
(IRS Employer File Number)of incorporation)





12012 Wickchester Lane, Suite 150


Houston, TX 77079


(Address of principal executive offices)  (zip code)





(561) 400-1050


(Registrant's telephone number, including area code)





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





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(Section 232.405 of this chapter) during the preceding 12 months(or such shorter period that the registrant was required to submit and post such files. Yes [] No [X]





Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “small 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 Exchange Act)  Yes []    No [X]





The number of shares outstanding of the Registrant's common stock, as of the latest practicable date: May 6, 2011 was 31,612,109.







FORM 10-Q


Energy Holdings International, Inc.








TABLE OF CONTENTS









PART I.  FINANCIAL INFORMATION
3ITEM 1.  FINANCIAL STATEMENTS
3ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
11ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
13ITEM 4. CONTROLS AND PROCEDURES
13PART II.  OTHER INFORMATION
14ITEM 1.  LEGAL PROCEEDINGS
14ITEM 1A. RISK FACTORS
14ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
17ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
17ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
17ITEM 5.  OTHER INFORMATION
17ITEM 6.  EXHIBITS
18SIGNATURES
19







- 2 -







PART I.  FINANCIAL INFORMATION





References in this document to "us," "we," or "Company" refer to ENERGY HOLDINGS INTERNATIONAL, INC. and its subsidiary.




ITEM 1.  FINANCIAL STATEMENTS





ENERGY HOLDINGS INTERNATIONAL, INC.


CONSOLIDATED BALANCE SHEETS







March 31, 2011 (Unaudited)


June 30, 2010ASSETSCash and equivalents – unrestricted

$
6,658


$
359,079Cash and equivalents – restricted


40,010



-Prepaid expenses and advances to employees


17,984



17,423Total current assets


64,652



376,502Property, Plant and Equipment, net of accumulated depreciation of $49,123 and $12,819 at March 31, 2011 and  June 30, 2010, respectively


31,002



67,314Deposits


8,181



8,181Total non-current assets


39,183



75,495TOTAL ASSETS

$
103,835


$
451,997LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Accounts payable and accrued liabilities

$
91,093


$
25,277Accounts payable – related party


156,415Deferred Revenue


299,975



166,667Total current liabilities


547,483



191,944TOTAL LIABILITIES


547,483



191,944STOCKHOLDERS' EQUITY (DEFICIT)Preferred Stock - $0.10 par value: 25,000,000 shares authorized; none issued and outstanding at March 31, 2011or June 30, 2010


-



-Common stock, $0.001 par value; 100 million shares authorized, 31,612,109 and 29,662,109 shares issued and outstanding at March 31, 2011 and June 30, 2010, respectively


31,612



29,662Additional paid in capital


1,955,483



1,303,743Common stock committed


50,000



50,000Accumulated deficit


(2,480,743
)


(1,123,352
)TOTAL STOCKHOLDERS' EQUITY (DEFICIT)


(443,648
)


260,053TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$
103,835


$
451,997






The accompanying notes are integral to these financial statements.


- 3 -





ENERGY HOLDINGS INTERNATIONAL, INC.


CONSOLIDATED RESULTS OF OPERATIONS


(Unaudited)






Nine Months Ended

March 31,


Three Months Ended

March 31,2011


2010


2011


2010REVENUESConsulting revenues

$
166,667


$
1,435,749


$
-


$
500,000TOTAL REVENUES


166,667



1,435,749



-



500,000OPERATING EXPENSESGeneral and administrative expenses


1,487,764



1,854,022



688,225



564,895Depreciation


36,304



27,168



12,777



15,556Total operating expenses


1,524,068



1,881,190



701,002



580,451NET LOSS FROM OPERATIONS


(1,357,401
)


(445,441
)


(701,002
)


(80,451
)OTHER INCOME/(EXPENSE)Gain on disposal of property


-



2,119



-



-Interest income


10



-



10



-Total other income/(expense)


10



2,119



-



-Net loss


(1,357,391
)


(443,322
)


(700,992
)


(80,451
)Net income (loss) attributable to non-controlling interests


-



522,563



-



409,147Net loss attributable to Energy Holdings International

$
(1,357,391
)

$
79,241


$
(700,992
)

$
328,696Net loss per share - basic and diluted

$
(0.05
)

$
-


$
(0.02
)

$
0.01Weighted average number of shares outstanding


29,938,547



22,877,601



30,161,065



29,462,109






The accompanying notes are integral to these financial statements.


