Ocean Thermal Energy Corp - FORM 10-K/A

Attached files

file	filename
EX-32.01 - Ocean Thermal Energy Corp	ex3201ka123109.htm
EX-31.01 - Ocean Thermal Energy Corp	ex3101ka123109.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009

Commission File Number 033-19411-C

TETRIDYN SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)

Nevada	20-5081381
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1651 Alvin Ricken Drive
Pocatello, ID	83201
(Address of principal executive offices)	(Zip Code)

208-232-4200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each exchange on which registered
n/a	n/a

Securities registered pursuant to Section 12(g) of the Act:
n/a
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨

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

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	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

State the aggregate market value of the voting and nonvoting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. As of June 30, 2009, the aggregate market value of the voting and nonvoting common equity held by nonaffiliates of the registrant was $940,837.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of March 30, 2010, issuer had 21,881,863 shares of issued and outstanding common stock, par value $0.001.

DOCUMENTS INCORPORATED BY REFERENCE: None.

PART II

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements, including the Report of Independent Registered Public Accounting Firm on our consolidated financial statements, are included beginning on page F-1 of this report, immediately following the signature page and supplemental information.

ITEM 9A(T). CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to in this periodic report as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our management evaluated, with the participation of our Certifying Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2009, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of December 31, 2009, our disclosure controls and procedures were effective at the reasonable assurance level.

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There has been no change in our internal control over financial reporting during the year ended December 31, 2009, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our Certifying Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Our Certifying Officer conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, he concluded that our internal control over financial reporting was effective as of December 31, 2009.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit Number*	Title of Document	Location

Item 3.	Articles of Incorporation and Bylaws
3.01	Articles of Incorporation of TetriDyn Solutions, Inc. dated May 15, 2006	Incorporated by reference from the current report on Form 8-K filed June 7, 2006.
3.02	Bylaws of TetriDyn Solutions, Inc. adopted May 26, 2006	Incorporated by reference from the current report on Form 8-K filed June 7, 2006.
3.03	Designation of Rights, Privileges, and Preferences of Series A Preferred Stock	Incorporated by reference from the annual report on Form 10-K filed March 31, 2010.

Item 4.	Instruments Defining the Rights of Security Holders, Including Debentures
4.01	Specimen stock certificate	Incorporated by reference from the current report on Form 8-K filed June 7, 2006.

Item 10.	Material Contracts
10.01	Technology License Agreement, effective October 16, 2001, by Bechtel B WXT Idaho, LLC, and TetriDyn Solutions, Inc.	Incorporated by reference from the current report on Form 8-K filed March 28, 2006.
10.02	Lease Document between Idaho State University and TetriDyn Solutions, Inc. dated September 1, 2004	Incorporated by reference from the current report on Form 8-K filed March 28, 2006.
10.03	Employment Agreement between TetriDyn Solutions, Inc. and David W. Hempstead dated January 21, 2006**	Incorporated by reference from the current report on Form 8-K filed March 28, 2006.
10.04	Employment Agreement between TetriDyn Solutions, Inc. and Antoinette R. Knapp dated January 21, 2006**	Incorporated by reference from the current report on Form 8-K filed March 28, 2006.
10.05	Debt Resolution Agreement between TetriDyn Solutions, Inc. and David W. Hempstead signed April 24, 2007	Incorporated by reference from the current report on Form 8-K filed April 27, 2007.
10.06	Amendment dated October 9, 2009, to Consulting Agreement dated July 17, 2007, with Southfork Solutions, Inc., also included	Incorporated by reference from the quarterly report on Form 10-Q for the quarter ended September 30, 2009, filed November 10, 2009.

Exhibit Number*	Title of Document	Location
10.07	Loan Agreement between TetriDyn Solutions, Inc., and Southeast Idaho Council of Governments, Inc., together with related promissory notes, dated December 23, 2009	Incorporated by reference from the annual report on Form 10-K filed March 31, 2010.
Item 14.	Code of Ethics
14.01	TetriDyn Solutions, Inc., Code of Ethics	Incorporated by reference from the annual report on Form 10-KSB for the year ended December 31, 2006, filed April 2, 2007.

Item 16.	Letter on Change of Certifying Accountant
16.01	Letter from Hansen, Barnett & Maxwell to Securities and Exchange Commission	Incorporated by reference from the current report on Form 8-K filed January 22, 2007.

Item 21.	Subsidiaries of the Small Business Issuer
21.01	Schedule of subsidiaries	Incorporated by reference from the annual report on Form 10-KSB filed March 31, 2008.

Item 31.	Rule 13a-14(a)/15d-14(a) Certifications
31.01	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14	This filing.

Item 32.	Section 1350 Certifications
32.01	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This filing.

