U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549




FORM 10-K




ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year Ended December 31, 2010




Commission File Number: 000-30754




TILDEN ASSOCIATES, INC.


(Name of small business issuer in Its Charter)





DELAWARE
11-3343019(State or other jurisdiction
(I.R.S. Employer Identification Number)of incorporation or organization)





300 Hempstead Turnpike


West Hempstead, New York 11552


(address of principal executive offices) (Zip Code)




Registrant’s Telephone Number, including area code: (516) 746-7911




Securities registered pursuant to Section 12(b) of the Exchange Act: NONE




Securities registered pursuant to Section 12(g) of the Exchange Act:


Title of Each Class:


Common Stock (par value $.0005 per share)




Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


YES o NO x




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


YES o NO x




Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or Section 15(d) of the Exchange Act during the past 12 months (or for such shorter period that Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.


YES x NO o




Indicate by checkmark 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 during the preceding 12 months (or for shorter period that the issuer was required to submit and post such files).


YES o NO x




Indicate by checkmark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, 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-KSB or any amendment to this Form 10-KSB o




Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).


YES o NO x




State issuer’s revenues for its most recent fiscal year was $1,403,654




The aggregate market value of the Common Stock held by non-affiliates of the Registrant was approximately $285,000 based upon the $0.025 last bid price of these shares on the Pink Sheets on April 11, 2011.





As of April 11, 2011, there were 11,385,903 outstanding shares of Common Stock, $.0005 par value per share.









PART I




ITEM 1. DESCRIPTION OF BUSINESS




Tilden Associates, Inc. is a Corporation organized and existing under the laws of the State of Delaware and was incorporated on June 26, 1995. Tilden’s principal place of business is 300 Hempstead Turnpike (Suite 110), West Hempstead, New York 11552. We do not maintain any sales offices at places other than our principal place of business: however, we do retain the services of Market Developers who operate as Franchise Sales Brokers.




We sell Franchises to Franchisees for the operation of retail Automotive Centers known as “Tilden for Brakes Car Care Centers” (“Tilden Centers”).




The Tilden family has long been associated with the automotive repair industry. S.G. Tilden, Incorporated, was founded by the late Sydney G. Tilden in 1923. Prior to 1966 all Tilden brake shops were owned by S.G. Tilden, Incorporated and operated by company employees. In or about 1966, the company owned shops were sold to the then shop managers, who became Franchisees of S.G. Tilden, Incorporated. From 1976 to 1995, S.G. Tilden Management Corp. (“Tilden Management”) was empowered to Franchise the name “Tilden for Brakes Car Care Centers” ©, and the good will and operating expertise developed since 1923. Tilden Management offered franchises of Tilden for Brakes Car Care Centers ©from 1976 to 1995. In July of 1995, Tilden Associates, Inc. secured all of the franchise rights and related trademarks, copyrights, etc. from S.G. Tilden Management Inc. Tilden Associates, Inc. is currently the only entity empowered to Franchise the name “Tilden for Brakes Car Care Centers” ©.




In June of 1998, Tilden acquired 20 Franchised Automotive Service Outlets in Dade, Broward and Palm Beach Counties, Florida which were converted to Tilden Centers owned and operated by Franchisees. In December 1998, Tilden acquired 13 Franchised Automotive Service Outlets in the States of Georgia, Massachusetts, New Hampshire, Minnesota and Indiana which were converted to Tilden Centers, owned and operated by Franchisees.




In addition to the Company’s primary business, which is selling franchises and collecting royalties there from, the Company also has a wholly owned subsidiary, Tilden Equipment Corp., which sells shop equipment for auto repair shops. The Company typically attempts to sell equipment to franchisees that open new Tilden locations and accordingly, equipment sales often correlate to initial franchise sales. The Company has not engaged in the operation of a Company-owned store and has not been able to sell equipment since 2007. In prior periods, the Company occasionally operated Company owned locations, on a temporary basis, when it determined that such activity would enhance the potential re-sale value of its repossessed locations. The Company has been able to re-sell store locations which are either abandoned by an outgoing franchisee, or re-possessed by the Company, to new franchisees or other store operators.




In addition, the Company owns a number of realty corporations, which corporations are obligated on leases for one or more of the Company’s franchise locations.




The Franchise Offered




Tilden Centers are retail automobile service establishments devoted to the service and repair of the complete automobile. Tilden’s business is the franchising, design, development and management supervision of automobile and truck repair and service centers. The franchises to be offered include the right to operate an automobile and truck repair and service center under the name “Tilden for Brakes Car Care Centers” © and to receive instruction and advice from Tilden in the methods of operation the Tilden believes most likely to assure the Franchisee’s success. Neither the Tilden nor any of its Predecessors has offered Franchises for any other line of business.




Tilden, as a result of the expenditure of time, skill, effort and money, has developed a distinctive system for the establishment and operation of Tilden Centers (the “Tilden System”). The distinguishing characteristics of the Tilden System include, without limitation, site selection guidelines; Tilden Center construction and layout; equipment selection; purchasing and inventory control methods; accounting methods; merchandising, advertising, sales, and promotional techniques; product and service guarantees; personnel training; distinctive interior and exterior design, features and furnishings; and other features relating to the operation of Tilden Centers. Tilden Centers are identified by various trademarks, trade names, service marks, logos, emblems, and trade dress consisting of or containing the words “Tilden for Brakes Car Care Centers” ©, “Tilden” ©, and/or related words, letters, and symbols.




Tilden Centers are generally located in urban or heavily populated suburban areas. Tilden customers are primarily the owners of foreign and domestic automobiles, sports utility vehicles, light trucks, and vans.









The market for automotive services is well developed. Our Franchises compete with other businesses performing similar services, including franchised mufflers and brake shops, automobile service departments of national and regional department stores, service stations, motor vehicle dealerships, and other automotive repair centers. Automotive services are sold at a price predetermined by the Franchisee to its customer; we do not establish prices at which you must offer your goods or services.




The Business




There is an extensive and growing market for the automobile and truck service and repair business. The automotive service industry is expected to gross more than one hundred sixty billion dollars in sales this year for many reasons. There is a continuing need for quality automotive service regardless of the state of the economy.




When the economy is strong, more vehicles are bought and sold. Additional vehicles on the road mean more repair business for the automotive service industry. On the other hand, when the economy is weak, motorists keep their vehicles longer and older vehicles must be serviced regularly. Brakes, along with other important systems, are generally replaced three or more times during the lifetime of these vehicles. Very often, the repeat business generated by loyal customers can span a period of many years.




With over two hundred million cars on the road, the automotive aftermarket-service industry is a multi-billion dollar business. The demand for professional, quality car service of replacement brakes, exhaust systems, shocks, suspension, oil change and other related services is at an all-time high, and specialty shops such as Tilden for Brakes Car Care Centers© are getting an increased share of the business.




