UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





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 DrivePocatello,
      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 registeredn/a
            n/aSecurities
      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 oNon-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.





TABLE
OF CONTENTS





Item
            Description
            PageSpecial
      Note About Forward-Looking Information
            1Part
      IItem
      1
            Business
            2Item
      1A
            Risk
      Factors
            9Item
      1B
            Unresolved
      Staff Comments
            13Item
      2
            Properties
            13Item
      3
            Legal
      Proceedings
            13Item
      4
            (Removed
      and Reserved)
            13Part
      IIItem
      5
            Market
      for Registrant’s Common Equity, Related Stockholder Matters
      andIssuer
      Purchases of Equity Securities
            14Item
      6
            Selected
      Financial Data
            15Item
      7
            Management’s
      Discussion and Analysis of Financial Conditionand
      Results of Operations
            15Item
      7A
            Quantitative
      and Qualitative Disclosures about Market Risk
            21Item
      8
            Financial
      Statements and Supplementary Data
            21Item
      9
            Changes
      in and Disagreements with Accountants onAccounting
      and Financial Disclosure
            21Item
      9A(T)
            Controls
      and Procedures
            21Item
      9B
            Other
      Information
            22Part
      IIIItem
      10
            Directors,
      Executive Officers and Corporate Governance
            23Item
      11
            Executive
      Compensation
            25Item
      12
            Security
      Ownership of Certain Beneficial Owners and Managementand
      Related Stockholder Matters
            27Item
      13
            Certain
      Relationships and Related Transactions,and
      Director Independence
            28Item
      14
            Principal
      Accounting Fees and Services
            28Part
      IVItem
      15
            Exhibits,
      Financial Statement Schedules
            31Signatures
            33











SPECIAL
NOTE ABOUT FORWARD-LOOKING INFORMATION





This report contains statements about
the future, sometimes referred to as “forward-looking”
statements.  Forward-looking statements are typically identified by
the use of the words “believe,” “may,” “could,” “should,” “expect,”
“anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and similar
words and expressions.  Statements that describe our future strategic
plans, goals, or objectives are also forward-looking statements.  We
intend that the forward-looking statements will be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934.





Readers of this report are cautioned
that any forward-looking statements, including those regarding us or our
management’s current beliefs, expectations, anticipations, estimations,
projections, strategies, proposals, plans, or intentions, are not guarantees of
future performance or results of events and involve risks and uncertainties,
such as:





·
            whether
      we will be able to overcome the general downturn in the economy to expand
      our markets and increase revenues;





·
            our
      ability to obtain additional amounts of capital from external sources in
      order to expand our product offerings and entry into new markets with new
      products;





·
            whether
      the substantial amounts we need to spend for product development will
      enable us to penetrate new markets and expand
  sales;





·
            whether
      recently adopted national healthcare legislative reform will adversely
      affect the particular segments of the industry in which we are
      engaged;





·
            whether
      our efforts to protect our intellectual properties will be
      successful;





·
            whether
      our intellectual properties interfere with the intellectual properties of
      others; and





·
            our
      ability to engage and retain qualified technical and executive
      personnel.





The forward-looking information is
based on present circumstances and on our predictions respecting events that
have not occurred, that may not occur, or that may occur with different
consequences from those now assumed or anticipated.  Actual events or
results may differ materially from those discussed in the forward-looking
statements.  The forward-looking statements included in this report
are made only as of the date of this report.









PART
I





ITEM
1.  BUSINESS





Nature
of Business





TetriDyn
Solutions, Inc., (“TetriDyn”) specializes in providing business information
technology (IT) solutions to our customers.  We optimize business and
IT processes by utilizing systems engineering methodologies, strategic planning,
and system integration to add efficiencies and value to our customers’ business
processes and to help our customers identify critical success factors in their
business.





We
provide business IT solutions primarily to the healthcare
industry.  We are expanding our service offerings into selected other
professional industries as those markets develop.





In 2008
and until the fourth quarter of 2009, we also were engaged in providing business
IT solutions to the livestock segment through a variable interest subsidiary,
Southfork Solutions, Inc., which is developing electronic livestock tracking
systems, in which we had an approximately 39% interest at December 31, 2009 and
2008.  Effective October 2009, we are no longer in management or
financial control of this entity, although we continue to hold our approximately
39% minority interest.  Effective September 30, 2009, we changed from
the variable interest consolidation method of accounting for this entity to the
cost method of accounting for this entity.  See Note 6, Variable
Interest Entities, of the Notes to Consolidated Financial
Statements.





Organization





TetriDyn
Solutions, Inc. (“TetriDyn-Idaho”), was organized under the laws of the state of
Idaho on October 3, 2000.  On March 22, 2006, TetriDyn-Idaho and its
shareholders completed a stock exchange agreement with Creative Vending Corp., a
Florida corporation.  Under the terms of the agreement, the
TetriDyn-Idaho shareholders exchanged all of the outstanding TetriDyn-Idaho
common stock for 17,170,563 shares of Creative common stock.  Creative
also issued 829,437 shares to a consultant for services primarily rendered to
TetriDyn-Idaho under a July 2005 agreement.  Creative had 2,009,350
shares of common stock outstanding prior to the reorganization that remained
outstanding after the transaction.  The members of the board of
directors of TetriDyn-Idaho and its management became the board of directors and
management of Creative.  TetriDyn-Idaho continues as TetriDyn’s
subsidiary through which operations are conducted.





Due to
the TetriDyn-Idaho shareholders controlling TetriDyn-Idaho before and after the
completion of the agreement, TetriDyn-Idaho was considered the accounting
acquirer.  The transaction was therefore recognized as a 1-to-2.07
stock split of the common stock of TetriDyn-Idaho and the reverse acquisition of
Creative by TetriDyn-Idaho.  Creative did not meet the definition of a
business under Emerging Issues Task Force Issue 98-3, Determining Whether a Nonmonetary
Transaction Involves Receipt of Productive Assets or of a Business;
accordingly, the acquisition of Creative was recognized as a nonmonetary
exchange whereby the 2,009,350 shares of common stock constructively issued to
the Creative shareholders were recorded at $4,500, which was the value of the
liabilities assumed.





On June
1, 2006, Creative changed its domicile to the state of Nevada through a merger
with and into a newly formed subsidiary, TetriDyn Solutions, Inc., a Nevada
corporation.  The reorganization of Creative into the Nevada surviving
corporation was accomplished by a 1-for-1 share exchange by the
shareholders.  Under Nevada law, our authorized capital consists of
5,000,000 shares of preferred stock, $0.001 par value, and 100,000,000 shares of
common stock, $0.001 par value.












IT
Solutions





We
provide IT solutions to the healthcare industry, but we are expanding our
business IT solutions to select other industries.  The IT solutions
needed by the healthcare industry are similar to IT solutions needed by other
industries.  All modern companies require a reliable network and
computing infrastructure; however, many small-to-midsize businesses cannot
afford to employ a full IT department with advanced engineering and related
management capabilities to effectively use and manage such
resources.  We provide a cost-effective conduit to an array of IT
skills from management to engineering to basic technical
assistance.





Our IT
solutions range from full-service IT management to the sale of software and
hardware products.  We have categorized our solutions into four
interrelated and complimentary areas, each of which is discussed in more detail
below:





1.
            Technology
      Solutions




2.
            Consulting
      Solutions




3.
            Cloud
      Computing Solutions




4.
            Radio
      Frequency Identification (RFID)
Solutions







Technology
Solutions





We have
developed and are marketing our proprietary AeroMD EMR product nationwide
through direct marketing and a group of Value-Added Resellers, or VARs,
throughout the country.  Our AeroMD EMR offers medical offices the
wireless ability to perform all office tasks from scheduling and examinations to
prescription and billing processes.  The EMR’s ability to achieve
these functions with full mobility provides offices the tool to streamline their
operations and establish valuable processes that will reduce errors and increase
productivity, further helping decrease the high costs in the healthcare
industry.





We have
recently introduced a new proprietary product targeted specifically for hospital
environments called Charge Catcher.  Charge Catcher is a valuable tool
that uses artificial intelligence techniques to detect potential missing charges
before the invoice is even generated.  It can also be applied to past
charges to recoup lost revenue from previous billing cycles.  The tool
has been proven to incrementally increase revenue in hospitals.  In
addition, Charge Catcher enables hospitals to improve business
processes.  By reviewing the identified missed charges, hospitals can
correct their processes going forward.





We are
also a Value Added Reseller (VAR) for four McKesson Corporation healthcare
software and service packages: Medisoft® PMS, Lytec® PMS, Practice Partner® PMS
and EMR system, and RelayHealth® patient/physician portal.  McKesson
Corporation, currently ranked 18th on the FORTUNE 500, is one of the largest
health care companies in the world.





Additionally,
we provide custom software development for specialized EMR charts, customized
PMS reports, and interfaces for other software systems.












Consulting
Solutions





For
customers whose technical needs have surpassed their technical capabilities, we
provide either the management or the outsourcing of their internal IT
department.  When managing the customer’s IT department, we emphasize
the development of well-rounded skills relevant to the contemporary IT industry
within the department.  Senior team members work with the
organization’s administration and leadership teams to align the business
processes and IT investments with the vision of the organization’s chief
officers and board members.





We
provide a hybrid approach using proven methodologies born from systems
engineering, software engineering, engineering management, and project
management.  The overall value proposition to our customers is based
on our ability to leverage our business process analysis, service and delivery
infrastructure, leadership position in IT innovation, and technology
expertise.  Our commitment to excellence is demonstrated in the
success of our customers’ visions.





IT
services that we provide to our customers include the following:




·
            IT
      Infrastructure Assessment – We review, inspect, and test the effectiveness
      of our customers’ IT infrastructure, including computer hardware, software
      system integration, and network
systems.




·
            IT
      Strategic Planning – We collaborate with our customers to develop their IT
      strategic plan to be aligned with their organization’s
    vision.




·
            Network
      Optimization – We provide our customers with knowledge on how to optimize
      network equipment through design, implementation, and hardware
      configuration.




·
            Engineering
      & Software Services – Some companies build an IT system; we engineer
      it.  The difference is in planning for not only today, but for
      the future.  To create sustainable services, we implement best
      practices from industries and top
universities.