- 4 -


ENERGY HOLDINGS INTERNATIONAL, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)






Nine Months Ended March 31,2011


2010CASH FLOWS FROM OPERATING ACTIVITIESNet income / (loss)

$
(1,357,391
)

$
79,241Net loss, non-controlling interest


-



(392,837
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense


36,304



27,168Gain on sale of fixed asset


-



(2,119
)Stock based compensation


448,331



408,000Common stock committed for services


-



50,000Change in operating assets and liabilities:Deposits, prepaid expenses and other current assets


(561
)


(61,374
)Accounts payable and accrued liabilities


87,324



28,274Deferred revenues


133,308



634,224Related party payables


134,915



(7,414
)Net cash provided by / (used in) operations


(517,770
)


763,163CASH FLOWS FROM INVESTING ACTIVITIESPurchases of fixed assets


-



(137,203
)Net cash used in investing activities


-



(137,203
)CASH FLOWS FROM FINANCING ACTIVITIESRelated-party cash contributions


5,359



-Sales of common stock


200,000



-Net cash provided by/(used in) financing activities


205,359



-Net change in cash and equivalents


(312,411
)


625,960Cash and equivalents, beginning of period


359,079



25,600Cash and equivalents, end of period

$
46,668


$
651,560SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid for interest

$
-


$
-Cash paid for income taxes


-



-SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIESSales of fixed assets in exchange for retirement of debt

$
-


$
16,976




The accompanying notes are integral to these financial statements.


- 5 -





ENERGY HOLDINGS INTERNATIONAL, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)






NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:




Energy Holdings International, Inc. (the “Company”), was incorporated in the State of Nevada on November 30, 2006 as a successor corporation to Green Energy Corp. which was incorporated in the State of Colorado on October 14, 2003. Green Energy Corp. acquired Green Energy Holding Corp. on December 18, 2006.
 
 On March 10, 2009, the Company amended the Articles of Incorporation to change its name from Green Energy Holding Corp. to Energy Holdings International, Inc.
 
 The Company is a holding company that also provides consulting services and is currently exploring various opportunities in the energy area.  EHII’s management has been in active discussions with several potential companies, either to acquire, manage, or joint venture with these entities.  However, as of the date of this filing, no definitive agreements or arrangements have been finalized.
 
 The Company has consolidates the accounts of Advance Energy DMCC, a firm in Dubai, United Arab Emirates, into its financial statements.  In July, 2010, we changed the name of the Dubai subsidiary to “EHII MENA” (Middle East and North Africa).
 
 Basis of Presentation
 
 The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.
 
 All of the Company’s accounting policies are not included in this Form 10-Q.  A more comprehensive set of accounting policies adopted by the Company are included on our Form 10-K as of June 30, 2010 and are herein incorporated by reference.
 
 Fiscal Year
 
 The Company’s fiscal year is June 30.
 
 Cash and Cash Equivalents
 
 The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.  There are no cash equivalents at March 31, 2011 or June 30, 2010.  At March 31, 2010, we had $40,010 on deposit with a financial institution as a compensating balance to cover our usage of credit cards for travel.  We are prohibited from using these funds until such time as the institution releases us from the obligation to retain these funds at their bank.
 
 Property and Equipment
 
 Property and equipment are recorded at cost and straight-line depreciated over each item's estimated useful life, which is three years for vehicles, computers and other items.  Our fixed assets consist generally of office furniture, which is being depreciated over its useful life, generally five years, and equipment, which is being depreciated over their useful lived, which is generally seven years.
  - 6 -


ENERGY HOLDINGS INTERNATIONAL, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


Revenue Recognition
 
 Revenue is comprised principally of service and consulting revenue from work performed for customers under master service arrangements. Revenue is recognized over the period of the agreement as it is earned as such policy complies with the following criteria: (i) persuasive evidence of an arrangement exists; (ii) the services have been provided; (iii) the fee is fixed and determinable, (iv) collectability is reasonably assured.   In the event that a customer pays up front, deferred revenue is recognized for the amount of the payment in excess of the revenue earned.
 
 Use of Estimates
 
 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.
 
 Income Tax
 
 The Company accounts for income taxes under current Accounting Standards Codification 740, (“ASC 740”) where deferred taxes are provided on a liability method and deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.  Since the company considers it more likely than not that no benefit from net operating loss carry forwards will be recognized in the future, deferred tax assets are fully offset by a valuation allowance.
 
 Net Income (Loss) per Share
 
 The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.
 
 As of March 31, 2011, we had 500,000 warrants outstanding (see Note 4) and none as of June 30, 2010.  These potentially dilutive securities did not affect our net loss per share for the periods presented in the statement of operations because to do so would be anti-dilutive.
 
 Financial Instruments
 
 Current accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
 
 ·
Level 1.  Observable inputs such as quoted market prices in active markets.
 ·
Level 2.  Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and
 ·
Level 3.  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
 
 The Company had no assets or liabilities that were measured and recognized at fair value on a non-recurring basis as of March 31, 2011 or June 30, 2010, and as such, had no assets or liabilities that fell into the tiers described above.
 
 Recent Accounting Pronouncements
 
 Effective in this filing, the Company adopted changes issued by the FASB related to the authoritative hierarchy of Generally Accepted Accounting Principals (GAAP) and the establishment of the FASB Accounting Standards Codification.  The codification is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  These changes and the codification itself do not change GAAP, and other than the manner in which accounting guidance is referenced in our filing, the adoption of this standard had no impact on our financial statements.




- 7 -


ENERGY HOLDINGS INTERNATIONAL, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)






The Company has reviewed other recent accounting pronouncements and does not anticipate any impact on financial results as a result of recently issued standards.
 
 NOTE 2. GOING CONCERN
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As shown in the accompanying financial statements, we had losses and negative cash flows from operations for the nine months ended March 31, 2011 and negative working capital at March 31, 2011.
 