_______________

The number preceding the decimal indicates the applicable SEC reference number in Item 601, and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed with the SEC as exhibits to previous filings, but no longer required.

**	Identifies each management contract or compensatory plan or arrangement required to be filed as an exhibit, as required by Item 15(a)(3) of Form 10-K.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TETRIDYN SOLUTIONS, INC.


Date: October 22, 2010	By:	/s/David W. Hempstead
		David W. Hempstead, President

TETRIDYN SOLUTIONS, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

AND

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 and 2008

TETRIDYN SOLUTIONS, INC.

INDEX TO FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets – December 31, 2009 and December 31, 2008	F-2

Consolidated Statements of Operations for the Years Ended December 31, 2009 and 2008	F-3

Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2009 and 2008	F-4

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009 and 2008	F-5

Notes to Consolidated Financial Statements for the Years Ended December 31, 2009 and 2008	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:

TetriDyn Solutions, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of TetriDyn Solutions, Inc. and Subsidiaries (the “Company”) as of December 31, 2009 and December 31, 2008 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows (restated) for the two years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly in all material respects, the financial position of TetriDyn Solutions, Inc. and Subsidiaries (the “Company”) as of December 31, 2009 and December 31, 2008 and the results of its operations and its cash flows (restated) for the two years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company had a net loss from continuing operations of $378,120 and used $248,544 of cash in operating activities for the year ended December 31, 2009. The Company had a working capital deficiency of $154,335 and a stockholders’ deficiency of $431,147 as of December 31, 2009. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

WEBB & COMPANY, P.A.

Certified Public Accountants

/s/ Webb & Company, P.A.

Boynton Beach, Florida

March 29, 2010, except for Note 1, to
which the date is October 21, 2010

F-1

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

		December 31,	December 31,
		2009	2008
ASSETS
Current Assets
Cash		$ 123,784	$ 77,914
Accounts receivable, current portion		132,706	17,492
Prepaid expenses and other current assets		17,545	12,445
Current assets of discontinued operations		-	279,243
Total Current Assets		274,035	387,094
Property and Equipment, net		43,005	45,625
Property and Equipment of Discontinued Operations, net		-	7,179
Accounts receivable, net of current portion		3,088	6,604
Total Assets		$ 320,128	$ 446,502

LIABILITIES
Current Liabilities
Accounts payable		$ 217,135	$ 3,771
Accrued liabilities		64,970	60,892
Unearned revenue		33,084	62,885
Notes payable, current portion		113,181	119,014
Current liabilities of discontinued operations		-	622
Total Current Liabilities		428,370	247,184
Long-Term Liabilities
Notes payable, net of current portion		322,905	216,909
Total Long-Term Liabilities		322,905	216,909
Total Liabilities		751,275	464,093

COMMITMENTS AND CONTINGENCIES		-	-

STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value
Authorized:	5,000,000 shares
Issued and outstanding:	1,200,000 shares and
	no shares, respectively	1,200	-
Common stock - $0.001 par value
Authorized:	100,000,000 shares
Issued and outstanding:	21,881,863 shares and
	21,381,863 shares, respectively	21,882	21,382
Additional paid-in capital		2,810,330	2,730,575
Non-controlling interest in discontinued operations		-	876,453
Accumulated deficit		(3,264,559)	(3,646,001)
Total Stockholders' Deficit		(431,147)	(17,591)

Total Liabilities and Stockholders' Deficit		$ 320,128	$ 446,502

See the accompanying notes to consolidated financial statements.

F-2

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended
	December 31,
	2009	2008
Revenue	$ 867,341	$ 1,310,584
Cost of Revenue	336,974	466,117
Gross Profit	530,367	844,467
Operating Expenses
General and administrative	518,974	483,959
Professional fees	53,793	70,079
Selling and marketing	112,035	157,483
Research and development	194,003	111,435
Total Operating Expenses	878,805	822,956
Net Profit (Loss) from Operations	(348,438)	21,511
Other Income (Expenses)
Other Income (Expense)	64	278
Interest Income	1,200	1,119
Interest Expense	(30,946)	(30,861)
Total Other Income (Expenses)	(29,682)	(29,464)
Net Profit (Loss) from Continuing Operations before
Provision for Income Taxes	(378,120)	(7,953)
Provision for Income Taxes	-	-
Net Loss from Continuing Operations	$ (378,120)	$ (7,953)
Discontinued Operations
Loss from Operations of Discontinued Subsidiary	$ (241,748)	$ (383,572)
Gain on Disposal of Discontinued Operations	$ 1,001,310	$ -
Income (Loss) from Discontinued Operations	$ 759,562	$ (383,572)
Net Profit (Loss)	$ 381,442	$ (391,525)

Basic and Diluted Profit (Loss) Per Common Share
Continuing operations	$ (0.02)	$ -
Discontinued operations	$ 0.04	$ (0.02)
Total Basic and Diluted Profit (Loss) Per Common Share	$ 0.02	$ (0.02)

Basic and Diluted Weighted-Average
Common Shares Outstanding	21,387,239	21,267,780

See the accompanying notes to consolidated financial statements.

