The following discussion contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. The actual results could differ materially from those described herein.

Tri-Tech Holding Inc. (the "Company" or "we") is a leading provider of integrated solutions, products and technologies to water resource management and environmental protection industries. The Company has successfullyimplemented projects in both Chinese and overseas markets such as India, the Middle East and North America.

The Company aims to provide tailored solutions to complex environmental challenges faced by both public and private sectors in China and beyond. Its clientele consists of a combination of government agencies, municipalities, and industrial entities located in China, India, the Middle East and North America. To maintain a leading position in its domestic market, the Company's strategy is to reinforce customer recognition and to offer diversified proprietary products to exceed the expectations of its expanding client base. Internationally, the Company also continues to further its geographic reach in India, the Middle East and North America in the water and wastewater treatment industry. To implement the three engineering-procurement-construction contracts in India and to develop market further, the Company made a capital injection in the amount of Indian National Rupee ("INR") 1,917,000 (or $35,273), in Tri-Tech Infrastructure
(India) Pvt., Ltd ("TII") on May 19, 2012. As a result of the capital injection, the Company increased its equity ownership in TII to 76% and became the controlling shareholder. The Company's total investment in TII amounts to INR 2,217,000, or $55,886. The amount consists of two parts: the initial investment of INR 300,000 on October 19, 2011, which was adjusted to $20,613 due to TII's earnings from the beginning of TII's operation through May 19, 2012; and the investment of INR 1,917,000, or $35,273, on May 19, 2012.

The Company's principal executive offices are located at the 16th Floor of Tower B, Renji Plaza, 101 Jingshun Road, Chaoyang District, Beijing 100102 China. The telephone number at this address is +86 (10) 5732-3666. Its ordinary shares are traded on the NASDAQ Capital Market under the symbol "TRIT." The Company's website, www.tri-tech.cn, provides a variety of information. Its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the United States Securities and Exchange Commission (the "SEC") are available, as soon as practicable after filing, under the investor relations tab on its website, or by a direct link to its filings on the SEC's website.

Principal Products, Services and Their Markets

The Company operates in three segments: (i) Water, Wastewater Treatment and Municipal Infrastructure ("WWTM"), (ii) Water Resource Management System and Engineering Services ("WRME"), and (iii) Industrial Pollution Control and Safety ("IPCS"). Through its subsidiaries, variable interest entities ("VIE") and joint venture partnership, the Company provides proprietary and third-party products, integrated systems and other services forthe purposes of water resource monitoring, development, utilization and protection. The Company designs water works and customized facilities for reclaiming and reusing water and sewage treatment for China's municipalities. These systems integrate process equipment, software, controls and instruments, information management systems, resource planning and local and distant networking hardware that includes sensors, control systems, programmable logic controllers, and supervisory control and data collection systems. The Company designs systems that track natural waterway levels for flood and drought control, monitor groundwater quality, manage water resources and irrigation systems. It also provides systems for volatile organic compound ("VOC") abatement, odor control, water and wastewater treatment, water recycling facilities design, project engineering, procurement and construction for petroleum refineries, petrochemical and power plants as well as safe and clean production technologies for oil and gas field exploration and pipelines. With the acquisitions of J&Y International Inc. ("J&Y") and Beijing Huaxia Yuanjie Water Technology Co., Ltd ("Yuanjie"), the Company expanded its product lines by adding thermal seawater desalination systems, zero liquid discharge ("ZLD") systems, and secondary water supply systems targeting high-rise buildings.

Core Technologies and Solutions

ZLD Solution for Industrial Wastewater Treatment. The ZLD systems provide an optimal solution for wastewater treatment as no liquid pollutants are discharged into the environment and water is completely recycled. Solid by-products can be produced by treating wastewater with liquid evaporation concentration (mechanical vapor compression-horizontal spraying film evaporator) and crystallization (forced circulation crystallization system), which are key components of the ZLD solution. The Company can tailor ZLD solutions to its customers' individual needs and requirements, and ensure reliability of technology and stability of system operation. Besides desalination, the technologies can also be used to treat high-concentration wastewater such as landfill leachate and high-salinity wastewater. The industries and companies served by the technologies include oil and gas exploration companies, petrochemical refineries and fertilizer plants, coal-fired and thermal power plants, pulp and paper mills, municipal water treatment facilities, and pharmaceutical and food-processing companies.