 These conditions raise substantial doubt as to our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
 
 Management is currently negotiating additional consulting contracts to raise revenues to pay our operating costs.  As is discussed in Note 11 to our Form 10-K as of our previous fiscal year, June 30, 2010 filed on October 13, 2010, in September, 2010, we received $200,000 as advance payment against a consulting contract with a client in Saudi Arabia. Another retainer was received on November 5, 2010 in the amount of $100,000.  As of the date of that report, we are still negotiating the terms of that agreement. The $200,000 received in September, 2010 and the $100,000 received in November, 2010 are included in Deferred Revenue.
 
 NOTE 3. RELATED PARTY TRANSACTIONS
 
 Our Chief Executive Officer contributed $5,359 in cash.
 
 In January, 2011, we issued 500,000 shares to three sons of our Chief Executive Officer to serve as advisors to the board of directors.  We valued the shares at the closing price on the date of agreement and charged general and administrative expense with $255,000.
 
 In March, 2011, we issued 200,000 shares to John Adair, our Chief Executive Officer and 100,000 shares to our Chief Financial Officer as additional compensation.  We valued the shares at the closing price on the date of issuance and charged general and administrative expense with $12,000.
 
 We owed related party costs to our  Chief Executive Officer, John Adair, our Chief Financial Officer Jalal Alghani, and to their children who render services to the Company.  Collectively, this amounted to $156,415 at March 31, 2011.
 
 NOTE 4.  COMMON STOCK AND CAPITAL STRUCTURE
 
 EHII issued 13,985,700 shares to founders and to management for services during November, 2009. The balance of shares issued and outstanding as of February 16, 2010 was 29,462,109.  Of these shares, we previously committed to issuing an additional 11,585,700 restricted shares, which was later increased to 14,085,700.   These shares of common stock were issued to accredited investors, each of whom were provided with information, including financial information, concerning the company.  The shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.  While the company approved the issuance of the securities in February 2009, the shares of common stock were not issued until October 2009.
 
 As is discussed in Note 5, we have committed to issuing 25,000 shares of common stock for investor relations services.  We have included a liability in the equity section of the balance sheet for these shares, valuing them at $2.00 per share, the closing price on the date of the contract.
 
 During the three months ended June 30, 2010, we issued 100,000 shares to a consultant for services related to the filing of our quarterly and annual reports on Forms 10-K and 10-Q.  We valued the shares on the grant date and charged general and administrative expenses in the amount of $3,500.
 
 During the three months ended September, 2010, we issued 100,000 shares to a director.  We valued the shares at the closing price on the grant date ($0.85 per share) and charged general and administrative expenses with $85,000.
 
 In January, 2011, we issued 500,000 shares to three sons of our Chief Executive Officer to serve as advisors to the board of directors.  We valued the shares at the closing price on the date of agreement and charged general and administrative expense with $255,000.
 
 Also in January, 2011, we issued 200,000 shares  in exchange for $100,000 in cash to an accredited investor.
 
 In March 2011, we issued 100,000 additional shares to an accredited investor for $100,000 in cash.





- 8 -


ENERGY HOLDINGS INTERNATIONAL, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




Also in March, 2011, we issued 200,000 shares to John Adair, our Chief Executive Officer and 100,000 shares to our Chief Financial Officer as additional compensation.  We valued the shares at the closing price on the date of issuance and charged general and administrative expense with $12,000.
 
 Also in March, 2011, we issued 750,000 shares to two consultants for services.  We valued the shares at the closing price on the grant date and charged general and administrative expense with $72,500.
 
 On March 1, 2011, we granted 500,000 one-year warrants to a consultant for services with a strike price of $0.50.  We valued these warrants using the Black-Scholes option pricing model and recorded an increase in Additional Paid in Capital and a corresponding charge to consulting expense in the amount of $23,831.  As inputs to the valuation model, we used the following: volatility: 480.79%; stock price on grant date: $0.05; risk-free capital rate: 0.25%.
 
 
 NOTE 5.  COMMITMENTS AND CONTINGENCIES
 
 On November 19, 2009, the Company entered into a five year lease for approximately 2,338 square feet of office space in Houston, TX.   The monthly base rent will be $3,896.67 for the first three years and $4,091.50 for the remaining two years.
 
 We have committed to issuing 25,000 shares of common stock for investor relations services.  We have included a liability in the equity section of the balance sheet for these shares, valuing them at $2.00 per share, the closing price on the date of the contract.
 
 NOTE 6.  SUBSEQUENT EVENTS
 
 The Company has evaluated subsequent events through the date these financial statements were issued.
 
 
 NOTE 7.  ACQUISITION OF SUBSIDIARY AND PRO-FORMA RESULTS OF OPERATIONS
 
 On March 31, 2010, we signed a Share Exchange Agreement (“the SEA”) with Advance Energy DMCC, a free-zone Dubai Multi Commodities Centre Company organized under the laws of Dubai, United Arab Emirates (“Advance”) and with the Advance shareholders to acquire 100 percent of the issued and outstanding shares of Advance in exchange for 100,000 shares of our common stock, rendering Advance a wholly-owned subsidiary of the Company.  We subsequently changed the name of Advance Energy to EHII MENA (Middle East and North Africa).
 
