UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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


For the
quarterly period ended March 31, 2010





Commission
File Number 033-19411-C





TetriDyn
      Solutions, Inc.(Exact
      name of registrant as specified in its charter)Nevada
            20-5081381(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)1651
      Alvin Ricken Drive, Pocatello, ID  83201(Address
      of principal executive offices, including zip code)(208)
      232-4200(Registrant’s
      telephone number, including area code)n/a(Former
      name, former address and former fiscal year, if changed since last
      report)





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
            o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 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).





Yes
            o
            No
            o





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  ̈Non-accelerated
      filer o
            Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).





Yes
            o
            No
            x





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.  As of May 12, 2010, issuer had
21,881,863 outstanding shares of common stock, par value
$0.001.





TABLE
OF CONTENTS








Item
            Description
            PagePART
      I – FINANCIAL INFORMATIONItem
      1
            Financial
      Statements
            3Condensed
      Consolidated Balance Sheets (Unaudited)
            3Condensed
      Consolidated Statements of Operations (Unaudited)
            4Condensed
      Consolidated Statements of Cash Flows (Unaudited)
            5Notes
      to Condensed Consolidated Financial Statements (Unaudited)
            6Item
      2
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            10Item
      3
            Quantitative
      and Qualitative Disclosures about Market Risk
            15Item
      4T
            Controls
      and Procedures
            15PART
      II – OTHER INFORMATIONItem
      6
            Exhibits
            16Signature
            16














PART
I – FINANCIAL INFORMATION





ITEM
1.  FINANCIAL STATEMENTS








TETRIDYN SOLUTIONS, INC. AND
      SUBSIDIARYCONDENSED
      CONSOLIDATED BALANCE SHEETSMarch
      31,
            
            
            December
      31,2010
            
            
            2009(Unaudited)ASSETSCurrent
      AssetsCash
            $
            60,755
            
            $
            123,784Accounts
      receivable, current portion
            
            47,993
            
            
            132,706Inventory
            
            43,027
            
            
            739Prepaid
      expenses
            
            10,567
            
            
            16,806Total
      Current Assets
            
            162,342
            
            
            274,035Property
      and Equipment, net
            
            49,355
            
            
            43,005Accounts
      receivable, net of current portion
            
            2,208
            
            
            3,088Total
      Assets
            $
            213,905
            
            $
            320,128LIABILITIESCurrent
      LiabilitiesAccounts
      payable
            $
            255,193
            
            $
            217,135Accrued
      liabilities
            
            46,228
            
            
            64,970Unearned
      revenue
            
            24,833
            
            
            33,084Notes
      payable, current portion
            
            94,859
            
            
            113,181Total
      Current Liabilities
            
            421,113
            
            
            428,370Long-Term
      LiabilitiesNotes
      payable, net of current portion
            
            311,502
            
            
            322,905Total
      Long-Term Liabilities
            
            311,502
            
            
            322,905Total
      Liabilities
            
            732,615
            
            
            751,275COMMITMENTS
      AND CONTINGENCIES
            
            -
            
            
            -STOCKHOLDERS'
      DEFICITPreferred
      stock - $0.001 par valueAuthorized:
            5,000,000
      sharesIssued
      and outstanding:
            1,200,000
      shares and1,200,000
      shares, respectively
            
            1,200
            
            
            1,200Common
      stock - $0.001 par valueAuthorized:
            100,000,000
      sharesIssued
      and outstanding:
            21,881,863
      shares and21,881,863
      shares, respectively
            
            21,882
            
            
            21,882Additional
      paid-in capital
            
            
            2,810,330
            
            
            2,810,330Accumulated
      deficit
            
            
            (3,352,122)
            
            
            (3,264,559)Total
      Stockholders' Deficit
            
            
            (518,710)
            
            
            (431,147)Total
      Liabilities and Stockholders' Deficit
            $
            213,905
            
            $
            320,128See
      the accompanying notes to condensed consolidated unaudited financial
      statements.











TETRIDYN SOLUTIONS, INC. AND
      SUBSIDIARYCONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)For
      the Three Months EndedMarch
      31,2010
            
            2009Revenue
            $
            162,261
            
            $
            303,778Cost
      of Revenue
            
            75,047
            
            
            102,909Gross
      Profit
            
            87,214
            
            
            200,869Operating
      ExpensesGeneral
      and administrative
            
            76,407
            
            
            82,086Professional
      fees
            
            24,843
            
            
            20,507Selling
      and marketing
            
            19,010
            
            
            23,391Research
      and development
            
            40,894
            
            
            28,929Total
      Operating Expenses
            
            161,154
            
            
            154,913Net
      Profit (Loss) from Operations
            
            (73,940)
            
            
            45,956Other
      Income (Expenses)Other
      Income (Expense)
            