F-3

TETRIDYN SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Years Ended December 31, 2009 and December 31, 2008

					Additional	Deferred		Total
	Common Stock		Preferred Stock		Paid In	Stock	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Capital	Compensation	Deficit	Deficit
Balance, December 31, 2007	21,011,863	$ 21,012	-	$ -	$ 2,576,710	$ (13,286)	$ (3,254,476)	$ (670,040)
Deferred stock compensation,
January 2008	-	-	-	-	-	13,286	-	13,286
Issuance for outside director
services, $0.10 per share,
April 2008	120,000	120	-	-	11,880	-	-	12,000
Issuance for consultant services,
$0.10 per share, April 2008	250,000	250	-	-	24,750	-	-	25,000
Stock options	-	-	-	-	117,235	-	-	117,235
Net profit (loss)	-	-	-	-	-	-	(391,525)	(391,525)
Balance, December 31, 2008	21,381,863	$ 21,382	-	$ -	$ 2,730,575	$ -	$ (3,646,001)	$ (894,044)
Issuance for executive services,
$0.0445 per share,
November 2009	-	-	1,200,000	1,200	52,255	-	-	53,455
Issuance for outside director
services, $0.056 per share,
December 2009	300,000	300	-	-	16,500	-	-	16,800
Issuance for employees' services,
$0.056 per share,
December 2009	200,000	200	-	-	11,000	-	-	11,200
Net profit (loss)	-	-	-	-	-	-	381,442	381,442
Balance, December 31, 2009	21,881,863	$ 21,882	1,200,000	$ 1,200	$ 2,810,330	$ -	$ (3,264,559)	$ (431,147)

See the accompanying notes to consolidated financial statements.

F-4

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended
	December 31,
	2009 Restated ( See Note 1)	2008 Restated (See Note 1)
Cash Flows from Operating Activities
Net Profit (Loss)	$ 381,442	$ (391,525)
Less: Net profit (loss) from discontinued operations	$ 759,562	$ (383,572)
Loss from Continuing Operations	$ (378,120)	$ (7,953)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities from continuing operations:
Depreciation	13,636	11,187
Loss on disposal of asset	109	-
Common stock issued for services	28,000	50,286
Preferred stock issued for services	53,455	-
Granted stock options	-	117,235
Changes in operating assets and liabilities:
Accounts receivable	(22,839)	(23,278)
Inventory	(739)	-
Prepaid expenses	(4,361)	(2,261)
Accrued expenses	(26,824)	(12,577)
Accounts payable	118,940	(53,030)
Unearned revenue	(29,801)	5,082
Net Cash Provided by (Used in) Operating Activities from Continuing Operations	(248,544)	84,691
Net Cash Provided by (Used in) Operating Activities from Discontinued Operations	203,799	347,740
Net Cash Provided by (Used in) Operating Activities	(44,745)	432,431
Cash Flows from Investing Activities
Purchase of property and equipment for continuing operations	(11,125)	(11,548)
Purchase of property and equipment for discontinued operations	-	(7,405)
Cash increase (decrease) due to deconsolidation of subsidiary	1,577	(279,243)
Net Cash Used in Investing Activities from Continuing Operations	(11,125)	(11,548)
Net Cash Provided by (Used in) Investing Activities from Discontinued Operations	1,577	(286,648)
Net Cash Used in Investing Activities	(9,548)	(298,196)
Cash Flows from Financing Activities
Proceeds from borrowing under notes payable	200,000	-
Principal payments on notes payable	(99,837)	(205,255)
Net Cash Provided by (Used in) Financing Activities from Continuing Operations	100,163	(205,255)
Net Cash Provided by (Used in) Financing Activities from Discontinued Operations	-	-
Net Cash Provided by (Used in) Financing Activities	100,163	(205,255)
Net Increase (Decrease) in Cash	45,870	(71,020)
Cash at Beginning of Period	77,914	148,934
Cash at End of Period	$ 123,784	$ 77,914

Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes	$ -	$ -
Cash paid for interest expense and lines of credit	$ 28,172	$ 31,425

See the accompanying notes to consolidated financial statements.