 We issued the 100,000 shares on May 29, 2010 and valued the shares at the date of the Share Exchange Agreement ($0.035) or $3,500.
 
 In December 2007, the Financial Accounting Standards Board what is now codified in FASB ASC 805, which governs business acquisitions and combinations.  FASB ASC 805 establishes, among other things, the following principles and requirements:
 
 ·
With limited exceptions specified in the Statement, an acquirer is required to recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree, measured at their fair values as of the acquisition date.
 
 ·
An acquirer is required to recognize and measure the goodwill acquired in the business combination or a gain from a bargain purchase. FASB ASC 805 defines a bargain purchase as a business combination in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any non-controlling interest in the acquiree, and it requires the acquirer to recognize that excess in earnings as a gain attributable to the acquirer.
 
 On the date of the acquisition, the total stockholders’ equity was $108,890, consisting of $31,809 in cash, $28,636 of other current assets and $48,445 of property, plant and equipment, stated at fair market value.  The excess of the fair value of the subsidiary assets at the time of purchase ($108,890) and the fair value of the consideration given in exchange (100,000 shares valued at $3,500) was recorded as a gain on acquisition of subsidiary in the Other Income/Expense section of our Statement of Operations .


- 9 -


ENERGY HOLDINGS INTERNATIONAL, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)






A breakdown of the purchase price is as follows:
 
 Cash

$
31,809Other current assets


28,636Property, plant and equipment


48,445Net assets acquired


108,890Less: excess purchase price


105,390Total consideration

$
3,500
 
 During the three months ended December 31, 2009, we consolidated Advance Energy in Dubai (now called “EHII MENA”) based on accounting rules governing Variable Interest Entities contained in Accounting Codification Topic 810, and not based on our actual acquisition of that company.  Under these rules, an entity is a “Variable Interest Entity” when its equity investors do not have sufficient equity at risk such that the entity cannot finance its own activities. When a business has a controlling financial interest in a variable interest entity, the assets, liabilities, and profit of that entity must be included in consolidation.
 
 Because for the three months ended December 31, 2009, we had transferred $180,000 to EHII MENA to pay its operating costs, we believed that Advance Energy qualified as a variable interest entity and Energy Holdings International as the beneficiary.  As a result, we consolidated the financial statements of AED into the account of the Company as of October 1, 2009.
 
 However, because we consolidated EHII MENA as a variable interest entity, our statement of operations included a line subtracting the net loss of the subsidiary of $113,346 and attributing that loss to non-controlling interests.  Had we owned EHII MENA outright at December 31, 2009, we would have had no such attribution.
 
 The following pro-forma removes the effect of the attribution of the net loss of EHII MENA to non-controlling interests:


Nine Months Ended March  31, 2011


Nine Months Ended March 31, 2010EHII Consolidated As Originally Reported


Adjustment

No.

Combined Pro-FormaConsulting revenue
$
166,667

$
1,435,749

$
-


$
1,435,749Total revenues

166,667


1,435,749


-



7,435,749Operating expenses:General and administrative expenses

1,487,764


1,854,022


-



1,854,022Depreciation

36,304


27,168


-



27,168Total expenses

1,524,068


1,881,190


-



1,881,190Income (loss) from operations

(1,357,401)


(445,441)


-



(445,441)Other income (expense):Gain on disposal of property

-


2,119


-



2,119Interest income

10


-


-



-Net income (loss)

(1,357,391)


(443,322)


-



(443,322)Net (income) loss attributable to non-controlling interests

-


522,563


(522,563)

1

-Net income attributable to Energy Holdings International
$
(1,357,391)

$
79,241

$
(522,563)


$
(443,322)Weighted average shares outstanding - basic and diluted

30,004,992


22,877,601


100,000

2

22,977,601Net loss per share - basic and diluted
$
(0.05)

$
(0.02)





$
(0.02)
  Adjustments:
  1. Removal of attribution of net loss of subsidiary to non-controlling interests.
  2. Shares issued to acquire subsidiary.


- 10 -







ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION





The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in, Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements.





Forward-Looking Statements





This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements.  Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management.  Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words, and similar expressions are intended to identify such forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements.  Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.  However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly the Annual Reports on Form 10-K, Quarterly reports on Form 10-Q and any Current Reports on Form 8-K.





Overview and History





The Company’s predecessor, Green Energy Corp. was originally organized as a Colorado corporation, referred to in this document as “Old Green Energy”, commenced operations in 2003 as a marketer of a specific gasification technology for commercial applications to produce fuels and chemicals.  On November 20, 2003, Old Green Energy filed a Limited Registration Offering Statement under cover of Form RL pursuant to the Colorado Securities Code relating to a proposed offering of up to 1.8 million shares of common stock, which was declared effective by the Colorado Division of Securities on January 21, 2004. The offering, which closed on June 29, 2004, raised $263,850 and sold a total of 527,700 shares in the offering.   In December 2006, Old Green Energy reincorporated as a Nevada corporation and changed its name to Green Energy Holding Corp.