·
            Systems
      Lifecycle Engineering –We provide the knowledge to our customers on how to
      plan for the entire life of their IT systems.  Our Systems
      Lifecycle Engineering ensures an IT investment contributes maximum value
      to the organization throughout its
life.




·
            Technology
      Contract Review – We provide the expertise to ensure that the
      organization’s technology contracts meet the needs of the
      organization.





Our
approach offers the following benefits to our customers:




·
            Interdisciplinary Leadership
      Development – We provide leadership to our customers as part of our
      enterprise consulting.  We develop training for key leadership
      skills necessary for a successful partnership between business process
      areas and IT.  The training includes project management, meeting
      facilitation, and time organization.  Recognizing the need for
      leadership and direction, we utilize the strengths of the workforce
      employed by our customers.




·
            Experienced Personnel –
      We provide a senior-level interdisciplinary team to our customers for
      their complex and critical
projects.




·
            Rigorous Engineering
      Approach – Our concepts are built upon rigorous engineering
      methodologies born from computer science, systems engineering, engineering
      management, and electrical
engineering.




·
            Team-Based Approach –
      We have a team comprised of expertise from accounting to healthcare
      IT.  We utilize the necessary expertise from the fabric of our
      company on any given customer’s project.  We ensure maximum
      value to the customer by pooling our resources and drawing what is needed
      to meet their needs.












·
            Quality Service – The
      foundation of our quality service is built on our core values of
      community, excellence, solutions, education, and
      entrepreneurship.  Our customers benefit from professional
      services rooted in our ethical business
  practices.




·
            Continuous Process
      Improvement – We apply the Capability Maturity Model Integration
      (CMMI) methodology developed by Carnegie Melon’s Software Engineering
      Institute (SEI) to improve processes in the context of our customers’
      business processes.




·
            Knowledge Transfer – We
      recognize that leading-edge technology and stellar processes cannot
      produce results without transferring necessary skills and knowledge to the
      customer.




·
            Customer Empowerment –
      We pride ourselves on leading the customer to results it can
      reproduce.  We ensure control is in the customer’s
      hands.





Our
consulting solutions ensure the complex technology needs of the customer are
met, without the expense of staffing their business with senior-level
staff.  We provide quality solutions cost
effectively.  Services offered include the following:




·
            engineering
      of complex IT systems;




·
            business
      process improvement;




·
            infrastructure
      assessment and improvement;




·
            IT
      planning;




·
            optimization
      of software and hardware systems;




·
            network
      optimization; and




·
            lifecycle
      management.





We
provide customers the ability to purchase computer and networking equipment,
installation services, and follow-on support necessary for successful
operation.  We forge strategic relationships with reliable IT vendors
to offer clients the best quality at a price that meets their budgetary
demands.  We have a team of experts that designs systems with high
reliability and installs them according to all manufacturers’
specifications.  Finally, after the system is designed and installed,
we provide the support to keep it running efficiently.





We
provide remote and onsite product support and training for each of our offered
software products.  Support can be purchased in either support
contracts or on a per-hour basis.





For those
customers who do not require advanced IT services, but are interested in having
reliable and cost-effective support to provide product upgrades and product
support, we provide one- or two-year contracts.  Our product support
contracts provide product support and annual product upgrades for the term of
the contract.





Cloud/Hosting
Computing Solutions





We are
preparing to enter into the business of providing cloud computing to our
customers.  Many of our existing and potential customers have
requested this type of service to help them manage their IT
infrastructure.  Our engineers are highly skilled in computing
virtualization environments that allow for quick deployment of new environments
in a seamless manner to our customers.












Cloud
computing is a technology innovation that enables computing power and services
to be delivered and accessed through the Internet, provided as a service instead
of as a product.  Customers access applications, operating platforms,
data storage, and other computing resources via the Web and do not need
knowledge of or expertise in managing the underlying technology
infrastructure.  Virtualization, which is an integral part of cloud
computing, means a business can infinitely scale its technology to meet demand
in real time.





According
to Fredric Paul, Cloud
Computing’s Strengths Play to Smaller Companies’ Needs, Information Week, June
24, 2008, available at http://bmighty.informationweek.com/hardware_
software/showArticle.jhtml?articleID=208800565:





For small
and midsize companies, cloud computing offers enterprise-class or even better,
consumer class --
applications for far less than enterprises pay to do it themselves.





If cloud
computing offers significant benefits to IT departments in the enterprise, it’s
an absolute godsend to small and midsize companies.  Instead of making
do with a small, under-resourced IT staff trying to emulate the productivity of
billion-dollar IT outfits, smaller companies can now access enterprise-class
solutions with limited up-front costs and easy scalability.





.  .  .  .





Many
smaller companies don’t really care about infrastructure, adds Agatha Poon,
Senior Analyst, Enterprise Research at Yankee Group, and “have no idea what
cloud computing is about.”  But they are driven to outsource
applications to meet their business needs.





Key
characteristics of cloud computing include the following:




·
            Agility improves with
      user’s ability to rapidly and inexpensively re-provision technological
      infrastructure resources.




·
            Costis greatly reduced
      and capital expenditures are converted to operational
      expenditures.  This ostensibly lowers barriers to entry, as
      infrastructure is typically provided by a third party and does not need to
      be purchased for one-time or infrequent intensive computing
      tasks.




·
            Device and location
      independence enables users to access systems using a Web browser
      regardless of their location or what device they are using (e.g., PC,
      mobile).  Since infrastructure is off-site and accessed via the
      Internet, users can connect from
anywhere.




·
            Multi-tenancyenables
      sharing of resources and costs across a large pool of users, thus allowing
      for:




o
            centralization of
      infrastructure in locations with lower
costs;




o
            peak-load capacity
      increases (i.e., users need not engineer for highest possible
      load-levels); and




o
            utilization and
      efficiency improvements for systems that are often only 10 – 20%
      utilized.




·
            Reliability improves
      through the use of multiple redundant sites, which makes cloud computing
      suitable for business continuity and disaster
  recovery.












·
            Scalability via dynamic
      (“on-demand”) provisioning of resources on a fine-grained, self-service
      basis near real-time, without users having to engineer for peak
      loads.  Performance is monitored and consistent and loosely
      coupled architectures are constructed using Web services as the system
      interface.




·
            Security typically
      improves due to centralization of data, increased security-focused
      resources, etc.  Security is often as good as or better than
      under traditional systems, in part because cloud computing providers are
      able to devote resources to solving security issues that many customers
      cannot afford.




·
            Sustainability comes
      about through improved resource utilization, more efficient systems, and
      carbon neutrality.





RFID
Solutions





In 2006,
we started pursuing radio frequency identification, or RFID, technologies in the
livestock industry to provide tracking and data collection on individual
animals.  It was always our intention to expand this technology into
our core business segment – healthcare.  Starting in 2009, we expanded
our RFID research and development to address problem areas in the healthcare
segment.  These problem areas include issues surrounding patient care,
optimized business processes for the healthcare providers, and improved
reporting of incidents.  With our underlying goal of providing
cost-effective solutions to our customers, expanding on the inexpensive RFID
technologies developed for the livestock provided an avenue for us to provide
needed functionality at a reasonable price to the healthcare
industry.





We are
uniquely qualified to undertake commercializing our RFID technologies and
services into the healthcare industry.  Not only do we have
specialized RFID engineers who were major contributors to the development of the
underlying integrated circuit (IC) chips used within our RFID technologies, but
we also have the depth of software, network, and systems engineers to provide
the comprehensive solutions around the RFID hardware technology.





Our
objective is to become a manufacturer of successful RFID products using our
proprietary technology in the development of healthcare products.  We
anticipate significant growth in this emerging market.  Smart RFID
products such as ours have been primarily used in the real-time location and
tracking of assets across all business sectors.  Our approach
continues to be in the development of integrated systems that encompass the
application of our hardware, software, and process development for the
healthcare market.  As the government continues to focus on the
reformation of the American healthcare system, we anticipate the need will
continue to rise for products like ours that are focused on the automation of
manually based systems that exist today.  We have successfully
established testing beta sites for trials using our prototype RFID systems and
are designing the ergonomics for the commercialization of this product
line.





Livestock
Segment





During
2008 and 2009 until October 2009, we applied our business IT solutions
experience in the healthcare industry along with the core technology in our
AeroMD EMR software to develop a unique niche in the livestock security industry
through our variable interest controlled subsidiary, Southfork Solutions, Inc.,
an Idaho corporation.  Effective October 2009, we are no longer in
management or financial control of Southfork, although we retain our
approximately 39% equity interest.







We retain
a royalty-free, irrevocable, worldwide-exclusive right and license under any
patents, technology, or other intellectual property owned by Southfork to the
extent required by us to exploit the patent, technology, or intellectual
property in other industries and markets outside of the livestock industry
specifically targeted by Southfork.  Additionally, any modifications
made to these technologies or other intellectual property by us outside of the
scope of the agreement will be owned by us.  We are seeking to
commercialize these technologies for other markets.





While we
controlled Southfork’s management and finances, until October 2009, Southfork
planned a series of installed system studies at locations of its strategic
partners, Johnson Livestock, LLC, in Idaho and Five Rivers Ranch Cattle Feeding
LLC in Colorado, as well as range trials in Montana, Wyoming, Idaho, Washington,
and Colorado.  These tests were designed to document operating
parameters, provide economic baseline data, and identify additional application
opportunities.  However the full planned scope of these trials was
constrained by the lack of available capital.  We are advised by
current Southfork management that it is seeking additional capital to advance
technical development, testing, and product rollout.





Research
and Development





We
incurred costs of $194,003 and $111,435 for research and development for our
continuing operations during the years ended December 31, 2009 and 2008,
respectively.  In addition, we routinely complete customer-required
engineering and related developmental activities in connection with the delivery
of various customized products that indirectly support our research and
development effort.





Intellectual
Property





We
believe our intellectual properties are critical to our business and
growth.  We rely on trade secret protection, confidentiality
agreements with employees, consultants, customers, and others with whom we
interact, and patent laws to protect our proprietary rights.  We do
not believe that our business IT solutions segment is dependent upon or obtains
a competitive advantage from our patents or that the expiration of any patent
would materially affect our business.