F-5

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Note 1 – Organization and Summary of Significant Accounting Policies

Nature of Business – TetriDyn Solutions, Inc. (the “Company”), specializes in providing business information technology (IT) solutions to its customers. The Company optimizes business and IT processes by utilizing systems engineering methodologies, strategic planning, and system integration to add efficiencies and value to its customers’ business processes and to help its customers identify critical success factors in their business.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, an Idaho corporation also named TetriDyn Solutions, Inc. (“TetriDyn-Idaho”), and results of operations of its partially owned variable interest entity, Southfork Solutions, Inc. (“Southfork”), from October 30, 2006, to September 30, 2009. Intercompany accounts and transactions have been eliminated in consolidation through September 30, 2009, at which time the principles of consolidation no longer applied to Southfork (see Note 6).

Business Segments – For 2008 and 2009, the Company’s services can be broadly classified into two principal segments: the business IT solutions segment and the livestock segment. The business IT solutions segment provides business IT solutions within the healthcare industry, although the segment is in the process of expanding the solutions to other select industries. The livestock segment was focused on providing business IT solutions specifically within the livestock industry. The Company’s involvement in the livestock segment ended in the fourth quarter of 2009 (see Note 6) and the Company has only one segment.

Use of Estimates – In preparing financial statements in conformity with generally accepted accounting principles (GAAP), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from these estimates.

Cash and Cash Equivalents – For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

Revenue Recognition – The Company’s AeroMD EMR, electronic medical records software, is provided as turnkey software that has been customized for specific medical specializations. The Company installs the software at the customer’s location for a fee and charges the customer a monthly license fee, based on the number of operating workstations, under a one- or two-year usage agreement. The customer is entitled to all systems upgrades during the term of the agreement. At the end of their contracts, customers may continue using AeroMD by entering into a new license with the Company. The Company also sells installation and post-contract support service contracts on an hourly basis. The Company does not provide any rights of return or warranties on its AeroMD EMR software or on its support service contracts.

F-6

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Revenue from software licenses and related installation and support services is recognized when earned and realizable. Revenue is earned and realizable when persuasive evidence of an arrangement exists, services, if requested by the customers, have been rendered and are determinable, and collectability is reasonably assured. Amounts received from customers prior to these criteria being met are deferred. Revenue from the sale of software is recognized when delivered to the customer or upon installation of the software if an installation contract exists. Revenue from post-contract support service contracts is recognized as the services are provided, determined on an hourly basis. The Company recognizes the revenue received for unused support hours under support service contracts that have had no support activity after two years. Revenue applicable to multiple-element fee arrangements is divided among the software, the installation, and post-contract support service contracts using vendor-specific objective evidence of fair value, as evidenced by the prices charged when the software and the services are sold as separate products or arrangements.

The Company also provides IT management consulting services. These services are focused at the healthcare industry and paid on a monthly basis for a contracted monthly fee, which is not cancelable or refundable. Revenue for these services is recognized over the contract period.

Long-Lived Assets – The Company accounts for long-lived assets under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, “Accounting for Goodwill and Other Intangible Assets,” and FASB ASC Topic 360, “Accounting for Impairment or Disposal of Long-Lived Assets.” In accordance with FASB ASC Topic 350 and FASB ASC Topic 360, long-lived assets, goodwill, and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, goodwill, and intangible assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets.

Going Concern– The accompanying consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern. As reflected in accompanying consolidated financial statements, the Company had a net loss from continuing operations of $378,120 and used $248,544 of cash in operating activities for the year ended December 31, 2009. The Company had a working capital deficiency of $154,335 and a stockholders’ deficiency of $431,147 as of December 31, 2009. The ability of the Company to continue as a going concern is dependent on the Company’s ability to increase its sales and obtain external funding for its product development. The financial statements do not include any adjustments that may result from the outcome of this uncertainty.

Income Taxes – The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and on the amount of operating loss carryforwards, and are measured using the enacted tax rates and laws that will be in effect when the temporary differences and carryforwards are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

F-7

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Recent Accounting Pronouncements – In June 2009, the FASB issued ASC 105 “Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles.” The FASB Accounting Standards Codification TM (the “Codification”) has become the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with GAAP. All existing accounting standard documents are superseded by the Codification and any accounting literature not included in the Codification will not be authoritative. Rules and interpretive releases of the Securities and Exchange Commission (SEC) issued under the authority of federal securities laws, however, will continue to be the source of authoritative generally accepted accounting principles for SEC registrants. Effective September 30, 2009, all references made to GAAP in the Company’s financial statements will include references to the new Codification. The Codification does not change or alter existing GAAP and, therefore, will not have an impact on the Company’s financial position, results of operations, or cash flows.

In June 2009, the FASB issued changes to the consolidation guidance applicable to a variable interest entity (VIE). FASB ASC 810, “Consolidation,” amends the guidance governing the determination of whether an enterprise is the primary beneficiary of a VIE and is, therefore, required to consolidate an entity, by requiring a qualitative analysis rather than a quantitative analysis. The qualitative analysis will include, among other things, consideration of who has the power to direct the activities of the entity that most significantly impact the entity’s economic performance and who has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This standard also requires continuous reassessments of whether an enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires enhanced disclosures about an enterprise’s involvement with a VIE. Topic 810 is effective as of the beginning of interim and annual reporting periods that begin after November 15, 2009. This will not have an impact on the Company’s financial position, results of operations, or cash flows.

