ENERGY HOLDINGS INTERNATIONAL, INC. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - ENERGY HOLDINGS INTERNATIONAL, INC.	Financial_Report.xls

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended March 31, 2013

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		26-4574476
(State or other jurisdiction of incorporation)		(IRS Employer File Number)

12012 Wickchester Lane, Suite 150

Houston, TX 77079

(Address of principal executive offices) (zip code)

(281) 617-7198

(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 þ No o

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 o No þ

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

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

The number of shares outstanding of the Registrant's common stock, as of the latest practicable date: May 15, 2013 was 36,656,006.

FORM 10-Q/A

Energy Holdings International, Inc.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		3

ITEM 1.	FINANCIAL STATEMENTS	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION	13

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	15

ITEM 4.	CONTROLS AND PROCEDURES	15

PART II. OTHER INFORMATION		16

ITEM 1.	LEGAL PROCEEDINGS	16

ITEM 1A.	RISK FACTORS	16

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	19

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	19

ITEM 4.	MINE SAFETY DISCLOSURE	19

ITEM 5.	OTHER INFORMATION	19

ITEM 6.	EXHIBITS	20

SIGNATURES		21

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.

(A Development Stage Enterprise)

CONSOLIDATED BALANCE SHEETS

	03/31/13 (Unaudited)			06/30/12 (Audited)

ASSETS
Cash and equivalents - unrestricted	$	31,336		$	10,514
Cash and equivalents - restricted		-			40,068
Prepaid expenses and advances to employees		26,482			22,684
Total current assets		57,818			73,266

Property, Plant and Equipment, net of accumulated depreciation of $26,408 and $20,070 at March 31, 2013 and June 30, 2012, respectively		18,335			24,673
Deposits		8,181			8,181
Total non-current assets		26,516			32,854

TOTAL ASSETS	$	84,334		$	106,120

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable and accrued liabilities	$	115,083		$	127,511
Accounts payable - related party		903,120			585,149
Short-term convertible notes payable		-			42,639
Derivative liability		-			22,371
Total current liabilities		1,018,203			777,670

TOTAL LIABILITIES		1,018,203			777,670

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock - $0.10 par value: 25,000,000 shares authorized; none issued and outstanding at March 31, 2013 and June 30, 2012		-			-
Common stock, $0.001 par value; 100 million shares authorized, 36,656,006 and 35,154,006 shares issued and outstanding at March 31, 2013 and June 30, 2012, respectively		36,656			35,154
Additional paid in capital		3,897,989			3,400,484
Common stock committed		308,311			50,000
Deficit accumulated before re-entry to the development stage		(4,089,763	)		(4,089,763	)
Deficit accumulated during the development stage		(1,087,063	)		(67,425	)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(933,870	)		(671,550	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	84,334		$	106,120

The accompanying notes are integral to these financial statements.

TABLE OF CONTENTS

ENERGY HOLDINGS INTERNATIONAL, INC.

(A Development Stage Enterprise)

CONSOLIDATED RESULTS OF OPERATIONS

(Unaudited)

	Nine Months Ended March 31,						Three Months Ended March 31,						From Re-Entry to the Development Stage (04/01/12) to
	2013			2012			2013			2012			3/31/13
REVENUES
Consulting revenues	$	-		$	-		$	-		$	-		$	-
TOTAL REVENUES		-			-			-			-			-

OPERATING EXPENSES
General and administrative expenses		996,334			1,480,255			359,951			621,657			1,058,254
Depreciation		6,338			6,338			2,112			2,112			8,451
Total operating expenses		1,002,672			1,486,593			362,063			623,769			1,066,705
NET LOSS FROM OPERATIONS		(1,002,672	)		(1,486,593	)		(362,063	)		(623,769	)		(1,066,705	)

OTHER INCOME/(EXPENSE)
Change in fair value of derivative liability		(1,476	)		-			-			-			(1,298	)
Gain (loss) on debt extinguishment		(7,447	)		194,000			-			-			(7,447	)
Interest expense		(8,060	)		(20,226	)		(973	)		(939	)		(11,640	)
Interest income		17			27			4			12			27
Total other income/(expense)		(16,966	)		173,801			(969	)		(927	)		(20,358	)
Net loss	$	(1,019,638	)	$	(1,312,792	)	$	(363,032	)	$	(624,696	)	$	(1,087,063	)

Net loss per share - basic and diluted	$	(0.03	)	$	(0.04	)	$	(0.01	)	$	(0.02	)
Weighted average number of shares outstanding		35,469,225			33,277,719			35,607,517			34,194,885

The accompanying notes are integral to these financial statements.