Seawater Desalination Solution. There is a growing market for the business of seawater desalination due to fresh water resource shortage. The Company is capable of providing tailored seawater desalination solutions for different types of customers. These solutions include the thermal seawater desalination technology featuring low temperature multi-effect evaporation and multi-flash evaporation, typically for projects with easy access to low-cost heat source such as superheated vapor and hot liquid, and the membrane seawater desalination technology for projects with easy access to cheap electrical power. The Company also specializes in small skid-mounted seawater desalination units such as the mechanical vapor compression-spraying film evaporator.

VOC Treatment. In the industrial production process, some plants produce large volumes of volatile organic gases that are hazardous to the environment if discharged untreated. The Company's thermal oxidation technology thoroughly treats these toxic, harmful and non-recyclable organic waste gases. The Company developed different thermal oxidation technologies such as regenerative thermal oxidizer, thermal oxidizer, regenerative catalytic oxidizer and catalytic oxidizer based on specific parameters for different waste gases.

Forward Osmosis Technology. The forward osmosis technology can turn muddy contaminated water into pure and potable water. It can also be used to treat industrial wastewater which contains toxic wastes that are not readily degradable. The Company's products do not have the clogging or fouling problems seen in the reverse osmosis technology.

Flash Flood Disaster Warning Information Dissemination System. The disaster warning information dissemination platform is part of the flash flood monitoring and warning system. As the center of information distribution, it is the most important part of the integrated system. The platform timely and accurately transmits disaster warning information to areas threatened by flash flood through early warning programs and channels which receive instructions from county-level flood control offices, allowing recipients to take necessary precautionary measures to minimize casualties and property losses. The platform can be used to receive feedback from early warning stations to monitor the effectiveness of information dissemination.

Business Segments

The Company's business segments are grouped according to the types of services provided and the types of clients served. The total sales and costs are divided into three segments accordingly. The Company assesses each segment's performance based on net revenue and gross profit on contribution margin. More detailed descriptions of the three reportable operating segments follow:

Segment 1: Water, Wastewater Treatment and Municipal Infrastructure ("WWTM")

WWTM focuses on municipal water supply and distribution, wastewater treatment and gray water recycling, through the procurement and construction of proprietary build-transfer-operation ("BTO") processing equipment and processing control systems. The Company also provides municipal facilities engineering and operation management services for related infrastructure construction projects. This segment has historically provided the majority of its contract revenues. Representative projects in the China market include the expansion phase of the water treatment plant for the City of Ordos valued at approximately $20 million, which started in June 2011 and is expected to be completed by the end of 2012, and the recycled water quality upgrade project for Tianjin Airport Economic Zone with a total contract value of $1.46 million, which started in June 2011 and is expected to be operational by the end of 2012. Representative international projects include three Indian engineering-procurement-construction ("EPC") contracts for sewage collection and treatment plants in three municipalities with a total contract value of $39 million, which started in November 2011 and are expected to be completed by the end of 2013.

Segment 2: Water Resource Management System and Engineering Service ("WRME")

WRME involves projects relating to water resource management, flood control and forecasting, irrigation systems, and similar ventures through system integration of proprietary and third-party hardware and software products. For government agencies, the Company designs systems that track natural waterway levels for drought control, monitor groundwater quality, and generally manage water resources and irrigation systems. Representative projects include flash flood early warning and hydrologic monitoring projects for multiple counties in Heilongjiang, Fujian, Guizhou, Anhui and Shanxi provinces, with a total contract value of $7.02 million, which commenced in April of 2012 and are expected to be completed at different points in time from October to November, 2012.