The average American household owns two or more vehicles at a given time. These cars generally undergo brake repair and replacement at least three times during the life span of each car. In fact, it is the most frequent auto repair needed by the Consumer. Most drivers agree that safe and reliable brakes are the most critical operating feature on a vehicle and do not procrastinate. Typically, brake service on a vehicle requires only one to one and one-quarter (1 - 1 1/4) hours of labor, enabling each store to service a significant number of vehicles on a daily basis.




Competition generally comes from new car dealers and specialty service centers. New car dealers will provide competition for Tilden for Brakes Car Care Centers© because they are the only places left to get general service and computer diagnostics done. However, many new car dealers charge premium rates for their automotive services and consumers often favor privately owned automotive centers where they can have a personal relationship with an operator, pay competitive prices, and receive quality service. Tilden for Brakes Car Care Centers© present an image and reputation which, when coupled with a competent operator, can achieve that competitive edge. The competition also comes from the specialty service centers such as quick-lubes, quick tune-up shops, transmission operations, muffler shops and similar type operations. While their market share is growing now and continues to do so, the Tilden for Brakes Car Care Centers© will go head to head with them, offering competitive prices, the credibility and long time reputation for honesty associated with the Tilden name and, and most importantly, additional services. A quick-lube center that finds a bad fan belt in the course of an oil change can not do anything aboutit, whereas Tilden’s well trained personnel can.




EMPLOYEES




We currently have 4 full time employees in the corporate office.




REGULATORY REQUIREMENTS FOR FRANCHISING




Franchising is both regulated by the Federal Trade Commission and many of the states. The Company believes it is in compliance with all the rules of the Federal Trade Commission and is registered in the following states to sell franchises: California, Florida, Indiana, Minnesota, New York, Rhode Island, and Virginia. There are approximately Thirty-five (35) States, which have no registration requirements.




The Company generally competes in the sale of franchises with other companies of similar size and similar resources. The larger automotive franchises typically already exist in the areas where the Company seeks to sell its franchises and are therefore not competing for franchise location sales in these areas.









The Company’s individual franchisees compete with other franchise operators, large company run stores and individual operators, both brake specialists and parties performing general automotive repairs. The Company believes that its franchise operators are able to compete, both financially and in providing service, with its competitors.




ITEM 2. DESCRIPTION OF PROPERTY




The Company’s offices are located at 300 Hempstead Turnpike, West Hempstead, New York 11552. The Company has a 60-month lease, which commenced on October 1, 2009. The space is approximately 1,600 square feet. The space is sufficient for the Company’s needs for the foreseeable future




In addition, the Company leases real estate in the Continental United States and sub leases these locations to its franchises. As of December 31, 2010, the Company owned and leased to its franchises a total of eight (8) sites.




ITEM 3. LEGAL PROCEEDINGS




In July 2006, the Company and its directors were named as defendants in a lawsuit instituted in the Chancery Court of the State of Delaware in and for New Castle County. The action alleges that the exercise price of stock options were in violation of the Company’s stock option plan for the years 2001 through 2005, in that the options exercise price on the date of the grant were below the requirements of the plans. The lawsuit was settled during the third quarter 2006 for $20,000. As part of the settlement without conceding the accuracy or correctness of the plaintiffs’ allegations, the Company rescinded the stock options issued for the years 2001 through 2005 without prejudice to its right to issue stock options in the future.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS




The Company’s shareholders voted on two matters during 2010: (1) The shareholders voted on and approved the modification and extension of the President’s employment contract. The contract was due to expire in 2010 and was extended through 2015. (2) The shareholders voted on and approved the granting of options to purchase 1,150,000 shares of common stock at $0.02 per share. The options were issued to the three members of the board of directors and to a consultant to the Company for 2010 services to be performed.




PART II




ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS




The Company’s common stock is traded on the Pink Sheets under the symbol “TLDN”. The following constitutes the high and low sales prices for the common stock as reported by NASDAQ for each of the quarters of 2010 and 2009. The quotations shown below reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.





2010

HIGH


LOWFIRST QUARTER

Common Stock

$
.04


$
.02SECOND QUARTER

Common Stock

$
.04


$
.03THIRD QUARTER

Common Stock

$
.05


$
.03FOURTH QUARTER

Common Stock

$
.05


$
.02
  2009

HIGH


LOWFIRST QUARTER

Common Stock

$
.02


$
.01SECOND QUARTER

Common Stock

$
.05


$
.02THIRD QUARTER

Common Stock

$
.05


$
.02FOURTH QUARTER

Common Stock

$
.05


$
.03









The Company has not declared cash dividends on its Common Stock and does not intend to do so in the foreseeable future. If the Company generates earnings, management’s policy is to retain such earnings for further business development. It plans to maintain this policy as long as necessary to provide funds for the Company’s operations. Any future dividend payments will depend upon the Company’s earnings, financial requirements and other relevant factors, including approval of such dividends by the Board of Directors.




As of April 15, 2011, there were approximately 70 shareholders of record of the Company’s common stock, excluding shares held in street name.




ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS




The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Company’s consolidated financial statements and notes thereto included elsewhere herein. The statements disclosed herein include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of certain risks and uncertainties, including, but not limited to, the Company’s need for additional financing, competition in the franchise industry for retail automobile and truck repair service, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.