TABLE OF CONTENTS

ENERGY HOLDINGS INTERNATIONAL, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common Stock				Additional Paid In		Common Stock		Develop. Stage			Pre-Develop. Stage			Total Stockholders' Equity
	Shares		Par Value		Capital		Payable		Deficit			Deficit			(Deficit)

Balance at April 1, 2012		35,054,006	$	35,054	$	3,393,084	$	50,000	$	-		$	(4,089,763	)	$	(611,625	)

Shares issued for:
Services		100,000		100		7,400										7,500
Net loss										(67,425	)					(67,425	)
Balance at June 30, 2012		35,154,006	$	35,154	$	3,400,484	$	50,000	$	(67,425	)	$	(4,089,763	)	$	(671,550	)

Shares issued for:
Cash		677,000		677		426,323										427,000
Services		825,000		825		47,335										48,160
Extinguishment of derivative liability at fair value						23,847										23,847
Cash received for stock payable								258,311								258,311
Net loss										(1,019,638	)					(1,019,638	)
Balance at March 31, 2013		36,656,006	$	36,656	$	3,897,989	$	308,311	$	(1,087,063	)	$	(4,089,763	)	$	(933,870	)

The accompanying notes are integral to these financial statements.

TABLE OF CONTENTS

ENERGY HOLDINGS INTERNATIONAL, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended March 31,						From Re-Entry to the Development Stage (04/01/12) to
	2013			2012			3/31/13

CASH FLOWS FROM OPERATING ACTIVITIES
Net income / (loss)	$	(1,019,638	)	$	(1,312,832	)	$	(1,087,063	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		6,338			6,338			8,451
Amortization of debt discount		-			15,620			-
Change in fair value of derivative		1,476			-			23,847

Gain on debt extinguishment		-			(194,000	)
Stock-based compensation		48,160			266,500			(41,340	)

Change in operating assets and liabilities:
Deposits, prepaid expenses and other current assets		(3,798	)		(21,608	)		(791	)
Accounts payable and accrued liabilities		(18,567	)		(78,061	)		57,852
Related party payables		317,947			443,764			200,261
Compensating balance restriction		40,068			(27	)		40,057

Net cash used in operations		(628,014	)		(874,306	)		(798,726	)

CASH FLOWS FROM INVESTING ACTIVITIES
Sale of equity interest in subsidiary		-			-			-

Net cash provided by (used in) investing activities		-			-			-

CASH FLOWS FROM FINANCING ACTIVITIES
Related party cash contributions		29,737			-			29,737
Sales of common stock		427,000			-			427,000
Common stock committed for cash		258,311			-			258,311
Notes payable - payments		(36,500	)		-			(36,500	)
Sale of equity interest in subsidiary		-			998,616			-
Reclassification of derivative liability to equity		-			-			5,952
Expenses paid by related party		83,158			-			83,158
Related party expense reimbursements		(112,870	)		-			(112,870	)

Net cash provided by/(used in) financing activities		648,836			998,616			654,788

Net change in cash and equivalents		20,822			124,310			(143,938	)
Cash and equivalents, beginning of period		10,514			50,964			175,274
Cash and equivalents, end of period	$	31,336		$	175,274		$	31,336

The accompanying notes are integral to these financial statements.

TABLE OF CONTENTS

ENERGY HOLDINGS INTERNATIONAL, INC.