            61
            
            
            64Interest
      Income
            
            96
            
            
            155Interest
      Expense
            
            (13,780)
            
            
            (5,958)Total
      Other Income (Expenses)
            
            (13,623)
            
            
            (5,739)Net
      Profit (Loss) from Continuing Operations beforeProvision
      for Income Taxes
            
            (87,563)
            
            
            40,217Provision
      for Income Taxes
            
            -
            
            
            -Net
      Income (Loss) from Continuing Operations
            $
            (87,563)
            
            $
            40,217Discontinued
      OperationsLoss
      from Operations of Discontinued Subsidiary
            $
            -
            
            $
            (73,518)Income
      (Loss) from Discontinued Operations
            $
            -
            
            $
            (73,518)Net
      Profit (Loss)
            $
            (87,563)
            
            $
            (33,301)Basic
      and Diluted Profit (Loss) Per Common ShareContinuing
      operations
            $
            -
            
            $
            -Discontinued
      operations
            $
            -
            
            $
            -Total
      Basic and Diluted Profit (Loss) Per Common Share
            $
            -
            
            $
            -Basic
      and Diluted Weighted-AverageCommon
      Shares Outstanding
            
            21,881,863
            
            
            21,381,863See
      the accompanying notes to condensed consolidated unaudited financial
      statements.

















TETRIDYN SOLUTIONS, INC. AND
      SUBSIDIARYCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)For
      the Three Months EndedMarch
      31,2010
            
            2009Cash
      Flows from Operating ActivitiesNet
      Profit (Loss)
            $
            (87,563)
            
            $
            (33,301)Less:
      Net profit (loss) from discontinued operations
            $
            -
            
            $
            (73,518)Profit
      (Loss) from Continuing Operations
            $
            (87,563)
            
            $
            40,217Adjustments
      to reconcile net loss from continuing operations to net cash provided by
      (used in) operating activities from continuing operations:Depreciation
            
            3,650
            
            
            3,168Changes
      in operating assets and liabilities:Accounts
      receivable
            
            33,305
            
            
            12,732Prepaid
      expenses
            
            6,239
            
            
            4,293Accrued
      expenses
            
            (18,742)
            
            
            14,472Accounts
      payable
            
            38,058
            
            
            18,622Unearned
      revenue
            
            (8,251)
            
            
            (991)Net
      Cash Provided by (Used in) Operating Activities from Continuing
      Operations
            
            (33,304)
            
            
            92,513Net
      Cash Provided by (Used in) Operating Activities from Discontinued
      Operations
            
            -
            
            
            (104,661)Net
      Cash Provided by (Used in) Operating Activities
            
            (33,304)
            
            
            (12,148)Cash
      Flows from Investing ActivitiesPurchase
      of property and equipment
            
            -
            
            
            (10,044)Net
      Cash Used in Investing Activities from Continuing
    Operations
            
            -
            
            
            (10,044)Net
      Cash Used in Investing Activities from Discontinued
    Operations
            
            -
            
            
            -Net
      Cash Used in Investing Activities
            
            -
            
            
            (10,044)Cash
      Flows from Financing ActivitiesPrincipal
      payments on notes payable
            
            (29,725)
            
            
            (25,076)Net
      Cash Provided by (Used in) Financing Activities from Continuing
      Operations
            
            (29,725)
            
            
            (25,076)Net
      Cash Provided by (Used in) Financing Activities from Discontinued
      Operations
            
            -
            
            
            -Net
      Cash Provided by (Used in) Financing Activities
            
            (29,725)
            
            
            (25,076)Net
      Increase in Cash
            
            (63,029)
            
            
            (47,268)Cash
      at Beginning of Period
            
            123,784
            
            
            357,157Cash
      at End of Period
            $
            60,755
            
            $
            309,889Supplemental
      Disclosure of Cash Flow Information:Cash
      paid for income taxes
            $
            -
            
            $
            -Cash
      paid for interest expense and lines of credit
            $
            6,141
            
            $
            5,131Supplemental
      Noncash Investing and Financing:During
      the quarter ending March 31, 2010, the Company received
    froma
      former subsidiary inventory worth $42,288 and equipment worth$10,000,
      reducing the accounts receivable balance from the formersubsidiary
      by $52,288.See
      the accompanying notes to condensed consolidated unaudited financial
      statements.











TETRIDYN
SOLUTIONS, INC. AND SUBSIDIARIES


Notes
to the Condensed Consolidated Financial Statements


(Unaudited)





Note
1 – Basis of Presentation





The
accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America, or GAAP, and the rules and regulations of the
Securities and Exchange Commission for interim financial
information.  Accordingly, they do not include all the information
necessary for a comprehensive presentation of financial position and results of
operations.