Segment 3: Industrial Pollution Control and Safety ("IPCS")

IPCS focuses on industrial water, wastewater treatment and seawater desalination for industrial production and pollution control in the petroleum and power industries applying a variety of technologies such as ZLD, multi-effect evaporation, multi-flash evaporation, as well as emissions control. Projects in this segment include traditional EPC of equipment and modules, and the operation and maintenance of industrial wastewater treatment plants. For petroleum refineries, petrochemical factories and power plants, the Company provides systematic solutions for volatile organic compound abatement, odor control, water and wastewater treatment, and water recycling. The Company also provides safe and clean production technologies for oil and gas field exploration and pipeline transportation. Representative projects include the Dawangdian Industrial Park wastewater plant and pipeline project in Xushui County of Hebei Province, with a total contract value of $7.9 million, which is expected to be delivered by November 2012; the seawater desalination project for the utility plant of Qatar Petrochemical Co. Ltd. in Qatar, with a contract value of $8.3 million, which started in December 2011 and is expected to be delivered by November 2012; the Wuhan natural gas distribution network control system project, with a contract value of $1.5 million, which began in January 2012 and is expected to be completed by May 2013; and the water processing unit project for a steel plant in Mexico to be completed and delivered by early April 2013.

Revenues by Segment

In the three months ended June 30, 2012, our total revenues were $23.0 million, including $8.3 million from Segment 1, $8.4 million from Segment 2, and $6.3 million from Segment 3. The table below shows the performance of each business segment for the second quarter of 2012. Segment 1 contributed 36.3% of the total revenues; Segment 2 contributed 36.6%; and Segment 3 contributed the remaining 27.1%.

                                                              Three Months Ended June 30, 2012
                     Segment 1:         %          Segment 2:         %          Segment 3:         %             Total:           %
System Integration   $ 8,354,428        100.0 %    $ 7,441,871         88.2 %    $ 5,945,471         95.1 %    $ 21,741,770         94.4 %
Hardware Products    $         -            - %    $   994,129         11.8 %    $   304,635          4.9 %    $  1,298,764          5.6 %
Software Products    $         -            - %    $         -            - %    $         -            - %    $          -            - %
Total Revenues       $ 8,354,428         36.3 %    $ 8,436,000         36.6 %    $ 6,250,106         27.1 %    $ 23,040,534          100 %

The following table provides revenue percentage for each segment and category for the six months ended June 30, 2012. The total revenues increased by 11.9% comparing with the same period in 2011.

                                                                Six Months Ended June 30, 2012
                      Segment 1:         %          Segment 2:         %           Segment 3:         %            Total:           %
System Integration   $ 16,761,401        100.0 %   $ 13,395,148         91.2 %    $ 10,117,883         93.6 %   $ 40,274,432         95.3 %
Hardware Products    $          -            - %   $  1,295,442          8.8 %    $    691,972          6.4 %   $  1,987,414          4.7 %
Software Products    $          -            - %   $          -            - %    $          -            - %   $          -           -  %
Total Revenues       $ 16,761,401         39.7 %   $ 14,690,590         34.8 %    $ 10,809,855         25.5 %   $ 42,261,846          100 %

Backlog and Pipeline for 2012

The Company's backlog represents the amount of contract work remaining to be completed, that is, revenues from existing contracts and work in progress expected to be recorded in 2012 and onwards, based on the assumption that these projects will be completed on time according to the project schedules. As of June 30, 2012, the Company had a total backlog of $79.2 million, including $41.9 million in Segment 1, $12.2 million in Segment 2 and $25.1 million in Segment 3.

As of June 30, 2012, the Company expected potential projects in the pipeline with a total contract value of $152.2 million, of which approximately $89.7 million is in Segment 1, $23.1 million in Segment 2, and $39.4 million in Segment 3.

With a strong backlog, the Company anticipates that its revenues will reach a range between $103 million and $128 million, and its net income between $9.7 million and $12.1 million, in 2012.

Operational Results Overview and Business Trends

General

China experienced slower growth during the second quarter of 2012. To soften the impact of the lowered growth rate, China has made adjustments in government sponsored investments in infrastructures, which decreased market demand for our products and services. The weakened demand, combined with the increasing costs of financing, labor and raw materials, presented unprecedented challenges to our sales. However, the Company was able to secure a moderate growth under the circumstances.

To address the slowing growth rate without compromising its environmental initiatives, the Chinese government recently issued several key environment development programs in fields such as water conservancy, energy conservation, urban water supply, water treatment and seawater desalination. At a macro level, the government has pushed through specific policies to loosen monetary constrains, to reduce taxes and to increase investment on key projects to stabilize the economic growth.