RESULTS OF OPERATIONS





Fiscal 2010 Compared to Fiscal 2009




Revenue increased to approximately $1,404,000 in the year 2010 from approximately $1,340,000 in the year 2009, representing a 5% increase. The increase in overall revenue recorded during the year as compared to the prior year was attributed to increases in 1) the gain on sale of real estate purchased for re-sale of approximately $284,000 in 2010 and 2) royalty fees of approximately $22,000. These increases were offset by decreases in the recognition of rental income, initial franchise acquisition fees, market area sales and company owned locations and of approximately $105,000, $55,000, $50,000 and $38,000, respectively. The gain on sale of real estate purchased for re-sale in 2010 was a result of the Company’s purchase and simultaneous sale of a location on which it was and continues to lease a franchise location. The Company has been able to identify opportunities to profit on realty purchases and sales however its ability to execute similar transactions in the future will be contingent on the capital sufficiency and credit available to the Company. The increase in royalties is attributed to the Company’s ability to provide better operations support which the Company believes has resulted in increased sales at its franchised locations. The decrease in rental income during the year ended 2010 as compared to the year ended 2009 is attributable to the decrease in performing subleases due primarily to the abandonment of two locations by the Company, to franchisees. The decrease in initial franchise acquisition fees is attributable to the Company’s inability to sell initial franchise rights in 2010 as compared with sales of two new franchises in 2009. The Company did reflect initial franchise fee income of $5,000 during 2010 on the transfer of franchise rights from an outgoing franchisee to a new franchisee on an existing location. The decrease in market area sales was attributable to a sale of rights to develop one market area during the year ended 2009 compared to no rights sold during the year ended 2010. During 2010, the Company has been unable to sell a new franchise or market area which it attributes primarily to the continued difficulty for small businesses to obtain credit. Although the Company believes that the auto repair business continues to present opportunities for new locations, it cannot accurately forecast when it will see an increase in sales of new franchises and market. . The decrease in sales of Company locations is attributable to the Company’s sale of two locations through during the year ended 2009 as compared with one sale of Company locations during the year ended 2010. The Company has not engaged in the operation of a company-owned store and has not been able to sell equipment since 2007. In prior periods the Company occasionally operated company owned locations, on a temporary basis, when it determined that such activity would enhance the potential re-sale value of its repossessed locations. The Company typically attempts to sell equipment to franchisees that open new Tilden locations and accordingly, equipment sales often correlate to initial franchise sales.Miscellaneous income is primarily made up of bad debt recoveries received in collection proceedings and commissions and rebates earned from vendors. Interest income, which was included under, other income (expenses) on the statement of operations, decreased to approximately $7,000 from $8,000 representing a 14% decrease. The decrease was attributable to a decrease in the prevailing interest rate in that the Company was able to earn on its cash balances in 2010.









Costs of revenues decreased to approximately $584,000 in 2010 from approximately $617,000 in 2009, a 5% decrease. As a percentage of revenues, cost of revenues were 42% and 46%, respectively for the years reported. The overall decrease was primarily attributable to decreases in the cost of Company owned locations sold and rent paid for real estate sublet, of approximately $25,000 and $65,000, respectively. The decrease in cost of Company owned locations sold was a result of the increased cost incurred in the sales of two Company owned locations during the year ended 2009 as compared to the costs incurred in the sale of one location during the year ended 2010. The decrease in rent paid for real estate sublease was a result of a decrease in the number of locations on which the Company is obligated for rent.




Selling, general and administrative expenses decreased to approximately $802,000 in the year 2010 from approximately $835,000 in the year 2009, representing a 4% decrease. The decrease in selling, general and administrative expenses was primarily attributable to decreases in bad debt expense, professional fees, and consulting costs of approximately $146,000, $8,000 and $8,000, respectively. The decrease in bad debt was attributable to a decrease in the number of franchisees requiring reserve and write-off during 2010. The Company believes that its greater efforts in providing operations support to franchisees, has resulted in better results in collections of royalties during 2010. Decreases in professional fees and consulting costs during 2010 are reflective of the Company’s efforts to reduce overhead costs. The decreases were partially offset by increases in compensation costs and settlement expense of approximately $99,000 and $17,000, respectively. The increase in compensation costs was primarily the result of 1) the hiring of an additional employee to work on franchise operations and sales during the interim of 2010 and 2) the Company’s change in the service period covered by stock options granted to employees. The increase in settlement expense in 2010 was primarily attributable to charges incurred in the release of obligation under a lease of a location abandoned by a franchisee.





LIQUIDITY AND CAPITAL RESOURCES





Working capital at December 31, 2010 was approximately $483,000, compared to working capital of approximately $371,000 at December 31, 2009. The ratio of current assets to current liabilities was 2.11:1 at December 31, 2010 and 1.78:1 at December 31, 2009. Cash flows provided by operations for the year 2010 was approximately $77,000, compared to cash flows used by operations for the year 2009 of approximately $15,000.




Cash and accounts and notes receivable increased to approximately $887,000 at December 31, 2010 from approximately $863,000 at December 31, 2009, while accounts payable and accrued expenses decreased to approximately $232,000 at December 31, 2010 from approximately $239,000 at December 31, 2009.




Although the Company plans to continue to expand to the extent that resources are available, the Company has no firm commitments for capital expenditures in other areas of its business. The Company’s current business plan and objective is to continue expanding the number of franchises in its system through sales of new franchises, as well as through acquisitions of other franchises similar to the acquisitions they have done in the past.




The Company has not paid any dividends in the past and does not contemplate paying any in the foreseeable future.




Some of the Company’s subsidiaries lease properties on which franchisees are located. The franchisees typically pay rent to these subsidiaries and, in some cases, may pay rent directly to the lessor.




The Company has approximately $483,000 in working capital. The Company believes that its working capital and cash generated by operations will be sufficient to meet our anticipated ongoing needs for the next twelve months. The Company will need to generate increased franchise and market area sales in order to maintain adequate liquidity on a long-term basis.




The Company has lost its line of credit during the year ended December 31, 2010.




In addition, several franchisees are significantly in arrears in the payment of royalties. Management, however, has addressed these arrearages and resolutions are negotiated with the franchisees on an individual-by-individual basis.









ITEM 8. FINANCIAL STATEMENTS




The response to this item follows Item 13, and is hereby incorporated herein.




ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE




None




ITEM 9a. CONTROLS AND PROCEDURES.




Evaluation of Disclosure Controls and Procedures




An evaluation was conducted under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”), its principal executive officer, and Chief Financial Officer (“CFO”), its principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of December 31, 2010. Based on that evaluation, the CEO and the CFO concluded that the disclosure controls and procedures are effective in reaching a reasonable level of assurance that management is timely alerted to material information relating to the Company during the period when its periodic reports are being prepared. In addition, the CEO and CFO concluded that the disclosure controls and procedures are also effective to ensure that information required is recorded, processed and summarized within the time periods specified in the Commission’s rules and forms. These same officers concluded that controls and procedures were effective in ensuring that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to its management, including its CEO and CFO as appropriate to allow timely decisions regarding required disclosure.




Management’s Report on Internal Control over Financial Reporting




Section 404 of the Sarbanes-Oxley Act of 2002 requires that management document and test the Company’s internal control over financial reporting and include in this Annual Report on Form 10-K a report on management’s assessment of the effectiveness of our internal control over financial reporting.





Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting refers to the process designed by, or under the supervision of the CEO, CFO and effected by the Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and preparation of financial statements for external purposes in accordance wit U.S. GAAP, and includes those policies and procedures that:





(1)
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;(2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and(3)
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.





Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding the internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Security Exchange Commission that permit the Company to provide only management’s report in this annual report.




In accordance with the U.S. Securities and Exchange Commission’s requirements, the CEO and CFO conducted an evaluation of the Company’s internal control over financial reporting (the “Internal Controls”) at December 31, 2010 to determine whether there have been any changes in Internal Controls that occurred during the fiscal year which have materially affected or which are reasonable likely to materially affect Internal Controls. Based on this evaluation, there have been no such changes in Internal Controls during the period covered by this report.