It is
management’s opinion, however, that all material adjustments (consisting of
normal recurring adjustments) have been made that are necessary for a fair
financial statements presentation.  The results for the interim period
are not necessarily indicative of the results to be expected for the
year.  The interim condensed consolidated financial statements should
be read in conjunction with the Company’s annual report on Form 10-K for the
year ended December 31, 2009, including the financial statements and notes
thereto.





Note
2 – 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 condensed 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 January 1, 2009, to March 31,
2009.  Intercompany accounts and transactions have been eliminated in
consolidation.





Business Segments
– In 2009, the Company’s services were 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, and the Company currently has only
one segment.





Use of Estimates
– In preparing financial statements in conformity with 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.





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 paid for on a project basis and on a contracted payment schedule,
which is not cancelable or refundable.  Revenue for these services is
recognized over the contract period.





One
customer, a regional critical access hospital, represented 33% of sales for the
three-month period ended March 31, 2010.  The Company had a different
regional hospital customer that represented 81% of sales for the three-month
period ended March 31, 2009.





Going
Concern– The
accompanying condensed consolidated financial statements have been prepared on
the assumption that the Company will continue as a going concern.  As
reflected in the accompanying condensed consolidated financial statements, the
Company had a net loss $87,563 and used $33,304 of cash in operating activities
for the three months ended March 31, 2010.  The Company had a working
capital deficiency of $258,771 and a stockholders’ deficiency of $518,710 as of
March 31, 2010.  The ability of the Company to continue as a going
concern is dependent on its ability to increase 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.





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.





Inventory –Inventory is recorded at cost and the Company utilizes the First-In,
First-Out (FIFO) cost flow method.  Gains or losses on dispositions of
inventory are included in the results of operations when realized.





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
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 260, “Earnings Per
Share.”  As of March 31, 2010 and 2009, 3,465,000 and
3,520,500, respectively, of common share equivalents were antidilutive and not
used in the calculation of diluted net loss per share.





Stock-Based
Compensation– 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 period, 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.















Recent Accounting
Pronouncements –In October 2009, the FASB issued Accounting Standard
Update (“ASU”) No. 2009-13, which addresses the accounting for
multiple-deliverable arrangements to enable vendors to account for products or
services separately rather than as a combined unit and modifies the manner in
which the transaction consideration is allocated across the separately
identified deliverables.  The ASU significantly expands the disclosure
requirements for multiple-deliverable revenue arrangements.  The ASU
will be effective for the first annual reporting period beginning on or after
June 15, 2010, and may be applied retrospectively for all periods presented
or prospectively to arrangements entered into or materially modified after the
adoption date.  Early adoption is permitted, provided that the
guidance is retroactively applied to the beginning of the year of
adoption.  The Company does not expect the adoption of ASU No. 2009-13
to have any effect on its financial statements upon its required adoption on
January 1, 2011.





Reclassifications
– Certain amounts in the 2009 information have been reclassified to
conform to the 2010 presentation.  These reclassifications had no
impact on the Company’s net loss or cash flows.





Note
3 – Inventory





The
Company’s inventory is comprised of regular inventory and direct materials to be
used in the manufacture of new products.  The Company’s regular
inventory as of March 31, 2010, and December 31, 2009, consisted of one piece of
equipment valued at $739.  During the quarter ended March 31, 2010,
the Company received direct materials in exchange for reduction of a former
variable interest subsidiary’s debt to the Company by $42,288.





Note
4 – Notes Payable





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.





Note
5 – Investments





Until the
fourth quarter of 2009, the Company was 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 the Company had an approximately 39% interest at December 31,
2009.  Effective October 2009, the Company is no longer in management
or financial control of this entity, although as of March 31, 2010, it holds an
approximately 38% minority interest.  Effective September 30, 2009,
the Company changed from the variable interest consolidation method of
accounting for this entity to the cost method of accounting for this
entity.












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





The
following discussion should be read in conjunction with our unaudited condensed
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 of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, such as statements relating to our anticipated revenues, gross
margin and operating results, estimates used in the preparation of our financial
statements, 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 software and IT services
industries, 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.  Our business was founded
as an Idaho corporation, TetriDyn Solutions, Inc.  On March 22, 2006,
we completed a share exchange with Creative Vending Corp., then inactive, that
resulted in TetriDyn Solutions, Inc., becoming a wholly owned subsidiary of the
Florida corporation, the legal acquirer.  For accounting purposes, the
Idaho corporation was the accounting acquirer because its management and
controlling shareholders continued to manage and control the consolidated
enterprise following the exchange.  In June 2006, we changed our
corporate domicile from Florida to Nevada and changed our name from Creative
Vending Corp. to TetriDyn Solutions, Inc.





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.





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.  Effective October 2009, we are no longer in management or
financial control of this entity, although as of March 31, 2010, we hold an
approximately 38% 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.