We
frequently review our research and development efforts and product
identification needs to consider whether we should seek additional patent or
trademark protection for new developments or product offerings.





We do not
believe that any of our products or other proprietary rights infringe upon the
rights of third parties.  However, we cannot assure that others may
not assert infringement claims against us in the future and recognize that any
such assertion may require us to incur legal and other defense costs, enter into
compromise royalty arrangements, or terminate the use of some
technologies.  Further, we may be required to incur legal and other
costs to protect our proprietary rights against infringement by third
parties.





Employees





As of
March 30, 2010, we had ten total employees, including eight full-time employees,
consisting of two executive officers who are also directors and perform
technical and managerial functions, six other technical and sales employees, and
two part-time administrative staff.





Government
Regulation; Environmental Compliance





Our
activities are not subject to present or expected probable material governmental
regulation, including environmental laws.












Competition





The
market for IT services and products is intensely competitive and highly
fragmented, with minimal barriers to entry.  We expect competition to
increase in the future, and there can be no assurance that we will be able to
compete effectively with current or future competitors or that the competitive
pressures we face will not have a material adverse effect on our business,
financial condition, and operating results.





Potential
competitors may have substantially greater research and product development
capabilities and financial, technical, marketing, and human resources than we
have.  As a result, these competitors may:




·
            succeed
      in developing products that are equal to or superior to our products or
      that achieve greater market acceptance than our
  products;




·
            devote
      greater resources to developing, marketing, or selling their
      products;




·
            respond
      more quickly to new or emerging technologies or technical advances and
      changes in customer requirements, which could render our technologies or
      products obsolete;




·
            introduce
      products that make the continued development of our current and future
      products uneconomical;




·
            obtain
      patents that block or otherwise inhibit our ability to develop and
      commercialize our products;




·
            withstand
      price competition more successfully than we
can;




·
            establish
      cooperative relationships among themselves or with third parties that
      enhance their ability to address the needs of our prospective customers;
      and




·
            take
      advantage of acquisition or other opportunities more readily than we
      can.





In our
business IT solutions segment, we believe competition is based principally on
providing resourceful creative solutions at competitive prices with quick,
responsive service.  We cannot assure that our efforts to meet these
competitive factors will be successful.








ITEM
1A.  RISK FACTORS





In
addition to the negative implications of all information and financial data
included in or referred to directly in this periodic report, you should consider
the following risk factors.  This periodic report contains
forward-looking statements and information concerning us, our plans, and other
future events.  Those statements should be read together with the
discussion of risk factors set forth below, because those risk factors could
cause actual results to differ materially from such forward-looking
statements.





We
cannot predict the impact on our activities of the current economic
crises.





The
current economic crises may adversely affect our ability to expand or generate
new sales for our healthcare industry customers, which are likely to continue to
face reduced patient and procedure revenues and patient and third-party
payments.  We may be unable to expand sales in a constricted or
further constricting healthcare industry economy.












The
auditors’ report for our most recent fiscal year contains an explanatory
paragraph about our ability to continue as a going concern.





The
report of our auditors on our consolidated financial statements for the years
ended December 31, 2009 and 2008, contains an explanatory paragraph about
our ability to continue as going concern.





We
will require substantial amounts of additional capital from external
sources.





We will
require substantial additional funds to implement our marketing plan and pursue
expansion of our business IT segment.  The extent of our future
capital requirements will depend on many factors, including competing
technological and market developments; effective commercialization activities;
establishment of strategic alliances, joint ventures, or other collaborative
arrangements; and other factors not within our control.  We anticipate
that we will seek required funds from external sources.





We may
seek required funds through the sale of equity or other
securities.  Our ability to complete an offering on acceptable terms
will depend on many factors, including the condition of the securities markets
generally and for companies such as us at the time of such offering; the
business, financial condition, and prospects at the time of the proposed
offering; our ability to identify and reach a satisfactory arrangement with
prospective underwriters; and various other factors, many of which are outside
our control.  There can be no assurance that we will be able to
complete an offering on terms favorable to us or at all.  The issuance
of additional equity securities may dilute the interest of our existing
shareholders or may subordinate their rights to the superior rights of new
investors.





We may
also seek additional capital through strategic alliances, joint ventures, or
other collaborative arrangements.  Any such relationships may dilute
our interest in any specific project and decrease the amount of revenue that we
may receive from such project.  There can be no assurance that we will
be able to negotiate any strategic investment or obtain required additional
funds on acceptable terms, if at all.  In addition, our cash
requirements may vary materially from those now planned because of the results
of future research and development; results of product testing; potential
relationships with our strategic or collaborative partners; changes in the focus
and direction of our research and development programs; competition and
technological advances; issues related to patent or other protection for
proprietary technologies; and other factors.





If
adequate funds are not available, we may be required to delay, reduce the scope
of, or eliminate our planned marketing efforts; to obtain funds through
arrangements with strategic or collaborative partners that may require us to
relinquish rights to certain of our technologies, product candidates, or
products that we would otherwise seek to develop or commercialize ourselves; or
to license our rights to such products on terms that are less favorable to us
than might otherwise be available.





Product
development still comprises a substantial part of our operations, and we face
significant technological uncertainties.





Our
prospects must be considered in light of the risks, expenses, delays, problems,
and difficulties that we may encounter in entering new markets with new business
IT solutions, including:




·
            our
      ability to maintain and expand a sales network to expose our product to
      potential customers and to complete
sales;




·
            our
      ability to manage our limited working
capital;




·
            our
      ability to scale systems and fulfillment capabilities to accommodate any
      growth of our business;




·
            our
      ability to meet competition;












·
            our
      ability to access and obtain additional capital when
    required;




·
            our
      ability to develop and maintain strategic relationships;
    and




·
            our
      dependence upon key personnel.





We cannot
be certain that our business strategy will be successful or that it will
successfully address these risks.





Recently
adopted national healthcare legislation may adversely affect our
business.





The
recently adopted national healthcare legislation will implement a number of
changes in the way healthcare is delivered and paid for in the United States,
which may result in market disruptions and other currently unforeseen
circumstances that may limit or reduce the demand for our services or the
ability of our current and future customers to pay for them.  We
cannot predict the potential negative impact of these legislative reforms on our
business.





If
we are unable to protect our intellectual property, we may lose a valuable asset
or incur costly litigation to protect our rights.





Our
success will depend, in part, upon our intellectual property
rights.  Litigation to enforce intellectual property rights or to
protect trade secrets could result in substantial costs and may not be
successful.  Any inability to protect intellectual property rights
could seriously harm our business, operating results, and financial
condition.  In addition, the laws of certain foreign countries may not
protect intellectual property rights to the same extent as do the laws of the
United States.  Our means of protecting our intellectual property
rights in the United States or abroad may not be adequate to fully protect those
intellectual property rights.





Claims
that we infringe upon the intellectual property rights of others could be costly
to defend or settle.





Litigation
regarding intellectual property rights is common in the software
industry.  We expect that software technologies and services may be
increasingly subject to third-party infringement claims as the number of
competitors in our industry segment grows and the functionality of products and
services in different industry segments overlaps.  We may from time to
time encounter disputes over rights and obligations concerning intellectual
property.  Although we believe that our intellectual property rights
will be sufficient to allow us to market products and services without incurring
third-party liability, third parties may bring claims of infringement against
us.  These claims may or may not have merit.  Any litigation
to defend against claims of infringement or invalidity could result in
substantial costs and diversion of resources.  Furthermore, a party
making a claim could secure a judgment that requires us to pay substantial
damages.  A judgment could also include an injunction or other court
order that could prevent us from selling products or services.  Our
business, operating results, and financial condition could be harmed if any of
these events occurred.





We
are heavily dependent on our executive officers and technical
personnel.





We are
dependent upon the continued participation and assistance of our key management
and technical personnel, including David Hempstead, Chief Executive Officer and
President, and Antoinette Knapp, Deputy Chief Executive Officer and Vice
President.  We do not have and generally do not intend to acquire
keyman life insurance on any of our executives.  We will require the
recruitment and retention of additional personnel, including technical advisors
and management, and the development of additional expertise by existing
management.  The inability to acquire such services or to develop such
expertise could have a material adverse effect on our operations.












We
will need to hire and retain a number of key employees who may be difficult to
find.





Growth
may require us to hire additional personnel, including software engineers,
systems engineers, customer support personnel, marketing personnel, and
operational personnel.  Competition for these individuals is intense,
and we may not be able to attract or retain additional highly qualified
personnel in the future.  The failure to attract, motivate, and retain
such additional employees could seriously harm our business.





Any
substantial increase in sales will require skilled management of
growth.





As our
operations expand, our success will depend on our ability to manage continued
growth, including integration of our executive officers, directors, and
consultants into an effective management and technical team; to formulate
strategic alliances, joint ventures, or other collaborative arrangements with
third parties; to commercialize and market our proposed products and services;
and to monitor and manage these relationships on a long-term
basis.  If our management is unable to integrate these resources and
manage growth effectively, the quality of our products and services, our ability
to retain key personnel, and the results of our operations would be materially
and adversely affected.





If
we provide software products that are unreliable, we could lose customers and
revenues.





Software
products may contain unknown and undetected errors or performance
problems.  Many serious defects in software products are frequently
found during the period immediately following introduction of new or
enhancements to existing products.  Although we will attempt to
resolve all errors we believe our customers would consider serious, no
technology is error-free.  Undetected errors or performance problems
may be discovered after customers begin using our products.  This
could result in lost revenues or delays in customer acceptance and could be
detrimental to our reputation, which could harm our business, operating results,
and financial condition.





We
will be exposed to the risk of product liability.





The
implementation of our business plan entails risks of product
liability.  We will seek to obtain product liability insurance, but
there can be no assurance that we will be able to obtain such insurance or, if
we are able to do so, that we will be able to do so at rates that will make it
cost-effective.  Any successful product liability claim made against
us could substantially reduce or eliminate any economic return to us or our
shareholders and could have a significant adverse impact on our
future.





If
we become subject to service-related liability claims, they could be
time-consuming and costly to defend.