In June 2009, the FASB issued ASC 860, “Transfers and Servicing.” FASB ASC 860 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. FASB ASC 860 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of FASB ASC 860 will have on its financial statements.

Fair Value of Financial Instruments – The carrying amounts of the Company’s current portion of accounts receivable, prepaid expenses, accounts payable, accrued liabilities, unearned revenue, and notes payable approximate fair value due to the relatively short period to maturity for these instruments.

Property and Equipment – Property and equipment are recorded at cost. Maintenance, repairs, and renewals that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Property and equipment are depreciated using the straight-line method over the estimated useful life of the asset, which is set at five years for computing equipment and vehicles and seven years for office equipment. Gains or losses on dispositions of property and equipment are included in the results of operations when realized.

F-8

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Stock-Based Compensation – On May 15, 2006, at a special shareholders’ meeting, the Company’s shareholders approved the 2006 Long-Term Incentive Plan under which up to 4,000,000 shares of common stock may be issued. The 2006 plan is to be administered either by the board of directors or by the appropriate committee to be appointed from time to time by such board of directors. Awards granted under the 2006 plan may be incentive stock options (“ISOs”) (as defined in the Internal Revenue Code), appreciation rights, options that do not qualify as ISOs, or stock bonus awards that are awarded to employees, officers, and directors that, in the opinion of the board or the committee, have contributed or are expected to contribute materially to the Company’s success. In addition, at the discretion of the board of directors or the committee, options or bonus stock may be granted to individuals that are not employees, officers, or directors, but contribute to the Company’s success.

On June 17, 2009, at the Company’s annual shareholders’ meeting, the Company’s shareholders approved the 2009 Long-Term Incentive Plan under which up to 4,000,000 shares of common stock may be issued. The 2009 plan is to be administered either by the board of directors or by the appropriate committee to be appointed from time to time by such board of directors. Awards granted under the 2009 plan may be incentive stock options (“ISOs”) (as defined in the Internal Revenue Code), appreciation rights, options that do not qualify as ISOs, or stock bonus awards that are awarded to employees, officers, and directors that, in the opinion of the board or the committee, have contributed or are expected to contribute materially to the Company’s success. In addition, at the discretion of the board of directors or the committee, options or bonus stock may be granted to individuals that are not employees, officers, or directors, but contribute to the Company’s success.

Equity instruments issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB ASC 505, “Share-Based Payment.” Emerging Issues Task Force, or EITF, Issue 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached; or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the EITF.

Effective January 1, 2006, the Company adopted the provisions of FASB ASC 505 for its stock-based compensation plan. Under FASB ASC 505, all employee stock-based compensation is measured at the grant date, based on the fair value of the option or award, and is recognized as an expense over the requisite service, which is typically through the date the options or awards vest. The Company adopted FASB ASC 505 using the modified prospective method. Under this method, for all stock-based options and awards granted prior to January 1, 2006, that remain outstanding as of that date, compensation cost is recognized for the unvested portion over the remaining requisite service period, using the grant-date fair value measured under the original provisions of FASB ASC 505 for pro forma and disclosure purposes. Furthermore, compensation costs will also be recognized for any awards issued, modified, repurchased, or cancelled after January 1, 2006.

F-9

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

As the result of adoption of FASB ASC 505, the Company recognized no compensation during the year ended December 31, 2009, and $117,235 of compensation during the year ended December 31, 2008, relating to stock options granted in April 2008 that were outstanding at December 31, 2008 (see Note 4).

Net Profit (Loss) Per Common Share – Basic and diluted net profit (loss) per common share is computed based upon the weighted-average stock outstanding as defined by FASB ASC 260, “Earnings Per Share.” As of December 31, 2009 and 2008, 3,497,000 and 3,520,500, respectively, of common share equivalents were antidilutive and not used in the calculation of diluted net loss per share.

Reclassifications – Certain amounts in the 2008 information have been reclassified to conform to the 2009 presentation. These reclassifications had no impact on the Company’s net loss or cash flows.