(A Development Stage Enterprise)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Continued)

	Nine Months Ended March 31,				From Re-Entry to the Development Stage (04/01/12) to
	2013		2012		3/31/13

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest		-		-		-
Cash paid for income taxes		-		-		-

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
Common stock issued for conversion of convertible note		-		6,000		6,000
Common stock issued for outstanding stock commitment		-		140,000		-
Adjustment to derivative liability due to debt conversion		23,847		-		5,952
Reduction in common stock payable due to issuance of shares		-		-		140,000
Common stock issued for settlement of debt and deferred revenue balance		-		-		120,975

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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 consolidated the accounts of EHII MENA, a firm in Dubai, United Arab Emirates, into its financial statements.

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, 2012 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, 2013 or June 30, 2012. At June 30, 2012, we had $40,068 on deposit with a financial institution as a compensating balance to cover our usage of credit cards for travel. However, during the nine months ended March 31, 2013, these funds were released to us for general use.

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.

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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.

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.

At June 30, 2012, we had a derivative liability of $22,371 included as a level 3 liability and none at March 31, 2013. See Note 4 for a discussion of this derivative liability. The following table shows changes in the fair value of liabilities associated with financial instruments valued on a recurring basis:

	Level 1		Level 2		Level 3
Derivative liability at June 30, 2012	$	-	$	-	$	22,371
Mark to market at September 25, 2012 (loss)		-		-		1,476
Fair value of derivative on date of extinguishment		-		-		23,847
Redemption of convertible note		-		-		(23,847	)
Derivative liability at March 31, 2013	$	-	$	-	$	-

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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.

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 of $1,019,638 for the nine months ended March 31, 2013, accumulated deficits of 5,176,826 as of March 31, 2013 and negative working capital of $960,385 and $704,404 at March 31, 2013 and June 30, 2012 respectively.

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.

NOTE 3. RELATED PARTY TRANSACTIONS

At March 31, 2013, we owed $645,935 in salaries and $17,398 in advances to our Chief Executive Officer, John Adair and our Chief Financial Officer, Jalal Alghani. At June 30, 2012, these amounts were $405,488 and $43,290, respectively.

In addition, at March 31, 2013 we owed certain other related parties who work as consultants to the Company $210,500 in salaries and $29,287 in advances to the Company. These amounts at June 30, 2012 were $133,000 and $3,370, respectively.

NOTE 4. COMMON STOCK AND CAPITAL STRUCTURE

Common Stock

At April 1, 2012 (the date of re-entry to the development stage), we had 35,054,006 shares issued and outstanding.

During the period ended June 30, 2012, we issued 100,000 shares to two consultants for services. We valued the shares at their respective closing prices on their grant dates, charging general and administrative expenses with $7,500.

During the nine months ended March 31, 2013:

●	We issued 677,000 shares for cash, raising $427,000 in operating capital

●	We issued 825,000 shares to consultant and directors for services. We valued the shares at their grant date fair values and charged general and administrative expense collectively with $48,160.

●

We entered into a subscription agreement with an accredited investor in Saudi Arabia to sell 500,000 shares for $1 per share. We received 948,936 UAE Dirhams (US $258,311) as an advance against this subscription. Since we will issue the shares only when all of the subscription is paid in full, we recorded the cash receipt as a stock payable.

Convertible Securities Outstanding

At September 30, 2011 we had outstanding 500,000 warrants issued in connection with our March 1, 2011consulting agreement. The warrants expired March 1, 2012. There were no options or warrants issued during the nine months ended March 31, 2013. Options and warrants outstanding at March 31, 2013 is nil.

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At June 30, 2012, we had a $36,500 in unpaid principal and $6,139 of unpaid accrued interest related to a convertible promissory note which could be converted beginning October 4, 2011 into common stock at 58% of the lowest three days’ closing prices of the 10 days previous to the conversion. On September 25, 2012, we paid this note in its entirety, extinguishing all principal, interest and derivative liabilities associated with this instrument. The derivative liability in the amount of $23,847 was recorded as additional paid in capital (see Note 5).