Because
our customers will use our products and services for mission-critical
applications in the medical and other fields, any errors, defects, or other
performance problems could result in liability or financial or other damages to
our customers.  They could seek damages for losses from us, which, if
successful, could have a material adverse effect on our business, operating
results, or financial condition.  Although we intend for our
agreements with customers to contain provisions designed to limit exposure to
service-related liability claims, existing or future laws or unfavorable
judicial decisions could negate these limitations of liability
provisions.  A service-related liability claim brought against us,
even if unsuccessful, could be time-consuming and costly to defend and could
harm our reputation.












We
are authorized to issue substantial additional shares of stock, which would
dilute the ownership of our stockholders.





We have
authorized 100,000,000 shares of common stock and 5,000,000 shares of preferred
stock.  Of these, 21,881,863 shares of common stock and 1,200,000
shares of preferred stock are issued and outstanding as of the date of this
report.  Our board of directors also has authority, without action or
vote of the shareholders, to issue all or part of the authorized but unissued
shares.  Any such issuance will dilute the percentage ownership of
shareholders and may further dilute the book value of the shares of common
stock.








ITEM
1B.  UNRESOLVED STAFF COMMENTS





This item
is not applicable to our company.








ITEM
2.  PROPERTIES





Our
principal executive offices are located at 1651 Alvin Ricken Drive, Pocatello
Idaho, where we lease approximately 5,500 square feet of office space from an
unrelated party at $1,700 per month, through May 1, 2010.








ITEM
3.  LEGAL PROCEEDINGS





We are
not a party to any material legal proceedings and no material legal proceedings
have been threatened by us or, to the best of our knowledge, against
us.








ITEM
4.  (REMOVED AND RESERVED)




13











PART
II








ITEM
5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES








The
following table sets forth for the periods indicated the high and low bid prices
for our common stock as quoted under the symbol TDYS on the Over-The-Counter
Bulletin Board.  Such quotations do not include commissions or retail
mark-ups or mark-downs and may not represent actual transactions:





Low
            
            High2010:First
      Quarter to March 26, 2010
            $0.04
            
            $0.042009:Fourth
      Quarter
            0.05
            
            0.06Third
      Quarter
            0.07
            
            0.15Second
      Quarter
            0.09
            
            0.15First
      Quarter
            0.06
            
            0.152008:Fourth
      Quarter
            0.05
            
            0.10Third
      Quarter
            0.05
            
            0.10Second
      Quarter
            0.05
            
            0.16First
      Quarter
            0.10
            
            0.30





On March
26, 2010, the closing price per share of our common stock on the
Over-The-Counter Bulletin Board was $0.04.





We have
never paid cash dividends on our common stock and do not anticipate that we will
pay dividends in the foreseeable future.  We intend to reinvest any
future earnings to further expand our business.  We estimate that, as
of March 30, 2010, we had approximately 820 stockholders.





Equity
Compensation Plans





The
following table provides information respecting our compensation plans
(including individual compensation arrangements) under which our equity
securities are authorized for issuance.





Plan
      Category
            
            Number
      of
              Securities
      To Be
              Issued
      upon Exercise
              of
      Outstanding Options,
              Warrants
      and Rights
              (a)
            
            Weighted-Average
              Exercise
      Price of
              Outstanding
      Options,
              Warrants
      and Rights
              (b)
            
            Number
      of Securities
              Remaining
      Available for
              Future
      Issuance under
              Equity
      Compensation
              Plans
      (excluding securities
              reflected
      in column (a))(c)Equity
      compensation plans
              approved
      by security holders
            
            3,497,000
            
            $0.10
            
            4,497,000Equity
      compensation plans not
              approved
      by security holders
            
            --
            
            --
            
            --Total
            
            3,497,000
            
            $0.10
            
            4,497,000













Issuance
of Series A Preferred Stock





On
November 12, 2009, the executive compensation committee consisting of our two
independent directors approved the issuance of 600,000 Series A Preferred
Stock to each of David W. Hempstead and Antoinette R. Knapp for
services.  Each share of Series A Preferred Stock is entitled to
100 votes, voting with the common stock as a single class, except when voting as
a separate class is required by law, and to 1/20th of the dividends on common
stock and in distributions in dissolution and liquidation.  The stock
was valued at $26,728 per recipient.  See Note 4, Stockholders’
Equity, of the Notes to Consolidated Financial Statements.





This
transaction was effect in reliance on the exemption from registration set forth
in Section 4(2) of the Securities Act for transactions not involving a public
offering.  The recipients of the stock are our officers, directors,
and operating executives and are, therefore, accredited
investors.  The securities were acquired for investment and bear a
restrictive legend.  The transaction was effected through direct
communications between the recipient and the members of the executive
compensation committee.  No cash proceeds were received by the company
for this issuance, and no underwriter participated in the
transaction.





Issuance
of Common Stock to Directors





On
December 28, 2009, we issued 150,000 shares of common stock to each of our two
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.





These
grants were effected in reliance on the exemption from registration set forth in
Section 4(2) of the Securities Act for transactions not involving a public
offering.  The recipients of the stock are our outside directors, who
are accredited investors.  The securities were acquired for investment
and bear a restrictive legend.  The transaction was effected through
direct communications between the recipient and our executive
officers.  No cash proceeds were received by us in this issuance, and
no underwriter participated in the transaction.








ITEM
6.  SELECTED FINANCIAL DATA





This item
is not applicable to our company.








ITEM
7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





The
following discussion should be read in conjunction with our audited consolidated
financial statements and notes to our financial statements included elsewhere in
this report.  This discussion contains forward-looking statements that
involve risks and uncertainties.  Actual results could differ
materially from those anticipated in these forward-looking statements as a
result of various factors discussed elsewhere in this report.












Certain
information included herein contains statements that may be considered
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, such as statements relating to our
anticipated revenues, gross margin and operating results, future performance and
operations, plans for future expansion, capital spending, sources of liquidity,
and financing sources.  Such forward-looking information involves
important risks and uncertainties that could significantly affect anticipated
results in the future, and accordingly, such results may differ from those
expressed in any forward-looking statements made herein.  These risks
and uncertainties include those relating to our liquidity requirements, the
continued growth of the mobility software industry, the success of our product
development, marketing and sales activities, vigorous competition in the
software industry, dependence on existing management, leverage and debt service
(including sensitivity to fluctuations in interest rates), domestic or global
economic conditions, the inherent uncertainty and costs of prolonged arbitration
or litigation, and changes in federal or state tax laws or the administration of
such laws.





Overview





We
optimize business and IT processes by utilizing systems engineering
methodologies, strategic development, and integration to add efficiencies and
value to our customers’ business processes and to help our customers identify
critical success factors in their business.





We
provide business IT solutions to the healthcare industry.  We are
expanding our service offerings into selected other professional industries as
those markets develop and as we develop new applications for our integrated
system of radio frequency identification (RFID) and software solutions for
tracking, management, and diagnostic systems.





In 2008
and until the fourth quarter of 2009, we also were engaged in providing business
IT solutions to the livestock segment through a variable interest subsidiary,
Southfork Solutions, Inc., which is developing electronic livestock tracking
systems, in which we had an approximately 39% interest at December 31, 2009 and
2008.  Effective October 2009, we are no longer in management or
financial control of this entity, although we continue to hold our approximately
39% minority interest.  Effective September 30, 2009, we changed from
the variable interest consolidation method of accounting for this entity to the
cost method of accounting for this entity.  See Note 6, Variable
Interest Entities, of the Notes to Consolidated Financial
Statements.





Description
of Expenses





General
and administrative expenses consist primarily of salaries and related costs for
accounting, administration, finance, human resources, and information
systems.





Professional
fees expenses consist primarily of fees related to legal, outside accounting,
auditing, and investor relations services.





Selling
and marketing expenses consist primarily of advertising, promotional activities,
trade shows, travel, and personnel-related expenses.





Research
and development expenses consist of payroll and related costs for software
engineers, management personnel, and the costs of materials used by these
employees in the development of new or enhanced product offerings.












In
accordance with Financial Accounting Standards Board, or FASB, Accounting
Standards Codification (“ASC”) 985, “Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed,” development costs
incurred in the research and development of new software products to be sold,
leased, or otherwise marketed are expensed as incurred until technological
feasibility in the form of a working model has been
established.  Internally generated, capitalizable software development
costs have not been material to date.  We have charged our software
development costs to research and development expense in our statements of
operations.





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 lives of the
assets.  Gains or losses on dispositions of property and equipment are
included in the results of operations when realized.





Results
of Operations





Comparison
of Years Ended December 31, 2009 and 2008





Revenues





Our
revenue was $867,341 and $1,310,584 for 2009 and 2008, respectively,
representing a decrease of $443,243, or 34%, in 2009.  The decrease in
revenue in 2009 was due to the loss of our service contract with a regional
hospital at the end of the second quarter of 2009 following a change in
ownership and management at the hospital.





Cost
of Revenue





Our cost
of revenue was $336,974 and $466,117 for 2009 and 2008, respectively,
representing a decrease of $129,143, or 28%, in 2009.  The gross
margin percentage on revenue was 61% and 64% for 2009 and 2008,
respectively.  The decrease in the gross margin percentage for 2009
was due to a higher percentage of revenue from hardware sales rather than from
service sales.  Hardware sales have a significantly lower profit
margin than service sales.





Although
the net changes and percent changes with respect to our revenues and our cost of
revenue for 2009 and 2008 are summarized above, these trends should not be
viewed as a definitive indication of our future results.





Operating
Expenses





General and Administrative —
General and administrative expenses for our continuing operations, including
noncash compensation expense, were $518,974 and $483,959 for 2009 and 2008,
respectively, representing an increase of $35,015, or 7%, in
2009.  The increase in our general and administrative expenses in
2009, as compared to 2008, reflects the valuation of the preferred stock issued
to our executives in 2009, as well as the increased expenses associated with
improving our internal computing infrastructure for future growth.





Professional Fees —
Professional fees expenses for our continuing operations, including noncash
compensation expense, were $53,793 and $70,079 for 2009 and 2008, respectively,
representing a decrease of $16,286, or 23%, in 2009.  The decrease in
our professional fees expenses from 2009, as compared to 2008, reflects
stock-paid investor relations services utilized in the first quarter of 2008,
but not in 2009.