On December 28, 2008, GEHC entered into a stock purchase agreement to issue 14,370,300 shares to accredited investors for $175,000, giving those outside investors approximately 96.5% controlling interest in the Company with a total acquisition cost being $500,000.





On March 10, 2009, the Company amended the Articles of Incorporation to change its name from Green Energy Holding Corp. to Energy Holdings International, Inc.





On October 5, 2010, we signed non-binding letter of intent with ERA Infra Engineering Ltd., a company registered in New Delhi, India, to provide opportunities in Iraq and other Middle Eastern countries for which we would receive a $3 million fee upon the execution of certain milestones.  We expect all of these milestones to be completed before the end of the calendar year 2010.





We are currently negotiating the terms of a consulting agreement with a company in the Kingdom of Saudi Arabia, to provide certain engineering consulting services relating to various power plants in Saudi Arabia and elsewhere in the middle east.  We expect the value of this contract to be between $1.5 and $2 million.  In September, 2010, we received advance retainers against that contract in the amount of $300,000.





In addition, on of September 26, 2010, we signed a letter of intent (“LOI”) with the Basra Government Council who was represented by Dr. Jaber Al-Jaber as Chairman and an authorized representative of the Basra Government Council of Iraq to build a 600 MW power plant in the region of the Basra for a build, own, operate and transfer basis project.  His Royal Highness Prince Abdullah Bin Bandar Abed Al-Aziz Al Saud and Jalal Alghani as Board of Directors of the Company signed the MOU.





Energy Holdings International, Inc. has subsequently signed a Memorandum of Understanding with SREI Infrastructure Finance Limited (SIFL), an entity incorporated in India with the purpose of forming a Special Purpose Vehicle (SPV) in order to complete the development and construction of 2 X 600 MW Power Plant in Basra, Iraq.





In addition, in November 2010, Energy Holdings International, Inc. signed an association agreement with CH2MHill who will be available to supply construction expertise in Iraq, especially the development of the 250,000 barrel per day  refinery as mentioned below.


- 11 -


Also, Chairman John W. Adair and Vice-Chairman Alghani have completed a number of meetings during the quarter ending December 31, 2010 with VOLAW Trust and Corporate Services Limited with the intention of setting up and organizing a large energy fund. VOLAW is located in Jersey, Channel Islands, U.K. The purpose of the use of Jersey is at the request of the investors who are located primarily in the Middle East. Energy Holdings International, Inc. anticipates the organization of the fund will be finalized during the first or second quarter of calendar year 2011.
 
 Energy Holdings International, Inc. anticipates the funds will be utilized primarily for the purchase of oil and gas assets located in the Continental United States.
 
 During the quarter ending December 31, 2010, Energy Holdings International, Inc. received the long awaited confirmation of the availability of the natural gas necessary for the construction of the 450 MW Combined Cycle Power Plant located in the country of Bangladesh.  We are currently in the process of completing the Power Purchase Agreement (PPA) for the project. Parsons Brinkerhoff (PB) has completed a site visit on behalf of Energy Holdings International, Inc. and Energy Holdings International, Inc. has an association agreement with Parsons Brinkerhoff for technical assistance.
 
 Also, on September 26, 2010 we signed a letter of intent with the Basra Government Council who was represented by Dr. Jaber Al-Jaber as chairman and authorized representative of the Basra Government Council of Iraq to build a 250,000 barrel a day oil refinery to be constructed in the region of the Basra Governorate. We are in a dialog with CH2MHILL to provide the Technical and project management expertise through an association agreement with Energy Holdings International Incorporated. Samsung has conveyed an interest to participate with us in the project.
 
 His Royal Highness Prince Abdullah Bin Bandar Abed Al-Aziz Al Saud and Jalal Alghani signed the LOI as authorized by the Board of Directors of the Company.
 
 In addition, on October 4, 2010 the Company and Prize Petroleum Company Limited, a subsidiary of the Indian National Oil Company, Hindustan Petroleum signed an LOI to jointly pursue oil and gas acquisitions within the region of the Middle East and North America. Mr. M. R. Pasrija signed on behalf of Prize Petroleum and Mr. John Adair and Mr. Jalal Alghani signed on behalf of Energy Holdings International Incorporated.
 
 Our Business
 
 The Company was originally organized in October 2003 to capitalize on the growing market for alternative fuels and its co-products.  The Company acquired a non-exclusive license to a specific technology for the conversion of biomass to synthesis gas (“syngas”). The technology includes the ability to produce a consistent, high-quality syngas product that can be used for energy production or as a building block for other chemical manufacturing processes.
 
 Following the sale of 96.5% of the Company’s capital stock at the end of calendar 2008, the Company decided to modify its focus, concentrating on acquiring, developing and managing cash producing oil and gas properties in the Middle East, Asia and the Americas, particularly in the middle region of the United States.  It aspires to find new, long-term energy solutions that are safe, economically viable and environmentally friendly to enhance the future of countries and economies worldwide. It is responding to international, political, environmental and free market demands for investments in the Independent Power Project (IPP) market with safer, cleaner and more technologically advanced energy sources. The Company is dedicated to the task of providing the best management and advisory services available in the complex arena of international business and project development in oil and gas production and power generation.
 