Restatement – On October 5, 2010, the Company determined that it had not properly presented the disposal of its VIE on the Consolidated Statements of Cash Flows under ASC 230-10-45-4, which requires the Company to classify the cash held by the VIE upon deconsolidation as cash used in investment activities. As a result of this adjustment, the Company was required to amend its Form 10-K for the year ended December 31, 2009. The adjustment did not have any effect on the Consolidated Statement of Operations or on the net income (loss) per share for the years ended December 31, 2009 and 2008. The adjustments made are detailed below:

	As Originally
Year Ended December 31, 2008	Reported		Adjustment		As Restated
Net Cash Provided by (Used in) Operating Activities from Continuing Operations	$	84,691	$		$	84,691
Net Cash Provided by (Used in) Operating Activities from Discontinued Operations		347,740				347,740
Net Cash Provided by (Used in) Operating Activities		432,431				432,431

Cash increase (decrease) due to deconsolidation of subsidiary		-		(279,243)		(279,243)
Net Cash Used in Investing Activities from Continuing Operations		(11,548)				(11,548)
Net Cash Used in Investing Activities from Discontinued Operations		(7,405)				(286,648)
Net Cash Used in Investing Activities		(18,953)				(298,196)

Net Cash Provided by (Used in) Financing Activities from Continuing Operations		(205,255)				(205,255)
Net Cash Provided by (Used in) Financing Activities from Discontinued Operations		-				-
Net Cash Provided by (Used in) Financing Activities		(205,255)				(205,255)

Net Increase (Decrease) in Cash		208,223		(279,243)		(71,020)

Cash at Beginning of Period		148,934				148,934

Cash at End of Period	$	357,157	$	(279,243)	$	77,914

F-10

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

	As Originally
Year Ended December 31, 2009	Reported		Adjustment		As Restated
Net Cash Provided by (Used in) Operating Activities from Continuing Operations	$	(248,544)	$		$	(248,544)
Net Cash Provided by (Used in) Operating Activities from Discontinued Operations		(73,867)		277,666		203,799
Net Cash Provided by (Used in) Operating Activities		(322,411)				(44,745)

Cash increase (decrease) due to deconsolidation of subsidiary		-		1,577		1,577
Net Cash Used in Investing Activities from Continuing Operations		(11,125)				(11,125)
Net Cash Used in Investing Activities from Discontinued Operations		-				1,577
Net Cash Used in Investing Activities		(11,125)				(9,548)

Net Cash Provided by (Used in) Financing Activities from Continuing Operations		100,163				100,163
Net Cash Provided by (Used in) Financing Activities from Discontinued Operations		-				-
Net Cash Provided by (Used in) Financing Activities		100,163				100,163

Net Increase (Decrease) in Cash		(233,373)		279,243		45,870

Cash at Beginning of Period		357,157		(279,243)		77,914

Cash at End of Period	$	123,784			$	123,784

Note 2 – Property and Equipment

Property and equipment consist of the following as of December 31, 2009 and 2008:

December 31,	2009	2008
Computer & office equipment	$ 41,587	$ 71,784
Company vehicle	33,981	33,981
Accumulated depreciation	(32,563)	(60,140)
	$ 43,005	$ 45,625

Depreciation expense during the years ended December 31, 2009 and 2008, was $13,636 and $11,187, respectively.

F-11

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Note 3 – Notes Payable and Revolving Credit Agreements

Notes payable are summarized as follows:

	December 31,	December 31,
	2009	2008
Note payable to third party, due in monthly payments of
$2,000 through September 2015, bearing interest at 7%
per annum, secured by certain assets and shares of
common stock	$ 113,168	$ 128,460
Note payable to third party, due in monthly payments of
$979 through January 2013, bearing interest at 6.25%
per annum, guaranteed by two shareholders, secured by assets	31,985	41,385
Note payable to third party, due in monthly payments of
$1,742 through December 2014, bearing interest at 7.00%
per annum, guaranteed by two shareholders, secured by
shareholders' personal property	150,000	-
Note payable to third party, due in full September 2010,
bearing interest up to 5.00%, unsecured	50,000	-
Note payable to bank, bearing interest at 5.75%, originally
due April 2009 and extended during 2009 until April 2010,
guaranteed by two shareholders, secured by the
shareholders' personal property	19,035	87,729
Line of credit agreements with a bank, interest at prime
plus 3%, unsecured	49,634	49,736
Note payable to credit union, bearing interest at 6.29%, due
January 2013, guaranteed by two shareholders, secured
by certain asset	22,264	28,613
Total Notes Payable	$ 436,086	$ 335,923
Less: Current Portion	113,181	119,014
Long-Term Notes Payable	$ 322,905	$ 216,909

Annual maturities of notes payable as of December 31, 2009, were as follows:

Years Ending December 31:
2010	$113,181
2011	59,609
2012	62,764
2013	46,763
2014	136,514
Thereafter	17,255
Total	$436,086

F-12

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Note 4 – Stockholders’ Equity

Common Stock – As of January 1, 2008, the Company had 21,011,863 common shares issued and outstanding.