Selling and Marketing —
Selling and marketing expenses for our continuing operations, including noncash
compensation expense, were $112,035 and $157,483 for 2009 and 2008,
respectively, representing a decrease of $45,448, or 29%, in
2009.  The decrease in our selling and marketing expenses from 2009,
as compared to 2008, reflects our focus on optimizing our sales process in the
business IT services segment.





Researchand Development— Research
and development expenses for our continuing operation, including noncash
compensation expense, were $194,003 and $111,435 for 2009 and 2008,
respectively, representing an increase of $82,568, or 74%, in
2009.  The increase in research and development expenses in 2009, as
compared to 2008, reflects the increased RFID research and development activity
in the healthcare-related field after the discontinuation of our operations in
the livestock segment.





Interest
expense was $30,946 and $30,861 in 2009 and 2008, respectively, an increase of
$85, or less than 1%, in 2009.  The increase in interest expense from
2009, as compared to 2008, was immaterial.





Liquidity
and Capital Resources





At
December 31, 2009, our principal sources of liquidity for our continuing
operations consisted of $123,784 of cash, as compared to $77,914 of cash at
December 31, 2008.  In addition, our stockholders’ deficit was
$431,147 at December 31, 2009, compared to stockholders’ deficit of
$894,044 at December 31, 2008, a decrease in the deficit of
$462,897.





Our
continuing operations used net cash of $248,544 during 2009, as compared to
providing $84,691 of net cash during 2008.  The $333,235 increase in
the net cash used by our continuing operating activities during 2009 primarily
resulted from the effect of the reduced revenue from the loss of our contract
with a regional hospital, which resulted in reduced available operating
cash.





Investing
activities for our continuing operations in 2009 used $11,125 of net cash, as
compared to $18,953 of net cash used during 2008.  The decrease in net
cash used was due to less computer equipment being purchased in 2009 as compared
to 2008.





Financing
activities for our continuing operations provided $100,163 during 2009, compared
to using net cash of $205,255 during 2008.  The increase of $305,418
of net cash provided in financing activities was due to additional notes payable
in 2009 while notes payable payments decreased in 2009.





We are
focusing our efforts on increasing revenue while we explore external funding
alternatives.  We currently have contracts in place for future
deliveries of our consulting services, our AeroMD product, and other solutions
that we believe will cover our minimum expenditures for operating costs and
minimum installments due on our other indebtedness to nonaffiliates during the
next 12 months.  We expect that additional sales will enable us to
increase our payments on indebtedness and support the development of other
products.  Although our independent auditors have expressed
substantial doubt about our ability to continue as a going concern, we feel that
our revenues are sufficient for our IT business solutions segment to continue as
a going concern.  However, in order to expand our product offerings,
we expect that we will require additional investments and sales.





As we
continue development of new products and identify specific commercialization
opportunities, we will focus on those product markets and opportunities for
which we might be able to get external funding through joint venture agreements,
strategic partnerships, or other direct investments.












We have
no significant contractual obligations or commercial commitments not reflected
on our balance sheet as of this date.





Critical
Accounting Policies





We have identified the policies
outlined below as critical to our business operations and an
understanding of our results of operations.  The list is not intended to be a comprehensive
list of all of our accounting policies.  In many cases, the accounting treatment of
a particular transaction is specifically dictated by accounting principles
generally accepted in the United States, with no need for management’s judgment in
their application.  The impact and any associated risks related to these
policies on our business operations is discussed throughout Management’s
Discussion and Analysis of Financial Condition and Results of Operations
when such policies affect our
reported and expected financial results.  For a detailed discussion on the application
of these and other accounting policies, see the notes to the December 31, 2009,
consolidated financial statements.  Note that our preparation of theconsolidatedfinancial statements requires us to
make estimates and
assumptions that affect the reported amount of assets and liabilities,
disclosure of contingent assets
and liabilities at the date of ourconsolidatedfinancial statements, and the reported amounts of
revenue and expenses during the reporting period.  There can
be no assurance that actual results will not differ from those
estimates.





Revenue
Recognition





Our
AeroMD EMR software is provided as turnkey software that has been customized for
specific medical specializations.  We typically install the software
at the customer’s location for a fee and charge 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 one- or two-year license.  At the end of their contracts,
customers may continue using AeroMD by entering into a new license with
us.  We also sell installation and post-contract telephone support
service contracts on an hourly basis.  We do not provide any rights of
return or warranties on our AeroMD EMR software.





Revenue
from software licenses and related installation and support services is
recognized when earned 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 ability to collect is
reasonably assured.  Amounts billed to 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
telephone support service contracts is recognized as the services are provided,
determined on an hourly basis.





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.





We also
provide information technology management consulting services.  To
date, these services have been primarily in the hospital
industry.  These services are paid for on a monthly basis and for a
contracted monthly fee, which is not cancelable or
refundable.  Revenue for these services is recognized over the
contract period.










Income
Taxes





We
utilize 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 carry-forwards, and are measured
using the enacted tax rates and laws that will be in effect when the temporary
differences and carry-forwards 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.





Recent
Accounting Pronouncements





In June 2009, the FASB issued
Accounting Standards Codification, or ASC, No. 105, Accounting Standards
CodificationTMand the Hierarchy of Generally
Accepted Accounting Principles.  The FASB Accounting Standards
CodificationTM (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 issued under the authority of federal securities laws,
however, will continue to be the source of authoritative generally accepted
accounting principles for Securities and Exchange Commission
registrants.  Effective September 30, 2009, all references made
to GAAP in our 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 our 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 Topic 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 Topic 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 our
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.  We
are evaluating the impact the adoption of FASB ASC 860 will have on our
financial statements.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities.”











ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





This item
is not applicable to our company.








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
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS


ON
ACCOUNTING AND FINANCIAL DISCLOSURE





None.








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 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.





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.








ITEM
9B.  OTHER INFORMATION





On
November 12, 2009, the executive compensation committee consisting of our two
independent directors approved the issuance of 600,000 Series A Preferred
Stock to each of David W. Hempstead and Antoinette R. Knapp for
services.  Each share of Series A Preferred Stock is entitled to
100 votes, voting with the common stock as a single class, except when voting as
a separate class is required by law, and to 1/20th of the dividends on common
stock and in distributions in dissolution and liquidation.  The stock
was valued at $26,728 per recipient.  See Note 2, Stockholders’
Equity, of the Notes to Consolidated Financial Statements.





On
December 23, 2009, we borrowed an aggregate of $150,000 in separate loans from
three programs administered by a regional economic development enterprise, the
Southeast Idaho Council of Governments, Inc., to obtain additional working
capital.  The loans bear interest at 7% per annum and are repayable in
60 equal consecutive monthly payments of principal and interest amortized over a
period of 120 months, with the entire unpaid balance due on the date the 60th
monthly installment is due.  The loans are secured by encumbrances of
our equipment and inventory and are guaranteed by David W. Hempstead and
Antoinette Knapp-Hempstead, executive officers, directors, and principal
stockholders.  Such guarantees are secured by personal property of the
guarantors.















PART
III








ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE








Name
            
            Age
            
            TitleDavid
      W. Hempstead
            
            46
            
            Chairman
      of the Board, Chief Executive Officer,
              Chief
      Financial Officer, and PresidentAntoinette
      R. Knapp
            
            45
            
            Deputy
      Chief Executive Officer, Vice President,
              Secretary/Treasurer,
      Chief Technology Officer,
              and
      DirectorOrville
      J. Hendrickson
            
            85
            
            Director
      and Member of Executive
              Compensation
      CommitteeLarry
      J. Ybarrondo
            
            72
            
            Director
      and Member of Executive
              Compensation
      Committee





David
Hempstead has served as our Chief Executive Officer, Chief Financial
Officer, President, and Chairman of the Board since TetriDyn-Idaho’s inception,
and assumed these positions with us upon consummation of our share exchange
transaction with TetriDyn-Idaho.  Mr. Hempstead sets our strategic
direction and works closely with our management team, board of directors, and
advisors on all aspects of our operations, from product development to
marketing.  Mr. Hempstead was also Chief Executive Officer, President,
and Chairman of Southfork Solutions, Inc., our variable interest entity, from
its inception until October 2009.  He has 25 years of experience in
management, accounting, financial forecasting, business development, marketing,
and software design, development, and maintenance.  Mr. Hempstead
brings a unique blend of business and technical expertise to our
team.  He has capitalized on his diverse experience by frequently
serving as the liaison between our technical and business divisions, enabling
efficient and productive communication.  Mr. Hempstead has been
instrumental in the development of our many strategic alliances and in providing
the vision and focus for the company.  Education: BS, Accounting with
Computer Science Minor, University of Idaho.  We believe Mr. Hempstead
contributes significantly to our board because of his management experience in
software enterprises, financial background, and software and research
experience, which enable him to provide strategic direction for our
growth.





Antoinette
Knapp serves as our Deputy Chief Executive Officer, Vice President,
Secretary/Treasurer, and a director.  Ms. Knapp served as our Chief
Technology Officer, Vice President, and a director since TetriDyn-Idaho’s
inception and as its Secretary and Treasurer since May 2004, and assumed these
positions with us upon consummation of our share exchange transaction with
TetriDyn-Idaho.  Ms. Knapp administers all of our corporate and
finance activities.  Ms. Knapp also directs our software development
activities and coordinates product development with marketing and
sales.  Ms. Knapp was also Vice President of Finance and Information
and Technologies, Secretary/Treasurer, and a director of Southfork Solutions,
Inc., from its inception until October 2009.  Ms. Knapp has 25 years
of experience in management, finance, software management, and software
development.  Ms. Knapp has also served as adjunct faculty for
University of Idaho where she taught Computer Science
courses.  Education: MS, Computer Science, University of Idaho; BS,
Applied Mathematics, University of Idaho.  Ms. Knapp provides to our
board of directors experience in software development and project management, as
well as experience in financial statement preparation and regulatory
reporting.