PART III




ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.




The Company’s Certificate of Incorporation provides for no less than three (3) Directors. Each Director shall hold office until the next annual meeting of shareholders and until his successor has been elected and qualified. At the present time there are a total of three (3) Directors. The Board of Directors is empowered to fill vacancies on the Board. The Company’s Directors and Executive Officers are listed below:





NAME
AGE
POSITIONS

W/ COMPANY
DIRECTOR SINCERobert Baskind
69
Chairman of the Board, Chief Executive Officer, Chief Financial Officer
1996Arthur Singer
43
Director
1996Jason Baskind
39
Director of Franchise Development
2003





DIRECTORS




Robert Baskind is a founding stockholder and was employed as a registered representative by On-Site Trading, Inc., a registered Broker Dealer and a member of the National Association of Security Dealers, Inc. Prior thereto and since 1992, Mr. Baskind was employed with Trading Places, Inc., a franchise sales organization and business broker. Mr. Baskind has many years of experience as a franchiser and business Broker specializing in business automotive services and was entrepreneurially involved in many of these entities.




Arthur Singer is a graduate of the State University at Albany. He has devoted his entire career to Sales and Marketing. From 1990, Mr. Singer has worked for Carrington Laboratories, Inc. He has a documented track record of success in field sales and sales management. As Regional Sales Manager of this publicly held bio-pharmaceutical company, his duties included training and development of new sales representatives for the launching of new products, in the development of educational programs and in the development of goals, strategies and budgets for that company’s sales force. Mr. Singer’s experience included working on the distribution of products and working with buying groups. During his employment with Carrington, Mr. Singer had, on more than one occasion, been selected “Sales Person of the Year”, and on one occasion was selected as “Regional Manager of the Year” for the entire United States.




Jason Baskind joined the Company as Director of Franchise Development. Prior to joining the Company, he was working as an equities trader at On-Site Trading, Inc. He graduated from the University of Miami with a B.A. in Management. His previous experience includes working for Breslin Realty, which is a large real estate developer on Long Island in New York, as a site selector.




Our board of directors acts as our audit committee. No member of our board of directors is an “audit committee financial expert” as that term is defined in Item 401(e) of Regulation S-B promogulated under the Securities Act. Our management and our board of directors determined that our internal controls are adequate to insure that financial information is recorded, processed, summarized, and reported in a timely and accurate manner in accordance with applicable rules andregulations of the Securities and Exchange Commission. Accordingly, our board of directors concluded that the benefits of retaining an individual who qualifies as an “audit committee financial expert” would be outweighed by the costs of retaining such a person.





Section 16(a) Beneficial Ownership Reporting Compliance




Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by regulation to furnish the Company with copies of all Section 16(a) forms they file.









Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons that Form 5’s were required and filed for those persons, the Company believes that, during the period from January 1, 2010 through December 31, 2010, all filing requirements applicable to its officers, directors, and greater than ten percent beneficial owners were complied with.




ITEM 11. EXECUTIVE COMPENSATION




The following table sets forth information with respect to the compensation of executive officers of the Company for services provided to the Company and its subsidiaries in 2010, 2009, 2008 and 2007. No other executive officers received salary in excess of $100,000 in any such year.




Summary Compensation Table





YEAR

COMPENSATION

OPTIONS GRANTEDRobert Baskind
2010

$
181,000


600,0002009

$
171,000


600,0002008

$
150,000


600,0002007

$
144,000


—





Employment Agreements:




An employment agreement for the year 2010 existed for the following officer and key employee:




Robert Baskind: He is entitled to five percent increases on a yearly basis. The agreement, which employs Mr. Baskind as the president of the Company, expires in 2015.




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




PRINCIPAL STOCKHOLDERS




The following table sets forth, as of December 31, 2010: (i) the name and address of each person who owns of record or who is known by the Board of Directors to be beneficial owner of more than five percent (5%) of the Company’s outstanding common stock, (ii) each of the Company’s Directors, and (iii) all of the Company’s Executive Officers and Directors as a group.





NAME ANDADDRESS

BENEFICIAL

OWNERSHIP

PERCENT OF COMMON

STOCK OUTSTANDINGRobert Baskind

300 Hempstead Turnpike

West Hempstead, NY 11552

2,707,000
(1)

23.8
%Arthur Singer

300 Hempstead Turnpike

West Hempstead, NY 11552

451,100
(2)

4.0
%Jason Baskind

300 Hempstead Turnpike

West Hempstead, NY 11552

2,707,000
(3)

23.8
%Officers and Directors as a

group (3 Persons)

3,158,100


27.7
%





(1) Ownership includes 2,331,500 shares of the Company’s common stock and 375,000 shares of the Company’s common stock imputed to him from his son Jason Baskind.




(2) Ownership includes 451,100 shares of the Company’s common stock.




(3) Ownership includes 375,000 shares of the Company’s common stock and 2,331,500 shares of the Company’s common stock imputed to him from his father Robert Baskind.










ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS




None




PART IV




ITEM 15. EXHIBITS, LIST AND REPORTS ON FORM 8-K




(a)
Exhibits




3.1
Certificate of Incorporation of the Registrant (1)3.2
By-laws of the Registrant (1)4.1
Tilden Associates, Inc. incentive plan (1)4.2
Tilden Associates, Inc. 1998 stock option plan (1)4.3
Tilden Associates, Inc. 2001 stock option plan10.1
Consulting agreement with Tilden Huntington, Inc. (1)10.2
Employment agreement with the President Robert Baskind. (1)10.3
Deferred compensation letter for president Robert Baskind (1)10.4
Waiver of deferred compensation by president Robert Baskind (2)21.1
Subsidiaries (2)23.1
Consent of independent accountants99.1
Certifications





(1) Incorporated by reference to the Company’s annual report on Form 10KSB for the fiscal year ended December 31, 2000.




(2) Incorporated by reference to the Company’s annual report on Form 10KSB for the fiscal year ended December 31, 2001.










TILDEN ASSOCIATES, INC. AND SUBSIDIARIES




FINANCIAL STATEMENTS


AND SUPPLEMENTAL INFORMATION




DECEMBER 31, 2010 AND 2009




Table of Contents




PageReport of Independent Registered Public Accounting Firm

F-2Consolidated Balance Sheets

F-3Consolidated Statements of Operations

F-4Consolidated Statements of Cash Flows

F-5Consolidated Statements of Stockholders’ Equity

F-6Notes to Consolidated Financial Statements

F-7 – F-14SUPPLEMENTAL INFORMATION:Report of Independent Registered Public Accounting Firm on Supplemental Financial Information

F-15Consolidated Statements of Selling, General and Administrative Expenses

F-16











MICHAEL T. STUDER CPA P.C.