On January 18, 2012, we entered into an agreement with an accredited investor in Saudi Arabia to provide $1 million in cash for operating capital. As part of that agreement, we agreed to issue the investor 1 million common shares. In addition to these shares, we agreed to provide an option to acquire 10% of the equity of our subsidiary that will be formed to own and operate the two 225 megawatt power plants in Bangladesh. The option is exercisable only upon financial close of the Bangladesh project (defined as the point in time when the financial commitments needed to fund the project are placed into escrow and the project is considered fully funded). Once the option becomes exercisable, the option holder has 60 days to exercise the option by rendering 10% of the cash equity requirements. For example, if the project requires a total of $40 million to fund the power plants, and we are successful at raising 75% (or $30 million) through debt offerings, then this option holder may acquire a 10% interest in the subsidiary by rendering $1 million ($40 million times (100% minus 75%, or 25%) times 10% equity requirement. Since this option is not exercisable until financial close, we deemed it to have no value as the contingency has not been resolved.

NOTE 5. DERIVATIVE LIABILITY

On April 7, 2011, we issued a $42,500 convertible promissory note for $42,500 in cash. The note could be converted beginning October 4, 2011 into common stock at 58% of the lowest three days’ closing prices of the 10 days previous to the conversion.

Because of the number of shares are not determinable, and because those shares issuable upon conversion taint the 500,000 warrants outstanding, we recorded a derivative liability at June 30, 2011 of $119,643.

During the year ended June 30, 2012, the 500,000 warrants expired. We therefore reduced the derivative liability at June 30, 2012 to $22,371, reflecting only the beneficial conversion feature of the $42,500 convertible promissory note. We used the Lattice model to value this liability whose inputs are discussed in Note 9 to our Annual Report as of June 30, 2012, filed October 15, 2012 and are herein incorporated by reference.

At September 25, 2012 (the date the convertible promissory note was paid, extinguishing the liabilities), the fair value of the derivative was $23,847 using the following assumptions:

The following assumptions were used in valuing the derivative liability at September 25, 2012 (the date the convertible note was extinguished), using the Lattice model:

●	Volatility ranged from 217% to 465%;

●	The risk free rate ranged from 0.12% to 0.10%; and

●	The conversion date is estimated as the maturity date.

The following assumptions were used in valuing the derivative liability using the Lattice model associated with the Convertible Promissory Note of September 30, 2011, December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012:

●	The stock price would fluctuate with the Company projected volatility;

●	Risk of default was reduced to zero percent;

●	The projected volatility curve for each valuation period was based on the average of 16 comparable Oil/Gas/Energy companies for historical volatility. Volatilities used in the 2012 valuations ranged from 217% to 465%.

●	Alternative financing for the Convertible Note would be initially available to redeem the note 0% of the time and increase monthly by 1% to a maximum of 10%;

●	The trading volume limits would be based on the greater of the monthly averages for the last 6 months or $50,000 per month and would increase at 1% per month; and

●	The Holders would automatically convert the notes at the greater of 2 times the conversion price or stock price if the registration was effective and the company was not in default.

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The following table shows changes in our derivative liability from April 1, 2012 (the date of re-entry to the development stage) and March 31, 2013.

	4/1/12 to 6/30/12			7/1/12 to 3/31/13

Derivative liability, beginning of period	$	22,549		$	22,371
Revaluation of liability during the period		(178	)		1,476
Extinguishment of liability resulting from note redemption					(23,847	)
Derivative liability, end of period	$	22,371		$	-

NOTE 6. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date these financial statements were issued.

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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/A. 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.

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 (281) 617-7198. The Company’s website is www.energhii.com.

Results of Operations

For the Nine months ended March 31, 2013 and 2012

Net Loss. We had a net loss of $1,019,638 for the nine months ended March 31, 2013, versus a loss of $1,312,792 for the same period in 2012. This 22% decrease (or $293,154) in loss is primarily a net of two large changes from the previous year: a decrease in operating expenses (principally decreases in consulting fees) and a change in gains and losses from extinguishment of debt.

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Operating Expenses. General and administrative expenses are significantly lower for the nine months ended March 31, 2013 versus the same period last year ($996,334 versus $1,480,255) principally due to lower compensation costs.