Orville J.
Hendrickson was elected to TetriDyn-Idaho’s board of directors in July
2004, and became a director of ours upon consummation of our share exchange
transaction with TetriDyn-Idaho; however, Mr. Hendrickson served as a valued
advisor to TetriDyn-Idaho from its inception in providing contacts and advice in
legal, accounting, technical, and business areas.  Mr. Hendrickson
serves on our board’s compensation committee.  He is a retired
Lieutenant Colonel for the United States Air Force and spent three years
teaching Mechanical Engineering at the University of Washington.  Mr.
Hendrickson served for 38 years as Executive Vice President and 50% owner of
Industrial Contractor, Inc., a specialty mechanical construction company that
completed over $1 billion in today’s dollars of successful contracts and was the
sixth company in America to receive the original Nuclear Construction ASME
Stamp.  Mr. Hendrickson continues to pursue new ventures by starting
Productrade Insumos Organicos Occidente S de RL de CV, a Mexican enterprise, in
which patented organic soil is developed, in addition to developing organic
polymer that allows farmers to raise produce with 60% savings of the water
required and with approximately 30% time savings from planting to
maturity.  Education: BS, Mechanical Engineering (with nine additional
minors including Accounting and Mathematics), University of
Washington.  Mr. Hendrickson was chosen to become a director
principally due to his decades-long experience as an executive in managing
enterprises with large long-term private and government contracts and his
entrepreneurship in starting new businesses.





Larry J.
Ybarrondo, Ph.D. was elected to TetriDyn-Idaho’s board of directors in
July 2004, and became a director of ours upon consummation of our share exchange
transaction with TetriDyn-Idaho.  Dr. Ybarrondo serves on the board’s
compensation committee.  Dr. Ybarrondo founded and built SCIENTECH,
Inc., a 1,200-person, national, high-technology engineering services company
with offices in over 30 cities and six foreign countries.  His work
experience includes responsibility for operation of four nuclear reactor
facilities, major advisory and programmatic roles for the U.S. Nuclear
Regulatory Commission (NRC) and the U.S. Department of Energy (DOE), and a broad
range of general management issues including planning, facility design,
construction, fabrication, and modification.  Customer responsiveness,
excellence in performance, safety, training, maintenance, and total quality
management were strongly emphasized in Dr. Ybarrondo’s work.  Dr.
Ybarrondo has over 30 years experience in the technological, operational, and
managerial aspects of nuclear reactor technology.  His experience has
included senior management positions with a national laboratory organization,
consulting to prestigious groups, and strategic, tactical, and operational
planning for a diverse set of large and nationally significant
projects.  Education:  Ph.D., Mechanical Engineering,
Georgia Institute of Technology; MS, Mechanical Engineering, Northwestern
University; BS, Mechanical Engineering, University of Detroit; Ten-Week Program
for Senior Executives, Massachusetts Institute of Technology, Sloan Business
School.  We chose Mr. Ybarrondo to become a director principally
because of his strong educational background in management, honed in decades of
successful management of large technical enterprises and professional
engineering service firms.





Unless a
director dies, resigns, or is removed earlier, each director serves at least two
years or until the next annual meeting of shareholders, provided that each
director will serve until such director’s successor is elected and
qualified.





David W.
Hempstead and Antoinette R. Knapp are married.





Board
of Directors’ Committees





Both
Orville J. Hendrickson and Larry J. Ybarrondo are considered independent members
of our board of directors under NASD Rule 4200(a)(15).










Our
compensation committee is composed of Messrs. Hendrickson and Ybarrondo, our
independent directors.  Our board as a whole acts as the audit
committee.  Our board of directors has concluded that Mr. Hendrickson,
an independent director, serves as the audit committee financial
expert.  Our board of directors does not have a separate nominating
committee.  The entire board acts as the nominating
committee.





Code
of Ethics





We have
adopted a code of ethics that applies to all of our employees, including our
executive officers, a copy of which is included as an exhibit to this
report.





Corporate
Governance Matters





We have
not adopted any material changes to the procedures by which security holders may
recommend nominees to our board of directors.








ITEM
11.  EXECUTIVE COMPENSATION





The
following table sets forth, for the last completed fiscal year, the dollar value
of all cash and noncash compensation earned by any person that was our principal
executive officer, or PEO, during the preceding fiscal year and each of our
other two highest compensated executive officers earning more than $100,000
during the last fiscal year (together, the “Named Executive
Officers”):





Name
      and Principal Position
            Year
              Ended
              Dec.
      31
            Salary
              ($)
            Bonus
              ($)
            Stock
              Award(s)
              ($)(1)
            Option
              Awards
      ($)
            Non-
              Equity
              Incentive
              Plan
              Compen-
              sation
            Change
      in
              Pension
              Value
      and
              Non-Qualified
              Deferred
              Compen-
              sation
              Earnings
      ($)
            All
      Other
              Compen-
              sation
      ($)(2)
            Total
      ($)(a)
            (b)
            (c)
            (d)
            (e)
            (f)
            (g)
            (h)
            (i)
            (j)David
      W. Hempstead
            2009
            62,585(3)
            --
            26,728
            --
            --
            --
            12,273
            101,586PEO
            2008
            107,308
            --
            --
            54,928(4)
            --
            --
            8,877
            171,113Antoinette
      R. Knapp
            2009
            56,560(5)
            --
            26,728
            --
            --
            --
            83
            83,371Deputy
      PEO
            2008
            95,385
            --
            --
            54,928(4)
            --
            --
            56
            150,369


_______________




(1)
            Equivalent
      to the enterprise value as of the date of issue and multiplied by 1/20 for
      the total number of Series A Preferred Shares issued on November 12,
      2009.


(2)
            Other
      compensation includes the value of fringe benefits including group life
      benefit and vehicle use benefit.


(3)
            Mr.
      Hempstead voluntarily forfeited payment of the amount by which his agreed
      salary of $108,000 exceeded the amount
reported.


(4)
            Equivalent
      to the dollar amount to be recognized as compensation expense for
      financial reporting purposes under FASB ASC 505, “Share-Based
      Payment.”  All options are fully vested and have a term
      of five years.


(5)
            Ms.
      Knapp voluntarily forfeited payment of the amount by which her agreed
      salary of $96,000 exceeded the amount
reported.





Our
employment agreements with Mr. Hempstead and Ms. Knapp engage them as at-will
employees that we can terminate at any time, with or without
cause.  Both Mr. Hempstead and Ms. Knapp agree to maintain the
confidentiality of company information, assign to us all of their inventions
during employment, and not compete with us for three years after their
employment by us terminates for any reason.  Their annual compensation
is determined annually by the compensation committee.  Mr. Hempstead’s
and Ms. Knapp’s 2008 salaries of $108,000 and $96,000, respectively, per year
continued at the same
rate for 2009 and into 2010, subject to adjustment by the
board.  However, Mr. Hempstead and Ms. Knapp voluntarily forfeited a
portion of their 2009 salaries to reduce the outgoing cash flow of the
Company.












Outstanding
Equity Awards at Fiscal Year-End





The
following table reflects outstanding stock option awards classified as
exercisable and unexercisable as of December 31, 2009, for each of the
Named Executive Officers.  The table also reflects unvested and
unearned stock awards:





Option
      Awards
            Stock
      AwardsName
            Number
      of
              Securities
              Underlying
              Unexer-
              cised
              Options
      (#)
              Exer-
              cisable(1)
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
      (#)
              Unexercisable
            Equity
              Incentive
              Plan
              Awards:
              Number
      of
              Securities
              Underlying
              Unexercised
              Unearned
              Options(#)
            Option
              Exercise
              Price($)
            Option
              Expiration
              Date
            Number
      of
              Shares
      or
              Units
      of
              Stock
              Held
      That
              Have
      Not
              Vested(#)
            Market
              Value
      of
              Shares
      or
              Units
      of
              Stock
              That
      Have
              Not
              Vested($)
            Equity
              Incentive
              Plan
              Awards:
              Number
      of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              That
      Have
              Not
              Vested(#)
            Equity
              Incentive
              Plan
              Awards:
              Market
              or
              Payout
              Value
      of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              That
              Have
              Not
              Vested($)David
      W. Hempstead
            900,000
            --
            --
            0.11
            4/25/2013
            --
            --
            --
            --PEO
            720,000
            --
            --
            0.10
            5/31/2012
            --
            --
            --
            --Antoinette
      R. Knapp
            900,000
            --
            --
            0.11
            4/25/2013
            --
            --
            --
            --Deputy
      PEO
            640,000
            --
            --
            0.10
            5/31/2012
            --
            --
            --
            --




(1)   All
of the foregoing options are fully vested and were unexercised at December 31,
2009.





Directors’
Compensation





The
following table sets forth the compensation earned by or awarded to each
non-employee director who served on our board of directors in
2009.  Directors who are employees are not compensated for their
services:





Name
            Fees
              Earned
              or
              Paid
      in
              Cash
              ($)(1)
            Stock
              Awards
              ($)(2)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
              Plan
              Compensation
      ($)
            Change
      in
              Pension
      Value
              And
              Nonqualified
              Deferred
              Compensation
              Earnings
            All
      Other
              Compen-
              sation
              ($)(3)
            Total
      ($)Orville
      J. Hendrickson
            --
            8,400
            --
            --
            --
            --
            8,400Larry
      J. Ybarrondo
            --
            8,400
            --
            --
            --
            --
            8,400




(1)   Non-employee
directors received 150,000 shares of common stock each as annual cash compensation on
Decmeber 28, 2009.


(2)
            Equivalent
      to the dollar amount to be recognized as compensation expense for
      financial reporting purposes under FASB ASC 505, “Share-Based
      Payment.”