18 East Sunrise Highway, Suite 311


Freeport, N.Y. 11520


Phone: (516) 378-1000


Fax: (516) 546-6220




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and Stockholders of


Tilden Associates, Inc.




I have audited the accompanying consolidated balance sheets of Tilden Associates, Inc. and subsidiaries (the Company) as of December 31, 2010 and 2009 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.




I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I 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. I believe that my audits provide a reasonable basis for my opinion.




In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tilden Associates, Inc. and subsidiaries as of December 31, 2010 and 2009 and the results of their operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.




/s/ Michael T. Studer CPA P.C.Freeport, New YorkApril 15, 2011




F-2





TILDEN ASSOCIATES, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS











December 31,2010


2009ASSETSCash and cash equivalents

$
565,620


$
488,909Accounts and notes receivable - net of allowance for doubtful accounts of $349,951 and $290,066 at December 31, 2010 and 2009, respectively


321,331



349,916Inventory


4,300



4,300Prepaid expenses and other current assets


25,856



4,164Total current assets


917,107



847,289Property and equipment, net of accumulated depreciation of $23,020 and $23,020, respectively


—



—Intangible assets, net of accumulated amortization of $124,798 and $122,758, respectively


232,888



281,038Security deposits


73,985



72,484Accounts and notes receivable, net of current portion


—



25,000Total other assets


306,873



378,522Total assets

$
1,223,980


$
1,225,811LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIESAccounts payable and accrued expenses

$
231,773


$
238,577Deposits on franchises


183,000



198,000Income taxes payable


19,770



39,271Total current liabilities


434,543



475,848Security deposits


128,962



126,799Total liabilities


563,505



602,647STOCKHOLDERS’ EQUITYCommon stock, $.0005 par value; 30,000,000 shares authorized; 11,425,903 shares issued and outstanding at December 31, 2010 and 2009, respectively


5,713



5,713Additional paid-in capital


1,702,526



1,641,088Retained earnings (accumulated deficit)


(1,027,764
)


(1,003,637
)680,475



643,164Less: treasury stock - 40,000 shares, stated at cost


(20,000
)


(20,000
)Total stockholders’ equity


660,475



623,164Total liabilities and stockholders’ equity

$
1,223,980


$
1,225,811





See notes to consolidated financial statements.




F-3





TILDEN ASSOCIATES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS





Year Ended December 31,2010


2009REVENUESInitial franchise acquisition fees

$
5,000


$
60,000Royalty fees


543,941



521,873Gain on sale of real-estate purchased for re-sale


283,755



—Market area sales


—



50,000Sales of Company owned locations


98,000



130,645Rental income


472,958



577,821Total revenues


1,403,654



1,340,339COST OF REVENUESBrokers Fees


56,288



14,250Costs of Company owned locations sold


26,224



45,301Franchise development fees


43,382



34,546Rent paid for real estate sublet


458,477



522,652Total cost of revenues


584,371



616,749Gross profit


819,283



723,590Selling, general and administrative expenses


802,200



835,778Income (loss) from operations before other income and expenses and provision for income taxes


17,083



(112,188
)OTHER INCOME (EXPENSES)Interest income


6,687



7,760Miscellaneous income


613



33,579Loss on impairment of franchise and market area rights


(46,688
)


(40,276
)Total other income (expenses)


(39,388
)


1,063Income (loss) before provision for income taxes


(22,305
)


(111,125
)Provision for income taxes


1,822



4,480Net income (loss)

$
(24,127
)

$
(115,605
)Per Share DataBasic earnings per share

$
(0.00
)

$
(0.01
)Diluted earnings per share

$
(0.00
)

$
(0.01
)Weighted average shares outstanding


11,385,903



11,385,903





See notes to consolidated financial statements.




F-4




TILDEN ASSOCIATES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS





Year Ended December 31,2010


2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(24,127
)

$
(115,605
)Adjustments to reconcile net (loss) to net cash provided by (used for) operating activities:Loss on impairment of franchise and market area rights


46,688



40,276Depreciation and amortization


1,462



3,261Provision for doubtful accounts


122,909



269,345Sale of equipment financed by note receivable


—



27,822Stock option expense


61,438



1,122Changes in operating assets and liabilities:Accounts and notes receivable


(69,324
)


(278,425
)Prepaid expenses and other current assets


(21,692
)


—Security deposit receivable


(1,501
)


8,054Accounts payable and accrued expenses


(6,804
)


(11,127
)Deposits on franchises


(15,000
)


50,000Income taxes payable


(19,501
)


3,339Security deposits payable


2,163



(13,412
)Net cash provided by (used for) operating activities


76,711



(15,350
)CASH FLOWS FROM INVESTING ACTIVITIES


—



—CASH FLOWS FROM FINANCING ACTIVITIES


—



—Net increase (decrease) in cash and cash equivalents


76,711



(15,350
)Cash and cash equivalents at beginning of period


488,909



504,259Cash and cash equivalents at end of period

$
565,620


$
488,909Supplemental Cash Flow Information:Interest paid

$
—


$
—Income taxes paid

$
18,364


$
1,141




See notes to consolidated financial statements.




F-5





TILDEN ASSOCIATES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009





AdditionalCommon stock


Paid In


Accumulated


Treasury stock


Stockholders’Shares


Amount


Capital


Deficit


Shares


Amount


EquityBalance, December 31, 2008


11,425,903


$
5,713


$
1,639,966


$
(888,032
)


(40,000
)

$
(20,000
)

$
737,647Stock option expense


—



—



1,122



—



—



—



1,122Net loss for the year ended Decemeber 31, 2009


—



—



—



(115,605
)


—



—



(115,605
)Balance, December 31, 2009


11,425,903



5,713



1,641,088



(1,003,637
)


(40,000
)


(20,000
)


623,164Stock option expense


—



—



61,438



—



—



—



61,438Net loss for the year ended Decemeber 31, 2010


—



—



—



(24,127
)


—



—



(24,127
)Balance, December 31, 2010


11,425,903


$
5,713


$
1,702,526


$
(1,027,764
)


(40,000
)

$
(20,000
)

$
660,475




See notes to consolidated financial statements.




F-6




TILDEN ASSOCIATES, INC and SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 1 - Summary of Significant Accounting Policies




Business Activity




The Company was incorporated in the state of Delaware in June 1995 and is in the business of selling automotive franchises and administering and supporting full service automotive repair centers under the name “TILDEN FOR BRAKES CAR CARE CENTERS”. The majority of franchises are currently located in New York, Florida and Colorado with twelve states being represented and expansion plans for several additional states.