To address the challenges, the Company focused on its profitability through enhancing its cost efficiencies. On the other hand, it emphasized strategic developments in markets where its core technologies have a competitive advantage against its competitors. In the meantime, the Company continued its efforts to develop its overseas market shares in water and waste water treatment sector to optimize the revenue growth of its portfolio.

In general, the Company expects the market demand of the overall industry to continue its stable growth in the next few quarters. The company anticipates a moderate growth through maximizing its income and minimizing its costs and expenses.

Segment 1: Water, Wastewater Treatment and Municipal Infrastructure

During the second quarter, revenue from our WWTM segment decreased by 50.2% compared to the same period last year. The decline was primarily due to the delay in execution of the expansion phase of Ordos Water Treatment Plant and three India Bihar Sewage System projects. In the second quarter, we nearly completed the civil construction and equipment procurement for the expansion phase of the Ordos project, when partial equipment has been delivered to the project site and the equipment installation has started. The India Bihar project made some progress in the second quarter, nearly completing the investigation of proposed sewerage pipe network and sewage treatment plants, soil testing, pipeline design and engineering of sewerage treatment plants. However, the overall project fell behind schedule. Currently, we are undergoing negotiation and inquiry of subcontracting and materials procurement. For the Tianjin Airport Economic Zone Wastewater Treatment Plant expansion project, we delivered part of the equipment such as pumps and conducted preparation work on project site. The Canada Jasper Lodge water treatment project was completed for a trial run. In addition, we made a recent breakthrough by winning a water quality testing equipment procurement contract for Water Quality Testing Center of Zhongwei City, Ningxia. The contract value totaled $1.78 million. We expect more success in marketing and bidding for water and wastewater treatment projects in the domestic and oversea markets and we expect our WWTM segment to continue its solid growth in the upcoming quarters.

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Segment 2: Water Resources Management Systems and Engineering Services

During the second quarter, sales from our WRME segment experienced a growth of 264.5%, compared to the same period last year. The significant increase was mainly attributable to the implementation of flash flood and small river hydrologic monitoring projects awarded in the second quarter and the execution of projects awarded in previous quarters. In the second quarter, the order backlog for the WRME segment continued to increase. We won $8.6 million flash flood and small river hydrologic monitoring contracts in six Chinese provinces, of which 70% are completed and part of the completed projects are in the stage of customer testing and acceptance. In mid-July, we were awarded $8.06 million contracts in flash flood and small river hydrologic monitoring projects in ten Chinese provinces and municipality.

In the upcoming quarters, we anticipate strong performance from our flash flood and hydrologic monitoring offerings as a result of the growing market demand. We are also focusing on the implementation of awarded projects out of the growing backlog. In addition, we will pursue opportunities in new business sectors such as information system upgrading for irrigation systems in China and overseas markets. In that regard, we recently won contracts worth $1.3 million for agricultural water conservation irrigation systems in Yelaman Township, Xinjiang.

Segment 3: Industrial Pollution Control and Safety

Our IPCS segment recorded a 459.2% increase of revenue during the second quarter of 2012 over the same period last year. The increase was mainly due to the implementation of the Dawangdian Industrial Park Wastewater Treatment project, the Qatar Seawater Desalination Unit project and the Mexico Steel Plant Wastewater Treatment project. Following the award of wastewater treatment plant construction project for the Dawangdian Industrial Park we were awarded a $5.5 million contract for wastewater pipeline network construction for the Dawangdian Industrial Park. Currently, we have completed the specific design of the Dawangdian project and have commenced the pipeline construction and equipment procurement. For the Qatar project, we have completed the majority of detailed engineering for the seawater desalination unit. For the water treatment project for the Mexico steel plant, we have submitted the engineering drawing to the customer for review and approval. For Wuhan Natural Gas High-Pressure Pipeline Co., we have completed the equipment procurement and system design for phases 1 and 2 of the automated control system project and started construction. For the South Yolotan-Osman project in Turkmenistan, we have completed the design for the security component and material orders for communication equipment. Next quarter, we will continue to expand our IPCS business in the China market, particularly in the thermal seawater desalination and zero liquid discharge technologies, which are our core strengths in industrial wastewater treatment. We anticipate sales from the segment to continue steady growth.