In April 2008, the Company granted 60,000 shares of common stock to each of its outside directors (120,000 total shares) for their services valued at the fair value on the date of grant of $12,000. The Company also granted 250,000 shares of common stock to a consultant for services rendered valued at the fair value on the date of grant of $25,000. Also in April 2008, the Company granted options to purchase 1,887,500 shares of common stock to employees and executives. Stock option compensation expensed for the year ended December 31, 2008, is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award.

On December 28, 2009, the Company granted 150,000 shares of common stock to each of its outside directors (300,000 total shares) for their services valued at the fair value on the date of grant of $16,800. The Company also granted 200,000 shares of common stock to its employees valued at the fair value on the date of grant of $11,200.

The fair value of options at the date of grant is estimated using the Black-Scholes option pricing model. No options were granted in 2009. The assumptions made in calculating the fair values of options granted are as follows:

	For the Year Ended December 31, 2009
	Employees	Executives	Directors
Expected term (in years)	N/A	N/A	N/A
Expected volatility	N/A	N/A	N/A
Expected dividend yield	N/A	N/A	N/A
Risk-free interest rate	N/A	N/A	N/A

	For the Year Ended December 31, 2008
	Employees	Executives	Directors
Expected term (in years)	1	1	N/A
Expected volatility	178%	178%	N/A
Expected dividend yield	0%	0%	N/A
Risk-free interest rate	1.53%	1.53%	N/A

F-13

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

A summary of the status of the Company’s stock options as of December 31, 2009, and the changes during the period ended are presented below:

Weighted Average Fixed Options	Shares		Exercise Price
Outstanding at beginning of year		3,520,500	$	0.10
Expired		(16,000)		0.09
Expired		(7,500)		0.10
Outstanding at December 31, 2009		3,497,000
Exercisable at December 31, 2009		3,497,000
Weighted average exercise price of options granted to employees at Dec. 31, 2009	$	0.10

Exercise Price	Number Outstanding at December 31, 2009		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2009		Weighted Average Exercise Price
$0.09		257,000		5.04	$	0.09		257,000	$	0.09
$0.10		1,440,000		2.74		0.10		1,440,000		0.10
$0.11		1,800,000		3.32		0.11		1,800,000		0.11
								3,497,000

A summary of the status of the Company’s stock options as of December 31, 2008, and the changes during the period ended are presented below:

Weighted Average Fixed Options	Shares		Exercise Price
Outstanding at beginning of year		1,633,000	$	0.10
Issued		87,500		0.10
Issued		1,800,000		0.11
Outstanding at December 31, 2008		3,520,500
Exercisable at December 31, 2008		3,520,500
Weighted average exercise price of options granted to employees at Dec. 31, 2008	$	0.10

Exercise Price	Number Outstanding at December 31, 2008		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2008		Weighted Average Exercise Price
$0.09		273,000		6.18	$	0.09		273,000	$	0.09
$0.10		1,447,500		3.77		0.10		1,447,500		0.10
$0.11		1,800,000		4.32		0.11		1,800,000		0.11
								3,520,500

F-14

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Preferred Stock – On November 12, 2009, the Company’s Executive Compensation Committee issued 600,000 shares Series A Preferred Stock to each of the Company’s executives (1,200,000 total shares) at a total value of $53,455. The Series A Preferred Stock preferences were issued for voting rights, with a voting majority of 100 votes for each share of Series A Preferred Stock over common stock as a single class that has one vote for each share. The Series A Preferred Stock has a value of 1/20 the value of Company common stock for purposes of dividends and distributions on dissolution and liquidation.

Note 5 – Concentrations

Sales – The Company had one customer that represented 52% and 74% of sales for the years ended December 31, 2009 and 2008, respectively. This customer is a regional hospital that contracted with the Company for IT consulting and management services. The agreement with the customer expired in 2009 and was not renewed.

Accounts Receivable – The Company had one customer that represented 93% of the accounts receivable for the year ended December 31, 2009. This accounts receivable was for engineering services provided to Southfork. The Company and Southfork reached a settlement agreement in which the accounts receivable will be paid with a combination of cash, equipment, and materials. The account receivable is scheduled to be paid in full by June 30, 2010. The Company had one customer that represented 52% and a second customer that represented 42% of the accounts receivable for the year ended December 31, 2008. The first customer’s account receivable was for custom developed software, and payment was received in full in early January 2009. The second customer is on a payment plan for purchased product.

Note 6 – Variable Interest Entities

FASB ASC 860, “Transfers and Servicing,” provides guidance on the consolidation of certain entities when control exists through means other than ownership of voting (or similar) interests and was effective for public entities that have interests in variable interest entities commonly referred to as special purpose entities for the first reporting period that ends after March 15, 2004. FASB ASC 860 requires consolidation by the majority holder of expected residual gains and losses of the activities of a variable interest entity (“VIE”).