Principles ofConsolidation




The consolidated financial statements include all wholly owned subsidiaries. All inter-company profits and transactions have been eliminated in consolidation.




Use of Estimates




The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from the estimates.




Revenue Recognition




The Company recognizes revenue in several ways: Initial fees from sale of franchises, market area sales to market developer partners, royalties (as a percentage of gross revenues) from franchisees, transfer fees upon assignment of franchise rights, equipment sales, rental of premises to franchisees and the re-sale of Company owned automotive repair centers which are abandoned or re-possessed and developed for potential sale to franchisees. The Company has also recognized revenue by identifying, purchasing and re-selling commercial real estate typically connected with locations which it leases to automotive operators.




Franchise fee revenue for initial franchise fees and from market area sales to market developer partners is recognized upon the execution of a franchise agreement and when all material services or conditions relating to the sale have been successfully completed by the Company. Initial franchise fees are priced at $25,000 for a new location and market area rights are priced at $50,000 for the right to develop up to ten locations in a specified market area. Market developer partners receive a percentage of royalty fees for development and management of their market and are responsible for substantially all training and other services required in opening new franchises in their regions. The cost of a new franchise was increased from $25,000 to $29,900 effective in 2011. Royalty fees are recognized weekly as a percentage of franchisee sales typically specified at six percent under the Company’s standard franchise agreement.




Cash and Cash Equivalents




Cash and cash equivalents include cash in banks and short-term investments with original maturities of less than three months.




Advertising Costs




The Company’s franchise agreement requires that franchisees remit advertising fees to a cooperative advertising fund managed by the Company. Corporate advertising is expensed as incurred.




Income Taxes




The Company provides for income taxes under the provisions of Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”). SFAS No. 109 requires that an asset and liability based approach be used in accounting for income taxes.




Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of the temporary differences of revenue and expense items for financial statement and income tax purposes. Valuation allowances are provided against assets, which are not likely to be realized.




F-7





Leases




Leases that transfer substantially all of the risks and benefits of ownership are treated as capital leases. Capital leases are included in property and equipment and are depreciated over their estimated useful lives using the straight-line method.




Carrying Values of Long-Lived Assets




The Company evaluates the carrying values of its long-lived assets to be held and used in the business by reviewing undiscounted cash flows by operating unit. Such evaluations are performed whenever events and circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the projected undiscounted cash flows over the remaining lives of the related assets does not exceed the carrying values of the assets, the carrying values are adjusted for the differences between the fair values and the carrying values.




Intangible Assets




Intangible assets are stated at cost less accumulated amortization. Intangible assets with an indefinite useful economic life, such as franchise and market area rights, were amortized through 2001 on a straight-line basis using an estimated economic life of 40 years. Effective January 1, 2002, in accordance with SFAS No. 142, the Company ceased amortizing intangible assets with an indefinite useful economic life. Other intangible assets are amortized over their expected period of benefit on a straight-line basis.




Presently, the Company owns the trademarks “Tilden forBrakes Car Care Centers”, “Brakeworld”, The Brake Shop” and “American Brake Service”.




Goodwill




Goodwill represents the amount paid in consideration for an acquisition in excess of the net tangible assets acquired. Goodwill is tested for impairment annually or under certain circumstances, and written off when determined to be impaired. In accordance with SFAS No. 142, the Company did not amortize goodwill for new acquisitions made after June 30, 2001. For acquisitions prior to that date, the Company continued to amortize goodwill through the end of 2001. The Company conducts tests for impairment and goodwill that is determined to have become impaired is written off.




Accounts and Notes Receivable




Accounts and notes receivable are primarily recorded for royalty income, rental income, and franchise and market area sales. In instances where the Company provides financing to franchisees and provides payment arrangements which allow for payments to be received over a period greater than one year, non-current receivables are recorded at the present value of estimated future cash flows.




In most instances, financing of franchisees is secured by notes receivable and collateralized by shop equipment and franchise rights (see Note 2).




Property and Equipment




Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line method over the estimated useful lives of the assets, generally 39 years for buildings and building improvements, and 3 to 7 years for furniture and equipment. When property is sold or retired, the cost and accumulated depreciation are eliminated from the accounts and gains or losses are recorded in the statement of operations. Expenditures for repairs and maintenance are expensed as incurred.




Stock-based Compensation




Effective January 1, 2006, the Company adopted SFAS No. 123(R) for stock-based compensation. SFAS No. 123(R) requires that the fair value of equity instruments (such as stock options) exchanged for services be recognized as an expense in the financial statements as the related services are performed. Prior to 2006, the Company followed APB Opinion No. 25 in accounting for stock-based compensation. APB Opinion No. 25 only required the recognition of compensation costs for stock options when the market price of the Company’s common stock at the date of grant exceeded the exercise price of the option.




F-8




Earnings Per Share




Earnings per share (“EPS”) has been calculated in accordance with SFAS No. 128, which requires the presentation of both basic net income per share and net income per common share assuming dilution. Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the year. Diluted earnings per share reflects the potential dilution that could occur upon the exercise of common stock options resulting in the issuance of common stock to stockholders who would then share in the earnings of the Company. SFAS No. 128 precludes the inclusion of any potential common shares in the computation of any diluted per-share amounts when such inclusion is antidilutive.




Reclassifications




Certain amounts in the 2009 financial statements were reclassified to conform to the 2010 presentation.




Business Segment Information




The Company operates in a single business segment: selling automotive franchises and administering and supporting full service automotive repair centers primarily under the name “TILDEN FOR BRAKES CAR CARE CENTERS”, principally through franchised and company-operated shops located in North America. Sales to any single customer were less than five percent of total revenues in each of the periods presented.




New accounting pronouncements




Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.




NOTE 2 - Accounts and Notes Receivable




Accounts and notes receivable consisted of the following:





December 31, 2010


December 31, 2009Trade receivables from franchisees

$
578,916


$
639,982Installment loans due from January 1, 2011 with an interest rate of 6%


92,366



25,000671,282



664,982Less allowance for doubtful accounts


(349,951
)


(290,066
)321,331



374,916Less current portion


(321,331
)


(349,916
)Non-current accounts and notes receivable

$
—


$
25,000





NOTE 3 – Property and Equipment





Property and equipment consisted of the following:





December 31, 2010


December 31, 2009Machinery and shop equipment

$
5,704


$
5,704Signage


5,623



5,623Furniture


11,693



11,69323,020



23,020Less accumulated depreciation


(23,020
)


(23,020
)Property and equipment, netof accumulated depreciation

$
—


$
—





Depreciation expense for the years ended December 31, 2010 and 2009 was $0 and $1,799, respectively.