Strategies for Growth

Segment 1: Water, Wastewater Treatment and Municipal Infrastructure

For the WWTM segment, we will reinforce our leading position and continue to strengthen our core compatibility as an EPC contractor and BTO provider for municipal water treatment projects. Specifically, we will continue to develop water and wastewater treatment business in domestic market, focusing mainly on the construction and retrofit of municipal water and wastewater treatment facilities in small- to medium-sized cities in Central and West China. We will select projects with favorable payment terms and maintain tight controls over costs. Overseas, we will continue municipal project development in South Asia and North America to further diversify our customer base and optimize our revenue portfolio. In terms of our products, our main focus in the following quarters will be on research and development of membrane technology and products in municipal water and wastewater treatment field. To that end, we actively seek partnerships with leading European membrane products manufacturers and conduct research and development on the membrane treatment technology. Part of our research and development and manufacturing facilities in Baoding have started operation. Moreover, we will continue our domestic market development for forward osmosis membrane technology and explore the feasibility of applying forward osmosis membrane technology in industrial use. Lastly, we are looking at potential domestic acquisition opportunities emphasizing on proprietary membrane technologies. As a whole, we plan to further enhance our water and wastewater treatment technology by independent research and development, cooperative development, and mergers and acquisitions.

Segment 2: Water Resources Management Systems and Engineering Services

For the WRME business segment, we will continue to expand our market share in flash flood and small river hydrologic monitoring. We will closely monitor market demands driven by the government policies and fund allocation. We have launched market survey and preparing several water resources management programs such as national water resources monitoring program and irrigation area information system program. We intend to capture a larger market share by partnering with international leading water conservancy information solution providers and importing competitive technologies from overseas. In addition, we are expanding the WRME business to the South Asian market. Starting in the second quarter of fiscal 2012, we have participated in several project biddings there.

Segment 3: Industrial Pollution Control and Safety

In the IPCS segment, we are refocusing on domestic market development. We conducted pilot testing of specialties industrial wastewater ZLD and thermal seawater desalination technologies and accelerated the commercialization of core technologies in the China market, prioritizing especially on the petrochemical industry. We believe higher effluent standards emphasizing on resource recovery and lower energy consumption present vast market opportunities. Moreover, we continue to explore the application of membrane technology in industrial wastewater treatment, through research and development and introduction of the technology to municipal governments. Overseas, we continue to undertake cutting-edge projects of industrial wastewater ZLD and thermal seawater desalination. Our competitive pricing structure, reliable operation and lower energy consumption enable us to compete effectively with international peers.

Funding for Continuous Growth

Funding is critical to maintaining our growth momentum, especially as we explore potential projects using the BTO business model. We are actively working with local Chinese banks to secure financial support. We renewed the credit line with Bank of Hangzhou totaling $12.7 million. In September 2011, we secured a credit line of $9.6 million from CITIC Bank. We also secured credit lines of $6.4 million and $2.4 million from ICBC Bank in February 2012 in June 2012, respectively, the latter of which was currently used to fund our payment to suppliers. Our total credit line from ICBC therefore amounted to 8.8 million. These credit lines provide us the liquidity to expand and grow our operations in a non-dilutive manner, to increase our financial flexibility and to optimize the efficiency of our capital structure. We also explore other project finance approaches to dovetail our BTO business model.

Competition

We operate in a highly competitive industry characterized by rapid technological development and evolving industrial standards. Given the stimulus initiatives in China, we expect the competition to intensify as more companies enter the market, notwithstanding relatively high barriers to entry in the need for technical expertise and funding.

We compete primarily on the basis of customer recognition, industry reputation, product innovation and a competitive pricing structure. Through mergers and acquisitions, we are able to offer advanced technologies at an attractive price when competing with domestic and international rivals. Due to our nationwide distribution and customer service network and knowledge of the local market, we enjoy an advantage in China over international competitors who typically appoint only one distributor in the Chinese market responsible for selling and servicing their products. In addition, we provide a more comprehensive set of products than most of our international or local competitors. If competition in the industry intensifies, we may see these advantages decrease or disappear. In order to maintain and enhance our competitive advantage, we must continue to focus on competitive pricing, technological innovation, market trends, as well as improvement in proprietary products.

Although we believe our competitive strengths provide us with advantages over many of our competitors, some of our international rivals have better brand recognition, longer operating histories, longer or more established relationships with their customers, stronger research and development . . .