 Our corporate headquarters is located at 12012 Wickchester Lane, Suite 150, Houston, Texas 77079 and our telephone number is (561) 445-1050.   The Company’s website is www.energhii.com.
 
 Results of Operations
 
 For the Nine Months Ended March 31, 2011 and 2010
 
 Net Income. We had a net income of $79,241 (after adding back in $522,563 of net loss attributable to non-controlling interest) for the nine months ended March 31, 2010, versus a loss of $1,357,391 for the same period in 2011.  The change is due primarily from the lack of consulting arrangements in the current year versus the previous year.
 
 Operating Expenses.General and administrative expenses are lower in the current year ($1,487,764 versus $1,854,022) due to decreased activity in our operating subsidiary in Dubai, UAE.
 
 Our depreciation expense was $36,304 for the nine months ended March 31, 2011 versus $27,168 for the same period last year.  The increase is due to inclusion of only six months of depreciation in the previous for our subsidiary in Dubai, whereas the current year contains a full nine months .


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 Liquidity and Capital Resources
 
 As of March 31, 2011, we had $46,668 in cash of which $40,010 is restricted from our use by our bank as a compensating balance to offset our credit card use which we use for travel to the middle east.
 
 For the nine months ended March 31, 2011, we used $517,770 in operating activities, compared to a positive cash flow from operating activities of $763,163 for the same period in the previous year. The decrease is related to the consulting contract closed in July 2009 with no counterpart consulting contract in the current year. We are currently negotiating a similar contract for consulting services and received advance retainers of $300,000 in anticipation of beginning work.
 
 For the nine months ended March 31, 2011, net cash used by investing activities was $0 versus $137,203 used in investing activities for the same period last year.  Last year, we outfitted our Houston office with furniture and fixtures whereas we have purchased no additional such items in the current year.
 
 Cash flows from financing activities was $205,359 and minus $0, respectively.  We sold common stock in the current year and received a cash payment from our Chief Executive Officer whereas the previous year had no such activity.
 
 Following the change in control of the Company, the purchasers currently intend to continue the Company’s business focus  in the areas of  oil and gas, including exploration and development, as well as other energy projects including power development, both domestically and internationally.  We are currently in discussions with several intermediaries, advisors and investors to structure and raise the funds to optimally finance various potential projects, both domestically and in the Middle East. We are evaluating debt and equity placements at the corporate level as well as project specific capital opportunities.
 
 Off-Balance Sheet Arrangements
 
 We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.
 
 Critical Accounting Policies
 
 Our discussion and analysis of results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis and base our estimates on historical experience and on various other assumptions that are believed 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 from these estimates under different assumptions or conditions.
 
 The accounting policies that we follow are set forth in Note 1 to our financial statements as included in this filing.  These accounting policies conform to accounting principles generally accepted in the United States, and have been consistently applied in the preparation of the financial statements.
 
 Recently Issued Accounting Pronouncements
 
 We do not expect any recently issued accounting pronouncements to have a material impact on our financial statements.
 
 
 ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
 As a "smaller reporting company" as defined by Item 10 of Regulation S-K, EHII is not required to provide this information.
 
 
 ITEM 4. CONTROLS AND PROCEDURES
 
 Disclosure Controls and Procedures
 
 As of the end of the period covered by this report, based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a -15(e) and 15(d)-15(e) under the Exchange Act), our Chief Executive Officer and the Chief Financial Officer each have concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the applicable time periods specified by the SEC’s rules and forms.


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This conclusion is based upon the number and magnitude of adjustments by our independent auditors during their review of the quarter ended March 31, 2011.  Management is currently evaluating ways to strengthen our internal controls, subject to a cost-benefit analysis.  Additional information will be made forthcoming as it becomes available.
 
 There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
  PART II.  OTHER INFORMATION
 
  ITEM 1.  LEGAL PROCEEDINGS
 
 There are no legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.
 
  ITEM 1A. RISK FACTORS
 
 Important Risk Factors Concerning our Business.
 
 You should carefully consider the following risk factors and all other information contained in this Report in evaluating our business and prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties other than those we described below that are not presently known to us or that we believe are immaterial may also impair our business operations. If any of the following risks occur, our business and financial results could be harmed. You should also refer to the other information contained in this Quarterly Report, including our consolidated financial statements and the related notes.
 
 Risks Related to Our Business and Industry
 
 We have a limited operating history.
 
 We began operations in October 2003. Since the inception of our current business operations, we have been engaged in organizational activities, including developing a strategic operating plan, entering into contracts, hiring personnel, developing processing technology, raising private capital and seeking acquisitions. Accordingly, we have a limited relevant operating history upon which an evaluation of our performance and future prospects can be made.
 
 
 We will be forced to continue to seek financing partners, either through debt or equity, to achieve our business objectives.
 
 As of March 31, 2011, we had unrestricted cash of only $6,658.  We will need significant capital expenditures and investments over the next twelve to eighteen months related to our growth program.  We are also currently evaluating potential joint venture partners.  We plan to raise additional capital to fund these site acquisitions or provide seed equity for the projects while we analyze financing options.
 