As of December 31, 2009 and December 31, 2008, the Company owned 39.2% and 38.9%, respectively, of the voting interest in Southfork Solutions, Inc. (“Southfork”), an Idaho corporation. Southfork’s objective is to provide electronic livestock verification and tracking throughout the entire livestock lifecycle. In July 2007, the Company entered into an agreement with Southfork. The agreement details the stock compensation that Southfork would pay to the Company for management services, as well as cash compensation that Southfork would pay to the Company for technical services, including but not limited to engineering, marketing, bookkeeping, and administration. According to the agreement, Southfork would compensate the Company with 45,000 common shares per month for management services and with cash based upon hours spent for all other services. The agreement was amended in early October 2009 so that the Company no longer provides management, financial, or administrative services to Southfork.

F-15

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

For the year ended December 31, 2008, the Company concluded that Southfork met the definition of a VIE because the Company had an agreement with Southfork to fully manage and control the financial direction of Southfork and is the primary beneficiary of its operations. However, effective September 30, 2009, the Company concluded that Southfork no longer met the definition of a VIE because the Company was not in management or control of the financial direction of Southfork; the Company was also no longer the primary beneficiary of Southfork’s operations. Effective September 30, 2009, the Company changed from the VIE consolidation method of accounting for Southfork to the cost method of accounting for its investment in the Southfork securities, based on guidance from FASB ASC 323, which provides direction to demonstrate proof of inability to exercise significant influence, including, but not limited to, the majority ownership of the investee being concentrated among a small group of shareholders who operate the investee without regard to the views of the investor. Although the Company owned 39.2% of Southfork, the three remaining Southfork board members collectively represented 54.9% of Southfork’s ownership.

The Company’s gain on disposal of discontinued operations associated with Southfork was determined using the fair value of the assets and liabilities upon deconsolidation. Southfork had a negative net worth as of the date of deconsolidation on September 30, 2009; the Company, therefore, realized a gain from the disposal of those liabilities. Southfork continued to have a net loss in the fourth quarter of 2009; therefore, there were no additional losses recorded under the cost method of accounting.

Effective in October 2009, the Company discontinued its operations in its livestock segment due to the change in the relationship between the Company and Southfork. No revenues were associated with the discontinued revenues for the years ended December 31, 2009 and 2008. The expenses associated with the discontinued operations’ losses for the years ended December 31, 2009 and 2008, are summarized below:

December 31,	2009	2008
General and administrative	$ 12,070	$112,513
Professional fees	46,504	46,130
Selling and marketing	11,850	-
Less non-controlling interest	(364,497)	(602,257)
Total Discontinued Operating Loss	$241,748	$383,572

F-16

TETRIDYN SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Note 7 – Income Taxes

As of December 31, 2009, the Company has net operating loss carry-forwards of $3,426,038 that expire, if not used, from 2022 through 2029. The valuation allowance at December 31, 2009, was $1,323,420. The net change in the valuation allowance for the year ended December 31, 2009, was an increase of $241,598. The Company paid no income taxes during the years ended December 31, 2009 and 2008. Deferred tax assets and related valuation allowance were as follows at December 31, 2009 and 2008:

December 31,	2009	2008
Unearned revenue	$ 13,252	$ 26,160
Operating loss carry forwards	1,312,168	1,055,662
Depreciation	2,000
Other	-	-
Total Deferred Income Tax Assets	1,323,420	1,081,822
Valuation allowance	(1,323,420)	(1,081,822)
Net Deferred Income Tax Asset	$ -	$ -

The following is a reconciliation of the tax benefit of pretax loss at the U.S. federal statutory rate with the benefit from income taxes:

For the Years Ended December 31,	2009	2008
Benefit at statutory rate (34%)	$ 129,690	$(133,119)
Non-deductible permanent differences	(405,329)	106,748
Change in valuation allowance	256,506	46,240
State tax benefit, net of federal tax	19,133	(19,869)
Benefit from Income Taxes	$ -	$ -

Note 8 – Commitments and Contingencies

In April 2008, the executive compensation committee set the Company’s Chief Executive Officer’s annual salary to be $108,000 and the Deputy Chief Executive Officer’s annual salary to be $96,000, effective January 1, 2008. In November 2009, the executive compensation committee extended the annual salaries for the Chief Executive Officer and the Deputy Chief Executive Officer to remain at $108,000 and $96,000, respectively, through calendar year 2010. However, Mr. Hempstead and Ms. Knapp voluntarily forfeited a portion of their 2009 salaries to reduce the outgoing cash flow of the Company.

Note 9 – Subsequent Events

In February 2010, the Company paid the balance of $19,035 in full for its note payable to a bank that was due April 2010.

F-17

Ocean Thermal Energy Corp - FORM 10-K/A - October 22, 2010

Attached files

Ocean Thermal Energy Corp Reports