F-9




NOTE 4 - Intangible Assets




Intangible assets consisted of the following:





December 31, 2010


December 31, 2009Trademarks (subject to amortization)

$
45,196


$
45,196Franchise and market area rights(not subject to amortization)


311,912



358,600357,108



403,796Less accumulated amortization


(124,220
)


(122,758
)Intangible assets, netof accumulated amortization

$
232,888


$
281,038





The Company incurred trademark costs of $0 and $1,097 in 2010 and 2009, respectively. For the years ended December 31, 2010 and December 31, 2009, the Company reflected losses on the impairment of franchise rights in the amounts of $46,688 and $40,276, respectively. The Company tests the carrying value of franchise and market area rights on a franchise-by-franchise basis and identifies individual franchise rights requiring write-down. Of the intangible assets listed above, only trademarks have been amortized for the years ended December 31, 2010 and December 31, 2009. The amortization expense was $1,462 and $1,462, respectively.




NOTE 5 – Credit Line




In August 2006, the Company secured a $250,000 revolving line of credit with a stated rate of interest of prime plus one percentage point. The line was secured by the assets of the Company. As of December 31, 2010, the Company has lost the credit line as a result of not utilizing the available line of credit for several years. The Company is in the process of applying to re-establish a line of credit.




NOTE 6 – Deposits on Franchises





The Company, under the terms of its standard franchise agreement, typically receives a $15,000 deposit upon the signing of a franchise agreement and the balance of the franchise fee upon the franchisee’s acceptance of a Tilden approved franchise location. These deposits are generally non-refundable after 180 days but the Company has allowed prospective franchisees to apply non-refundable deposits to a different location identified in the future. Total deposits on franchises amounted to $183,000 and $198,000 in 2010 and 2009, respectively.




NOTE 7 – Income Taxes




Tilden Associates Inc. and subsidiaries have elected to fileconsolidated income tax returns for Federal and New York State taxes. Tax expense is allocated to each subsidiary based on the proportion of its taxable income to the total consolidated taxable income.




A reconciliation of the expected income tax expense (benefit) to reported income tax follows:





Years EndedDecember 31,2010


2009Federal income tax (benefit) at 35% statutory income tax rate

$
(7,807
)

$
(38,894
)Nondeductible increase non-taxable (decrease) in Allowance for doubtful accounts


20,960



(56,219
)Change in valuation allowance


(11,331
)


99,593Provision for income taxes

$
1,822


$
4,480




F-10




Net operating loss carryovers at December 31, 2010 were approximately $535,000 and will expire in years from 2011 to 2030. The Company does not anticipate fully utilizing these carryovers in 2011.




NOTE 8 – Commitments and Contingencies




Leases




The Company, through various subsidiaries, sub-lets properties to several franchisees. Additionally, several franchisees sub-let property from affiliates of the Company’s President (See Note 10). Franchisees typically pay rent on these properties to the subsidiaries. In some circumstances, franchisees may pay rent directly to the lessors of the operating leases.




Future minimum lease payments under theseoperating leases at December 31, 2010 are as follows:





2011

$
370,9082012


382,0352013


393,4962014


401,3662015


349,3942016 and thereafter


1,367,050$
3,264,249


Future minimum rental income on sub-leases at December 31, 2010 are as follows:





2011

$
286,8682012


293,6742013


240,6842014


247,9052015


297,5762016 and thereafter


1,837,516$
3,204,223


The company leases an office in New York under an agreement that commenced in October 2003 and expires in September 2013. Total gross rent expense for the years ended December 31 2010 and 2009 was $21,401 and $18,134, respectively.





The future minimum annual rental payments at December 31, 2010 are as follows:





2011

$
23,3252012


24,6752013


18,675$
66,675




F-11




Employment Agreements




The President of the Company, Mr. Robert Baskind, has an employment contract that renews annually on the first day of each year and which entitled him to a salary of approximately $181,000 during 2010. In accordance with the terms of the employment contract, he is entitled to five percent increases on a yearly basis. The employment agreement, as amended, expires in 2015. Additionally, Mr. Baskind’s agreement provides for other customary provisions.




NOTE 9 – Concentration of Credit Risk




Financial instruments that potentially subject the Company to credit risk include cash and accounts and notes receivable. At December 31, 2010 one account exceeded federally insured limits by approximately $3,200 and at December 31, 2009 one account exceeded the federally insured limits by approximately $211,025. Also, at December 31, 2010 and December 31, 2009, the Company had accounts and notes receivable from franchisees of approximately $321,000 and $375,000, respectively, net of an allowance for doubtful accounts of approximately $350,000 and $290,000, respectively. Notes receivable, derived principally from sales of franchises and market areas, are collateralized by the franchise agreements to which they relate. Presently, a majority of the Company’s franchises are within the states of New York, Florida and Colorado.




NOTE 10 - Related Party Transactions




Franchise Facilities




The Company rents certain franchise locations owned or leased by the Company’s president and affiliates, which are sublet to franchisees. For the years ended December 31, 2010 and 2009, rent paid to the Company’s president and affiliates for real estate sublet was $64,478 and $23,444, respectively. During the year ended December 31, 2010, the Company was charged for underpaid prior rent in the amount of $41,000. The charge was paid to a realty company partially owned by the Company’s president. The Company is currently attempting to sell the rights to the location to a prospective franchisee. Management believes that the lease payments made by the Company to these officers, directors, and affiliates are at fair market value and are approximately equal to the rent charged to the franchises occupying each facility.




NOTE 11 - Stock Options




Tilden Associates, Inc. Stock Option Plans




From May 1998 to December 2005, the Company adopted several Tilden Associates, Inc. Stock Option Plans (“the Plans”) on an annual basis. The Company may issue incentive options for a term of no greater than ten years and non-incentive stock options for a term of no greater than eleven years. The incentive stock options may be issued with an exercise price of no less than 100% of the fair market value of the stock at the time of the grant. However, in the case of employees holding greater than 10% of the Company’s common stock, the option price shall not be less than 110% of the fair market value of the stock at the time of the grant and the term of the option may not exceed five years. The non-incentive stock options may be issued with an exercise price of no less than 50% of the fair market value of the stock at the time of the grant. Additionally, options may be granted to any eligible person for shares of common stock of any value provided that the aggregate fair market value of the stock with respect to which incentive stock options are exercisable for the first time during any calendar year, shall not exceed $100,000. Additionally, the option price shall be paid in full at the time of exercise in cash or, with the approval of the Board of Directors, in shares of common stock. Further, if prior to the expiration of the option the employee ceases to be employed by the Company, the options granted will terminate 90 days after termination of the employee’s employment with the Company.