 We are currently in discussions with several intermediaries, advisors and investors to structure and raise the funds to optimally finance potential projects.  We are evaluating debt and equity placements at the corporate level as well as project specific capital opportunities. We have no commitments for any additional financing, and there can be no assurance that, if needed, additional capital will be available to use on commercially acceptable terms or at all. Our failure to raise capital as needed would significantly restrict our growth and hinder out ability to compete. We may need to curtail expenses, reduce planned investments in technology and research and development and forgo business opportunities. Additional equity financings are likely to be dilutive to holders of our common stock and debt financing, if available, may involve significant payment obligation and covenants that restrict how we operate our business.
 
 We may incur expenses and costs in connection with due diligence of potential partners and joint venturers, which projects may not come to fruition.
 
 The Company is currently undertaking financial and technical due diligence, both directly and through third parties, with respect to a potential acquisition of oil and gas properties in North America and power general plants in the Middle East.  EHII is still in discussion with various potential trading partners and oil and gas property sellers and cannot make any estimates when or if the transaction will occur.


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We are currently focusing on energy projects in the United Arab Emirates and the Middle East, areas where there have been political conflicts and instability.
 
 The Company is in discussions with a number of entities that are located in the United Arab Emirates and elsewhere in the Middle East.  Because of conflicts in the region, continuing terrorism concerns, both in the United States and internationally, the environment in which we operate could become unstable.
 
 Strategic acquisitions could have a dilutive effect on shareholdings.   Failure to make accretive acquisitions and successfully integrate them could adversely affect our future financial results
 
 As part of our growth strategy, we will seek to acquire or invest in complementary (including competitive) businesses, facilities or technologies and enter into co-location joint ventures in the oil & gas and power generation industries. Our goal is to make such acquisitions, integrate these acquired assets into our operations and reduce operating expenses. The process of integrating these acquired assets into our operations may result in unforeseen operating difficulties and expenditures, and may absorb significant management attention that would otherwise be available for the ongoing development of our business. We cannot assure you that the anticipated benefits of any acquisitions will be realized. In addition, future acquisitions by us could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to goodwill and other intangible assets, any of which can materially and adversely affect our operating results and financial position.
 
 We depend on our officers and key personnel and the loss of any of these persons could adversely affect our operations and results.
 
 We believe that implementing our proposed expansion strategy and execution of our business plan to acquire, manage and develop power generation and oil & gas assets will depend to a significant extent upon the efforts and abilities of our officers and key personnel. Because the oil, gas and alternative energy industries are highly competitive, we believe that the personal contacts of our officers and key personnel within the industry and within the scientific community engaged in related businesses are a significant factor in our continued success. Our failure to retain our officers or key personnel, or to attract and retain additional qualified personnel, could adversely affect our operations and results. We do not currently carry key-man life insurance on any of our officers.
 
 Because we are smaller and have fewer financial and other resources than energy focused companies, we may not be able to successfully compete in the very competitive industry.
 
 There are significant competition among existing oil, gas, and alternative energy companies.  Our business faces competition from a number of entities that have the financial and other resources that would enable them to expand their businesses.  Even if we are able to enter into joint venture agreements, our competitors may be more profitable than us, which may make it more difficult for us to raise any financing necessary for us to achieve our business plan and may have a materially adverse effect on the market price of our common stock.
 
 The United States oil, gas, alternative energy industry is highly dependent upon federal and state legislation and regulation and any changes in that legislation or regulation could materially adversely affect our results of operations and financial condition.
 
 The elimination or significant reduction in the federal tax incentive could have a material adverse effect on our results of operations
 
 Costs of compliance with burdensome or changing environmental and operational safety regulations could cause our focus to be diverted away from our business and our results of operations to suffer.
 
 Risks Related to an Investment in Our Common Stock
 
 Our common stock price has fluctuated considerably and stockholders may not be able to resell their shares at or above the price at which such shares were purchased.
 
 The market price of our common stock has fluctuated in the past, and may continue to fluctuate significantly in response to factors, some of which are beyond our control. For example, from May 2004 through March 31, 2011, the high and low bid or sales price for our common stock has been $2.00 and $0.035 per share, respectively.  The stock market in general has experienced extreme price and volume fluctuations. The market prices of securities of fuel-related 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 our common stock, which could cause a decline in the value of our common stock. Price volatility might be intensified under circumstances where the trading volume of our common stock is low.


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We may not be able to attract the attention of major brokerage firms for research and support which may adversely affect the market price of our common stock.





Securities analysts of major brokerage firms may not publish research on our common stock. The number of securities competing for the attention of such analysts is large and growing. Coverage of a security by analysts at major brokerage firms increases the investing public’s knowledge of and interest in the issuer, which may stimulate demand for and support the market price of the issuer’s securities. The failure of major brokerage firms to cover our common stock may adversely affect the market price of our common stock.





Future sales of common stock or other dilutive events may adversely affect prevailing market prices for our common stock.