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





The
following table sets forth, as of March 30, 2010, the outstanding shares of
common stock owned of record or beneficially by each person that owned of
record, or was known by us to own beneficially, more than 5% of our issued and
outstanding shares, and the name and share holdings of each director and all of
the executive officers and directors as a group:





Name of Person or Group
            Nature of Ownership
            Amount
            Percent
            Common
      VotingEquivalent
            PercentPrincipal
      Stockholders:Sawtooth
      Meadows, LP(1)
            Common
      Stock
            12,279,111
            56.1%
            12,279,111
            8.7%Options
            3,160,000
            12.6
            3,160,000
            2.215,439,111
            61.7%
            15,439,111
            10.6Series
      A Preferred Stock(2)
            1,200,000
            100.0
            120,000,000
            84.6135,439,111
            93.4Directors:David
      W. Hempstead(1)
            Common
      Stock
            12,279,111
            56.1%
            12,279,111
            8.7Options
            3,160,000
            12.6
            3,160,000
            2.215,439,111
            61.7%
            15,439,111
            10.6Series
      A Preferred Stock(2)
            1,200,000
            100.0
            120,000,000
            84.6135,439,111
            93.4Antoinette
      R. Knapp(1)
            Common
      Stock
            12,279,111
            56.1%
            12,279,111
            8.7Options
            3,160,000
            12.6
            3,160,000
            2.215,439,111
            61.7%
            15,439,111
            10.6Series
      A Preferred Stock(2)
            1,200,000
            100.0
            120,000,000
            84.6135,439,111
            93.4Orville
      J. Hendrickson
            Common
      Stock
            163,383
            *
            163,383
            *Options
            100,000
            *
            100,000
            *263,383
            1.2%
            263,383
            *Larry
      J. Ybarrondo
            Common
      Stock
            479,020
            2.2%
            479,020
            *Options
            100,000
            *
            100,000
            *579,020
            2.6%
            579,020
            *All
      Executive Officers and Directors as a Group (4
      persons):
            Common
      Stock
            12,921,514
            59.1%
            12,921,514
            9.1Options
            3,360,000
            13.3
            3,360,000
            2.316,281,514
            64.5%
            16281,514
            11.2Series
      A Preferred Stock(2)
            1,200,000
            100.0
            120,000,000
            84.6136,281,514
            93.8%







*      Less
than 1%.


(1)
            Consists
      of 25,920 shares and options to purchase 1,620,000 shares owned of record
      by David W. Hempstead; 25,920 shares and options to purchase 1,540,000
      shares owned of record by Antoinette R. Knapp; 12,227,271 shares owned of
      record by Sawtooth Meadows, LP., and 600,000 shares of Series A Preferred
      Stock owned by each of David W. Hempstead and Antoinette R.
      Knapp.  David W. Hempstead and Antoinette R. Knapp, husband and
      wife, are owners of, and control, Sawtooth Meadows, LP, and as such, each
      is deemed to be the beneficial owner of shares owned of record by Sawtooth
      Meadows, LP.


(2)
            Each
      share of Series A Preferred Stock is entitled to 100 votes per share,
      voting with the common stock as a single class, except when required to
      vote separately by law, and is equal to 1/20th of a share of common stock
      in the case of dividends and distributions in the event of dissolution and
      liquidation.













ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE





The terms
of the following transactions were not the result of arm’s-length
negotiations.





Issuance
of Common Stock





During
2008, our variable interest entity, Southfork Solutions, Inc., granted to Five
Rivers Ranch Cattle Feeding LLC, an affiliate of a director of Southfork,
options to purchase 1,500,000 shares of Southfork for $500,000 on or before
April 2009, of which options to purchase 300,000 shares for $100,000 were
exercised during 2008.





The
foregoing numbers of shares of Southfork give effect to a three-for-one-forward
split of its outstanding stock effected in April 2008.





Issuance
of Series A Preferred Stock





On
November 12, 2009, the executive compensation committee consisting of our two
independent directors approved the issuance of 600,000 Series A Preferred
Stock to each of David W. Hempstead and Antoinette R. Knapp for
services.  Each share of Series A Preferred Stock is entitled to
100 votes, voting with the common stock as a single class, except when voting as
a separate class is required by law, and to 1/20th of the dividends on common
stock and in distributions in dissolution and liquidation.  The stock
was valued at $26,728 per recipient.  See Note 2, Stockholders’
Equity, of the Notes to Consolidated Financial Statements.





Working
Capital Loan Guarantees





On
December 23, 2009, we borrowed an aggregate of $150,000 in separate loans from
three programs administered by a regional economic development enterprise, the
Southeast Idaho Council of Governments, Inc., to obtain additional working
capital.  The loans bear interest at 7% per annum and are repayable in
60 equal consecutive monthly payments of principal and interest amortized over a
period of 120 months, with the entire unpaid balance due on the date the 60th
monthly installment is due.  The loans are secured by encumbrances of
our equipment and inventory and are guaranteed by David W. Hempstead and
Antoinette Knapp-Hempstead, executive officers, directors, and principal
stockholders.  Such guarantees are secured by personal property of the
guarantors.








ITEM
14.  PRINCIPAL ACCOUNTING FEES AND SERVICES





Audit
Fees





For our
fiscal year ended December 31, 2009, we were billed approximately $31,285 for
professional services rendered for the audit and reviews of our consolidated
financial statements.  For our fiscal year ended December 31, 2008, we
were billed approximately $27,921 for professional services rendered for the
audit and reviews of our consolidated financial statements.





Audit
Related Fees





For our
fiscal years ended December 31, 2009 and 2008, we did not incur any audit
related fees.










Tax
Fees





For our
fiscal years ended December 31, 2009 and 2008, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.





All
Other Fees





We did
not incur any other fees related to services rendered by our principal
accountant for the fiscal years ended December 31, 2009 and 2008.





Audit
and Non-Audit Service Preapproval Policy





In
accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated thereunder, the audit committee has adopted an
informal approval policy that it believes will result in an effective and
efficient procedure to preapprove services performed by the independent
registered public accounting firm.





Audit
Services.Audit services
include the annual financial statement audit (including quarterly reviews) and
other procedures required to be performed by the independent registered public
accounting firm to be able to form an opinion on our consolidated financial
statements.  The audit committee preapproves specified annual audit
services engagement terms and fees and other specified audit
fees.  All other audit services must be specifically preapproved by
the audit committee.  The audit committee monitors the audit services
engagement and may approve, if necessary, any changes in terms, conditions, and
fees resulting from changes in audit scope or other items.





Audit-Related
Services.Audit-related
services are assurance and related services that are reasonably related to the
performance of the audit or review of our consolidated financial statements,
which historically have been provided to us by the independent registered public
accounting firm and are consistent with the Securities and Exchange Commission’s
rules on auditor independence.  The audit committee preapproves
specified audit-related services within preapproved fee levels.  All
other audit-related services must be preapproved by the audit
committee.





Tax
Services.The audit
committee preapproves specified tax services that the audit committee believes
would not impair the independence of the independent registered public
accounting firm and that are consistent with Securities and Exchange
Commission’s rules and guidance.  The audit committee must
specifically approve all other tax services.





All Other
Services.Other services
are services provided by the independent registered public accounting firm that
do not fall within the established audit, audit-related, and tax services
categories.  The audit committee preapproves specified other services
that do not fall within any of the specified prohibited categories of
services.










Procedures.All proposals for
services to be provided by the independent registered public accounting firm,
which must include a detailed description of the services to be rendered and the
amount of corresponding fees, are submitted to the chairman of the audit
committee and the Chief Financial Officer.  The Chief Financial
Officer authorizes services that have been preapproved by the audit
committee.  If there is any question as to whether a proposed service
fits within a preapproved service, the audit committee chair is consulted for a
determination.  The Chief Financial Officer submits requests or
applications to provide services that have not been preapproved by the audit
committee, which must include an affirmation by the Chief Financial Officer and
the independent registered public accounting firm that the request or
application is consistent with the Securities and Exchange Commission’s rules on
auditor independence, to the audit committee (or its chair or any of its other
members pursuant to delegated authority) for approval.











PART
IV








ITEM
15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES


Exhibit
                Number
              
              Title
      of Document
              
              LocationItem
      3.
              
              Articles
      of Incorporation and Bylaws3.01
              
              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
              
              This
      filing.Item
      4.
              
              Instruments
      Defining the Rights of Security Holders, Including
    Debentures4.01
              
              Specimen
      stock certificate
              
              Incorporated
      by reference from the current report on Form 8-K filed June 7,
      2006.Item
      10.
              
              Material
      Contracts10.01
              
              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
              
              Location10.07
              
              Loan
      Agreement between TetriDyn Solutions, Inc., and Southeast Idaho Council of
      Governments, Inc., together with related promissory notes, dated December
      23, 2009
              
              This
      filing.Item
      14.
              
              Code
      of Ethics14.01
              
              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 Accountant16.01
              
              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 Issuer21.01
              
              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) Certifications31.01
              
              Certification
      of Principal Executive Officer  and Principal Financial Officer
      Pursuant to Rule 13a-14
              
              This
      filing.Item
      32.
              
              Section
      1350 Certifications32.01
              
              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 report to be signed on its
behalf by the undersigned, thereunto duly authorized.





TETRIDYN
      SOLUTIONS, INC.Date:  March
      30, 2010
            By:
            /s/David
      W. HempsteadDavid
      W. Hempstead, President








In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.





Dated:
March 30, 2010


/s/David
      W. HempsteadDavid
      W. Hempstead, DirectorPrincipal
      Executive OfficerPrincipal
      Financial and Accounting Officer/s/Antoinette
      R. KnappAntoinette
      R. Knapp, Director/s/
      Orville J. HendricksonOrville
      J. Hendrickson, Director/s/Larry
      J. YbarrondoLarry
      J. Ybarrondo, Director








SUPPLEMENTAL
INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT


TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED


SECURITIES
PURSUANT TO SECTION 12 OF THE ACT





We will
furnish to the Securities and Exchange Commission, at the same time that it is
sent to stockholders, any proxy or information statement that we send to our
stockholders in connection with our 2010 annual stockholders’
meeting.











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











PageReport
      of Independent Registered Public Accounting Firm
            F-1Consolidated
      Balance Sheets – December 31, 2009 and December 31, 2008
            F-2Consolidated
      Statements of Operations for the Years Ended December 31, 2009 and
      2008
            F-3Consolidated
      Statements of Stockholders’ Deficit for the Years Ended December 31, 2009
      and 2008
            F-4Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2009 and
      2008
            F-5Notes
      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 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 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.





/s/ Webb
& Company, P.A.


WEBB
& COMPANY, P.A.