Our depreciation expense was identical in the current period as in the previous period ($6,338 for the nine months ended March 31, 2013 and 2012) since our assets are depreciated using the straight-line method, causing no change in depreciation.

Other Income and Expense Items. This item was a net addition to our net loss for the nine months ended March 31, 2013 (a net expense of $16,966) versus a net subtraction from our net loss of $173,801 for the nine months ended March 31, 2012, owing principally to our recording a gain on extinguishment of debts in the previous year.

For the Three Months Ended March 31, 2013 and 2012

Net Loss. We had a net loss of $363,032 for the three months ended March 31, 2013, versus a loss of $621,657 for the same period in 2012, for a decrease of $261,664, or 42% over the previous year. This decrease in loss is primarily a net of two large changes from the previous year: a decrease in operating expenses (principally decreases in consulting fees) and a change in gains and losses from extinguishment of debt.

Operating Expenses. General and administrative expenses are significantly lower for the three months ended March 31, 2013 versus the same period last year ($359,951 versus $621,657) principally due to lower compensation costs.

Our depreciation expense was identical in the current period as in the previous period ($2,112 for the three months ended March 31, 2013 and 2012) since our assets are depreciated using the straight-line method, causing no change in depreciation.

Other Income and Expense Items. This item was a net addition to our net loss for the three months ended March 31, 2013 and 2012 ($969 and $927, respectively). It is comprised of interest expense and interest income. The two quarters ended March 31, 2013 and 2012 are almost identical because the underlying debts on which interest is calculated have remained relatively stable in those periods.

Liquidity and Capital Resources

As of March 31, 2013 and June 30, 2012, we had $31,336 and $10,514, respectively, of unrestricted cash.

For the nine months ended March 31, 2013, we used $628,014 in operating activities, compared to a use of $874,306 for the same period in the previous year.

We had no cash flows from investing activities during either nine-month period.

For the nine months ended March 31, 2013, net cash provided by financing activities was $648,836 versus $998,616 for the same period in the previous year. In the previous year we have proceeds from the sale of equity in our yet-to-be-formed subsidiary of $998,616 which we did not have in the current year. In the current year however, our cash inflows from financing activities included $29,737 of related-party cash contributions, $427,000 of sales of common stock, $258,311 of cash received for future issuances of common stock and $83,158 of expenses paid by related parties. We also had outflows from financing activities that include principal payments on notes payable of $36,500 and related-party expense reimbursements of $112,870.

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.

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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.

This conclusion is based upon material weaknesses relating to the lack of segregation of duties in financial reporting, as accounting functions in Dubai are performed by individuals lacking appropriate oversight by those with accounting and financial reporting expertise. The officers of the Company do not possess accounting expertise and our company does not have an audit committee. This weakness is due to the company’s lack of working capital to hire additional staff. To remedy this material weakness, management is considering hiring additional staff or outsourcing some or all of the Company’s accounting functions to those with the appropriate level of accounting expertise.

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.

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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, 2013, we had cash of $31,336. 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. 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 36,656,006 shares were issued and outstanding as of March 31, 2013. 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.

See Note 8 to our Financial Statements filed on Form 10-K as of June 30, 2012 for a discussion of unregistered sales of equity securities prior to July 1, 2012, the first day of our current fiscal year.

During the nine months ended March 31, 2013:

●	We issued 677,000 shares for cash, raising $427,000 in operating capital

●	We issued 825,000 shares to consultant and directors for services. We valued the shares at their grant date fair values and charged general and administrative expense collectively with $48,160.

●

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None

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ITEM 6. EXHIBITS

Exhibits

3.1	Articles of Incorporation
3.1.1	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*	Bylaws
21 *	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 and Exchange 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 2002
32.2**	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 herewith

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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 15, 2013.

	ENERGY HOLDING INTERNATIONAL, INC.

May 15, 2013	By:	/s/ John Adair
		John Adair,
		Chairman, Chief Executive Officer and President

May 15, 2013	By:	/s/ Jalal Al Ghani
		Jalal Al Ghani,
		Director and Chief Financial Officer

Attached files

ENERGY HOLDINGS INTERNATIONAL, INC. Reports

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