We are currently authorized to issue up to 100 million shares of common stock, of which 31,612,109 shares were issued and outstanding as of March 31, 2011.  Our board of directors has the authority, without further action or vote of our stockholders, to issue any or all of the remaining authorized shares of our common stock that are not reserved for issuance and to grant options or other awards to purchase any or all of the shares remaining authorized. The board may issue shares or grant options or awards relating to shares at a price that reflects a discount from the then-current market price of our common stock. The options and awards referred to above can be expected to include provisions requiring us to issue increased numbers of shares of common stock upon exercise or conversion in the event of stock splits, redemptions, mergers or other transactions. If any of these events occur, the exercise of any of the options or warrants described above and any other issuance of shares of common stock will dilute the percentage ownership interests of our current stockholders and may adversely affect the prevailing market price of our common stock.





A significant number of our shares will be eligible for sale, and their sale could depress the market price of our common stock.





Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock. Virtually all shares of our common stock may be offered from time to time in the open market, including the shares offered pursuant to this filing. These sales may have a depressive effect on the market for the shares of our common stock. Moreover, additional shares of our common stock, including shares that have been issued in private placements, may be sold from time to time in the open market pursuant to Rule 144. In general, a person who has held restricted shares for a period of one year may, upon filing with the SEC a notification on Form 144, sell into the market common stock in an amount equal to the greater of 1% of the outstanding shares or the average weekly number of shares sold in the last four weeks prior to such sale. Such sales may be repeated at specified intervals.  Subject to satisfaction of a two-year holding requirement, non-affiliates of an issuer may make sales under Rule 144 without regard to the volume limitations and any of the restricted shares may be sold by a non-affiliate after they have been held two years. Sales of our common stock by our affiliates are subject to Rule 144.





Investors should not anticipate receiving cash dividends on our common stock.





We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings to support operations and to finance expansion and, therefore, we do not anticipate paying any cash dividends on our common stock in the foreseeable future.





We may issue shares of preferred stock without stockholder approval that may adversely affect your rights as a holder of our common stock.





Upon our amending our certificate of incorporation authorizes us to issue up to 25 million shares of “blank check” preferred stock with such designations, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered, without stockholder approval, to issue a series of preferred stock with rights to receive dividends and distributions upon liquidation in preference to any dividends or distributions upon liquidation to holders of our common stock and with conversion, redemption, voting or other rights which could dilute the economic interest and voting rights of our common stockholders. The issuance of preferred stock could also be used as a method of discouraging, delaying or preventing a change in control of our company or making removal of our management more difficult, which may not be in your interest as holders of common stock.





Provisions in our articles of incorporation and bylaws and under Nevada law could inhibit a takeover at a premium price.





Our bylaws limit who may call a special meeting of stockholders and establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings. Each of these provisions may have the effect to discouraging, delaying or preventing a change in control of our company or making removal of our management more difficult, which may not be in your interest as holders of common stock.





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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
 We  issued 14,370,300 shares to founders following the December 2008 sale of 96.5% of the Company’s outstanding stock, as well as to current management.  These shares were issued on November 5, 2009.  All of the shares of common stock were issued to accredited investors, each of who were provided with information, including financial information, concerning the company.  The shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.  While the company approved the issuance of the securities in February 1309, the shares of common stock were not issued until November 2009.
 
 We issued an additional 13,985,700 on February 16, 2010, of which 11,585,700 were committed to be issued as founders shares at the time of the sale change of control in December, 2008.
 
 On May 29, 2010, we issued 100,000 shares to acquire Advance Energy DMCC, Dubai (whose name we subsequently changed to “EHII MENA”.
 
 On April 1, 2010, we issued 100,000 shares to a consultant for services related to our corporate governance and filings with the Securities and Exchange Commission.
 
 On July 6, 2010, we issued 100,000 shares to a director for services.
 
 In January, 2011, we issued 500,000 shares to three sons of our Chief Executive Officer to serve as advisors to the board of directors.
 
 Also in January, 2011, we issued 200,000 shares  in exchange for $100,000 in cash to an accredited investor.
 
 In March 2011, we issued 100,000 additional shares to an accredited investor for $100,000 in cash.
 
 Also in March, 2011, we issued 200,000 shares to John Adair, our Chief Executive Officer and 100,000 shares to our Chief Financial Officer as additional compensation.
 
 Also in March, 2011, we issued 750,000 shares to two consultants for services.
 
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
 None.
 
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 Not applicable.
 
  ITEM 5.  OTHER INFORMATION
 
 None.


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ITEM 6.  EXHIBITS




Exhibits




3.1
Articles of Incorporation3.1.1
Articles of Amendment filed with the Nevada Secretary of State (filed with the Securities

and Exchange Commission on Form 8-K/A on March 24, 2009)3.2*
Bylaws21 *
List of Subsidiaries.10.1
Stock Purchase Agreement between the Company and the Representative of the Stockholders,

effective December 29, 2008 (filed with the Securities andExchange Commission on Form 8-K on

January 5, 2009).31.1**
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a)31.2**
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a)32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 200232.2**
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




* Previously filed under cover of Form SB-2 on February 27, 2007.


** Filed herein


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SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 16, 2011





ENERGY HOLDING INTERNATIONAL, INC.May 16, 2011
By:
/s/ John AdairJohn Adair,Chief Executive Officer, President, and Chief Financial Officer

(principal executive officer and Principal Financial and Accounting Officer)








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