Certified
Public Accountants


Boynton
Beach, Florida


March 22,
2010





F-1


TETRIDYN SOLUTIONS, INC. AND
      SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSDecember
      31,
            
            
            December
      31,2009
            
            
            2008ASSETSCurrent
      AssetsCash
            
            $       123,784
            
            
            $        77,914Accounts
      receivable, current portion
            
            132,706
            
            
            17,492Prepaid
      expenses and other current assets
            
            17,545
            
            
            12,445Current
      assets of discontinued operations
            
            -
            
            
            279,243Total
      Current Assets
            
            
            274,035
            
            
            387,094Property
      and Equipment, net
            
            43,005
            
            
            45,625Property
      and Equipment of Discontinued Operations, net
            
            -
            
            
            7,179Accounts
      receivable, net of current portion
            
            3,088
            
            
            6,604Total
      Assets
            
            
            $       320,128
            
            
            $       446,502LIABILITIESCurrent
      LiabilitiesAccounts
      payable
            
            
            $       217,135
            
            
            $          3,771Accrued
      liabilities
            
            
            64,970
            
            
            60,892Unearned
      revenue
            
            
            33,084
            
            
            62,885Notes
      payable, current portion
            
            113,181
            
            
            119,014Current
      liabilities of discontinued operations
            
            -
            
            
            622Total
      Current Liabilities
            
            
            428,370
            
            
            247,184Long-Term
      LiabilitiesNotes
      payable, net of current portion
            
            322,905
            
            
            216,909Total
      Long-Term Liabilities
            
            
            322,905
            
            
            216,909Total
      Liabilities
            
            
            751,275
            
            
            464,093NON-CONTROLLING
      INTEREST OFDISCONTINUED
      OPERATIONS
            
            -
            
            
            876,453COMMITMENTS
      AND CONTINGENCIES
            
            -
            
            
            -STOCKHOLDERS'
      DEFICITPreferred
      stock - $0.001 par valueAuthorized:
            5,000,000
      sharesIssued
      and outstanding:
            1,200,000
      shares andno
      shares, respectively
            
            1,200
            
            
            -Common
      stock - $0.001 par valueAuthorized:
            100,000,000
      sharesIssued
      and outstanding:
            21,881,863
      shares and21,381,863
      shares, respectively
            
            21,882
            
            
            21,382Additional
      paid-in capital
            
            
            2,810,330
            
            
            2,730,575Accumulated
      deficit
            
            
            (3,264,559)
            
            
            (3,646,001)Total
      Stockholders' Deficit
            
            
            (431,147)
            
            
            (894,044)Total
      Liabilities and Stockholders' Deficit
            
            $       320,128
            
            
            $       446,502See
      the accompanying notes to consolidated financial
    statements.





F-2





TETRIDYN SOLUTIONS, INC. AND
      SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONSFor
      the Years EndedDecember
      31,2009
            
            
            2008Revenue
            
            $     867,341
            
            
            $  1,310,584Cost
      of Revenue
            
            336,974
            
            
            466,117Gross
      Profit
            
            530,367
            
            
            844,467Operating
      ExpensesGeneral
      and administrative
            
            518,974
            
            
            483,959Professional
      fees
            
            53,793
            
            
            70,079Selling
      and marketing
            
            112,035
            
            
            157,483Research
      and development
            
            194,003
            
            
            111,435Total
      Operating Expenses
            
            878,805
            
            
            822,956Net
      Profit (Loss) from Operations
            
            (348,438)
            
            
            21,511Other
      Income (Expenses)Other
      Income (Expense)
            
            64
            
            
            278Interest
      Income
            
            1,200
            
            
            1,119Interest
      Expense
            
            (30,946)
            
            
            (30,861)Total
      Other Income (Expenses)
            
            (29,682)
            
            
            (29,464)Net
      Profit (Loss) from Continuing Operations beforeProvision
      for Income Taxes
            
            (378,120)
            
            
            (7,953)Provision
      for Income Taxes
            
            -
            
            
            -Net
      Loss from Continuing Operations
            
            $   (378,120)
            
            
            $       (7,953)Discontinued
      OperationsLoss
      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 ShareContinuing
      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-AverageCommon
      Shares Outstanding
            
            21,387,239
            
            
            21,267,780See
      the accompanying notes to consolidated financial
    statements.





F-3





TETRIDYN
      SOLUTIONS INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ DEFICITFor
      the Years Ended December 31, 2009 and December 31, 2008Additional
            Deferred
            
            TotalCommon
      Stock
            Preferred
      Stock
            Paid
      In
            Stock
            Accumulated
            Stockholders'Shares
            Amount
            Shares
            Amount
            Capital
            Compensation
            Deficit
            DeficitBalance,
      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
            -
            13,286Issuance
      for outside directorservices,
      $0.10 per share,April
      2008
            
            120,000
            120
            -
            -
            11,880
            -
            -
            12,000Issuance
      for consultant services,$0.10
      per share, April 2008
            250,000
            250
            -
            -
            24,750
            -
            -
            25,000Stock
      options
            
            -
            -
            -
            -
            117,235
            -
            -
            117,235Net
      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
            -
            -
            53,455Issuance
      for outside directorservices,
      $0.056 per share,December
      2009
            
            300,000
            300
            -
            -
            16,500
            -
            -
            16,800Issuance
      for employees' services,$0.056
      per share,December
      2009
            
            200,000
            200
            -
            -
            11,000
            -
            -
            11,200Net
      profit (loss)
            
            -
            -
            -
            -
            -
            -
            381,442
            381,442Balance,
      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.



















TETRIDYN SOLUTIONS, INC. AND
      SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSFor
      the Years EndedDecember
      31,2009
            
            2008Cash
      Flows from Operating ActivitiesNet
      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
            
            11,187Loss
      on disposal of asset
            109
            
            -Common
      stock issued for services
            28,000
            
            50,286Preferred
      stock issued for services
            53,455Granted
      stock options
            -
            
            117,235Changes
      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)
            
            5,082Net
      Cash Provided by (Used in) Operating Activities from Continuing
      Operations
            (248,544)
            
            84,691Net
      Cash Provided by (Used in) Operating Activities from Discontinued
      Operations
            (73,867)
            
            347,740Net
      Cash Provided by (Used in) Operating Activities
            (322,411)
            
            432,431Cash
      Flows from Investing ActivitiesPurchase
      of property and equipment
            (11,125)
            
            (11,548)Net
      Cash Used in Investing Activities from Continuing
    Operations
            (11,125)
            
            (11,548)Net
      Cash Used in Investing Activities from Discontinued
    Operations
            -
            
            (7,405)Net
      Cash Used in Investing Activities
            (11,125)
            
            (18,953)Cash
      Flows from Financing ActivitiesProceeds
      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 in Cash
            (233,373)
            
            208,223Cash
      at Beginning of Period
            357,157
            
            148,934Cash
      at End of Period
            $                          123,784
            
            $                             357,157Supplemental
      Disclosure of Cash Flow Information:Cash
      paid for income taxes
            $                                      -
            
            $                                         -Cash
      paid for interest expense and lines of credit
            $                            28,172
            
            $                               31,425See
      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
CodificationTMand the Hierarchy of
Generally Accepted Accounting Principles.”  The FASB Accounting
Standards CodificationTM
(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.





Note
2 – Property and Equipment





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





December
      31,
            2009
            2008Computer
      & office equipment
            $
      41,587
            $
      71,784Company
      vehicle
            33,981
            33,981Accumulated
      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-10





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
            
            2008Note
      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 ofcommon
      stock
            $         113,168
            
            $         128,460Note
      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
            
            41,385Note
      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 byshareholders'
      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%, originallydue
      April 2009 and extended during 2009 until April 2010,guaranteed
      by two shareholders, secured by theshareholders'
      personal property
            19,035
            
            87,729Line
      of credit agreements with a bank, interest at primeplus
      3%, unsecured
            49,634
            
            49,736Note
      payable to credit union, bearing interest at 6.29%, dueJanuary
      2013, guaranteed by two shareholders, securedby
      certain asset
            22,264
            
            28,613Total
      Notes Payable
            $         436,086
            
            $         335,923Less:
      Current Portion
            113,181
            
            119,014Long-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
            $113,1812011
            59,6092012
            62,7642013
            46,7632014
            136,514Thereafter
            17,255Total
            $436,086


F-11





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 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.





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, 2009Employees
            
            Executives
            
            DirectorsExpected
      term (in years)
            
            N/A
            
            N/A
            
            N/AExpected
      volatility
            
            N/A
            
            N/A
            
            N/AExpected
      dividend yield
            
            N/A
            
            N/A
            
            N/ARisk-free
      interest rate
            
            N/A
            
            N/A
            
            N/A





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


F-12





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
      PriceOutstanding
      at beginning of year
            
            
            3,520,500
            
            $
            0.10Expired
            
            
            (16,000)
            
            
            0.09Expired
            
            
            (7,500)
            
            
            0.10Outstanding
      at December 31, 2009
            
            
            3,497,000Exercisable
      at December 31, 2009
            
            
            3,497,000Weighted
      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
            
            
            0.113,497,000





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
      PriceOutstanding
      at beginning of year
            
            
            1,633,000
            
            $
            0.10Issued
            
            
            87,500
            
            
            0.10Issued
            
            
            1,800,000
            
            
            0.11Outstanding
      at December 31, 2008
            
            
            3,520,500Exercisable
      at December 31, 2008
            
            
            3,520,500Weighted
      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
            
            
            0.113,520,500


F-13





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-14





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.  Southfork had a negative net worth as of the date of
deconsolidation on September 30, 2009.  Southfork continued to have a
net loss in the fourth quarter of 2009; therefore, there were no additional
losses recorded under the equity method of accounting.





The
effect of the VIE’s consolidation on the Company’s consolidated balance sheet at
December 31, 2008, was an increase in the Company’s assets of $286,422 and
an increase in the Company’s liabilities of $622.  The Company also
recognized non-controlling net loss of $364,497 and $602,257 for the years ended
December 31, 2009 and December 31, 2008, respectively.





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





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


F-15





TETRIDYN
SOLUTIONS, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
31, 2009 AND 2008








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
            2008Benefit
      at statutory rate (34%)
            $
      129,690
            $(133,119)Non-deductible
      permanent differences
            (405,329)
            106,748Change
      in valuation allowance
            256,506
            46,240State
      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-16