From 1998 to 2005, the Company granted stock options to purchase a total of 7,038,300 shares of the Company’s common stock at exercise prices ranging from $0.01 per share to $3.00 per share. Through December 31, 2005, 32,500 options were exercised, 938,800 options expired or were forfeited, and 6,067,000 options remained outstanding at December 31, 2005.




On July 18, 2006, a derivative action was filed challenging the issuance of stock options by the Company to members of management and the Board of Directors between 2001 and 2005. In August of 2006, the Company rescinded the stock options issued in the years 2001 to 2005. On September 11, 2006, the action was settled.




F-12





On December 22, 2008, the Company granted a total of 1,150,000 stock options (600,000 options to the Company’s chief executive officer, 525,000 options to the Company’s two other directors, and 25,000 to a Company consultant. The options are exercisable at a price of $0.02 per share and expire in five years. The $7,475 fair value of the options, which was calculated using the Black-Scholes option pricing model using the following assumptions: $0.01 stock price, $0.02 exercise price, 2% risk free interest rate and 100% volatility, was expensed $1,122 in 2009 and $6,353 in 2010.




On December 17, 2009, the Company granted a total of 1,150,000 stock options (600,000 options to the Company’s chief executive officer, 525,000 options to the Company’s two other directors, and 25,000 to a Company consultant. The options are exercisable at a price of $0.02 per share and expire in five years. The $27,485 fair value of the options, which was calculated using the Black-Scholes option pricing model using the following assumptions: $0.03 stock price, $0.02 exercise price, 2% risk free interest rate and 100% volatility, was expensed in 2010.




On December 17, 2010, the Company granted a total of 1,150,000 stock options (600,000 options to the Company’s chief executive officer, 525,000 options to the Company’s two other directors, and 25,000 to a Company consultant. The options are exercisable at a price of $0.02 per share and expire in five years. The $27,600 fair value of the options, which was calculated using the Black-Scholes option pricing model using the following assumptions: $0.03 stock price, $0.02 exercise price, 2.06% risk free interest rate and 100% volatility, was expensed in 2010.




A summary of stock options activity for the years ended December 31, 2009 and 2010 are as follows:




Balance outstanding, January 1, 2009
1,150,000Granted December 17, 2009
1,150,000Balance outstanding, December 31, 2009
2,300,000Granted December 17, 2010
1,150,000Balance outstanding, December 31, 2010
3,450,000
  Stock options outstanding at December 31, 2010 consist of:
 Date Granted

Number Outstanding


Number Exercisable


Exercise Price

Expiration DateDecember 22, 2008


1,150,000



1,150,000


$
0.02

December 22, 2013December 17, 2009


1,150,000



1,150,000


$
0.02

December 17, 2014December 17, 2010


1,150,000



1,150,000


$
0.02

December 17, 2015Total


3,450,000



3,450,000





F-13





NOTE 12 – Franchises and Market Area Activities




Franchises




During the years ended December 31, 2010 and 2009, the Company sold none and three new franchises, respectively. As of December 31, 2010 and 2009, the Company had 40 and 43 active franchised locations. Throughout each year several franchises are returned to the Company’s control either through foreclosures or abandonment. The Company had no franchisor-owned repair shops in operation during the years ended December 31, 2010 and 2009.




Market Areas




During the years ended December 31, 2010 and 2009, the Company sold no rights in 2010 and one right in 2009 to develop new market areas resulting in market area sales income of $0 and $50,000 during the respective years.




NOTE 13 – Retirement Plan




In November, 2006, the Company adopted a qualified deferred arrangement 401(k) plan where employees may contribute up to the Internal Revenue Service deferred compensation limit for 401(k) plans, which was $16,500 in 2010. The plan allows the Company to make optional non-elective contributions into the plan for full-time employees. For the years ended December 31, 2010 and 2009, Company contributions to the plan (which are expensed when incurred) were $10,692 and $0, respectively.




NOTE 14 - Sale of Real Property




In December 2010, the Company exercised its option to purchase certain real property in Houston, Texas from the lessor of a franchise location. The option had been originally stipulated as part of the signing of a long-term lease by the Company in June, 2000. The option was re-negotiated and executed in September, 2010. The cost of purchasing the real property from the lessor was approximately $391,000. The purchase was financed by cash on hand at the time of the purchase. The Company had identified a buyer for the location and was able to simultaneously sell the real property for $675,000 resulting in a profit of approximately $284,000. The Company also negotiated to lease the location from the buyer of the real property and sublet the location to a franchisee.





F-14





MICHAEL T. STUDER CPA P.C.


18 East Sunrise Highway, Suite 311


Freeport, N.Y. 11520


Phone: (516) 378-1000


Fax: (516) 546-6220




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


ON SUPPLEMENTAL FINANCIAL INFORMATION




To the Board of Directors and Stockholders of


Tilden Associates, Inc.




My report on the audit of the basic consolidated financial statements of Tilden Associates, Inc. and subsidiaries for the years 2010 and 2009 appears on page F-2. The audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole.




The supplementary information presented in the schedule of selling, general and administrative expenses that appears on page F-15, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements for the years 2010 and 2009 and, in my opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.




/s/ Michael T. Studer CPA P.C.Freeport, New YorkApril 15, 2011




F-15




TILDEN ASSOCIATES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SELLING,


GENERAL AND ADMINISTRATIVE EXPENSES





Year Ended December 31,2010


2009Salaries and compensation expense

$
197,150


$
169,684Officer’s salary


180,893



171,000Stock option compensation expense


61,438



—Payroll and other taxes


21,697



18,142Employee benefits


10,692



—Provision for doubtful accounts


122,909



269,345Professional fees


70,609



79,091Consulting


5,050



13,211Rent


21,401



18,134Office expense


19,520



14,095Telephone expense


6,927



6,585Fees and licenses


8,842



12,156Amortization expense


1,462



1,462Depreciation expense


—



1,799Travel and entertainment


19,194



22,484Trade shows


1,300



3,000Training


—



2,500Automobile expense


18,661



18,609Advertising


1,600



4,542Settlement expense


17,000



—Insurance


12,195



6,968Miscellaneous expense


3,660



2,971$
802,200


$
835,778




F-16




TILDEN ASSOCIATES, INC. AND SUBSIDIARIES




SIGNATURES




In accordance with section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed by the undersigned, thereunto duly authorized.





Date: April 15, 2011
TILDEN ASSOCIATES, INC.By:
/s/ ROBERT BASKINDRobert BaskindPresident andChief Executive Officer





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 dates indicated.





Signatures

Titles
DateBy:
/s/ ROBERT BASKIND

Chairman of the Board, President
April 15, 2011Robert Baskind

Chief Executive Officer (PrincipalExecutive and Financial Officer)




F-17