Description
of Expenses





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





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





Selling
and marketing expenses consist 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 and equipment used
by these employees in the development of new or enhanced product
offerings.





In
accordance with FASB 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 Three Months Ended March 31, 2010 and 2009





Revenues





Our
revenue was $162,261 for the three months ended March 31, 2010, compared to
$303,778 for the three months ended March 31, 2009, representing a decrease of
$141,517, or 47%, for the three-month period.  The decrease in
revenues 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 $75,047 for the three months ended March 31, 2010, compared to
$102,909 for the three months ended March 31, 2009, representing a decrease of
$27,862, or 27%, for the three-month period.  The gross margin
percentage on revenue was 54% for the three months ended March 31, 2010, and 66%
for the three months ended March 31, 2009.  The decrease in the gross
margin percentage for the three months ended March 31, 2010, from the three
months ended March 31, 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 the three months ended March 31, 2010 and 2009, are summarized
above, the trends contained therein are limited and 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 $76,407 for the three
months ended March 31, 2010, compared to $82,086 for the three months ended
March 31, 2009, representing a decrease of $5,679, or 7%, in
2010.  The decrease in our general and administrative expenses for the
three-month period ended March 31, 2010, as compared to the three months ended
March 31, 2009, reflects a decrease in salary for executives while other
personnel were reassigned from supporting the regional hospital customer
full-time in 2009 to developing new business strategies for the IT services
sector in 2010.





Professional
Fees — Professional fees expenses for our continuing operations, including
noncash compensation expense, were $24,843 for the three months ended March 31,
2010, compared to $20,507 for the three months ended March 31, 2009,
representing an increase of $4,336, or 21%, for the three-month
period.  The increase in our professional fees expenses for the
three-month period ended March 31, 2010, as compared to the three months ended
March 31, 2009, reflects the increased legal fees associated with the 2009 10-K
filing and our amended articles of incorporation for the Series A Preferred
Stock.





Selling
and Marketing — Selling and marketing expenses for our continuing operations,
including noncash compensation expense, were $19,010 for the three months ended
March 31, 2010, compared to $23,391 for the three months ended March 31, 2009,
representing a decrease of $4,381 or 19%, for the three-month
period.  The decrease in our selling and marketing expenses for the
three-month period ended March 31, 2010, as compared to the three months ended
March 31, 2009, reflects our reduction of full-time dedicated staff in this
department.





Researchand Development —
Research and development expenses for our continuing operations, including
noncash compensation expense, were $40,894 for the three months ended March 31,
2010, compared to $28,929 for the three months ended March 31, 2009,
representing an increase of $11,965, or 41%, for the three-month
period.  The increase in research and development expenses reflects
the reclassification of our engineering staff supporting discontinued operations
in 2009 to supporting continuing operations in 2010.





Interest
expense was $13,780 for the three months ended March 31, 2010, as compared to
$5,958 for the three months ended March 31, 2009, representing an increase of
$7,822, or 131%, for the three-month period.  The increase in interest
expense is directly related to our increased use of short-term borrowing while
we build up our revenues to cover operations.





Liquidity
and Capital Resources





At March
31, 2010, our principal source of liquidity consisted of $60,755 of cash, as
compared to $123,784 of cash at December 31, 2009.  In addition, our
stockholders’ deficit was $518,710 at March 31, 2010, compared to stockholders’
deficit of $431,147 at December 31, 2009, an increase in the deficit of
$87,563.















Our
continuing operations used $33,304 of net cash during the three months ended
March 31, 2010, as compared to the $92,513 of net cash provided by our
continuing operations during the three months ended March 31,
2009.  The $125,817 increase in the net cash used by our operating
activities resulted primarily from the reduction in revenues due to the lost
service contract with a local regional hospital.





Investing
activities for the three months ended March 31, 2010, used no net cash, as
compared to $10,044 net cash used during the three months ended March 31,
2009.  However, we had noncash investing activities of $10,000 for
equipment in the three-month period ended March 31, 2010.  We also had
noncash operating activities of $42,288 for direct materials inventory in the
three-month period ended March 31, 2010.  The noncash activities were
a result of exchanging equipment and materials for debt reduction with a former
variable interest subsidiary.





Financing
activities for our continuing operations used net cash of $29,725 during the
three months ended March 31, 2010, compared to using net cash of $25,076 during
the three months ended March 31, 2009.  The increase of $4,649 of net
cash used in financing activities is the result of paying down more principal in
2010.





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 GAAP, 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 the condensedconsolidatedfinancial 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 our condensedconsolidatedfinancial 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 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 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 us.  We
also sell installation and post-contract 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 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.  We recognize 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.





We also
provide IT management consulting services.  These services are paid
for on a project basis and on a contracted payment schedule, 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 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.





Recent
Accounting Pronouncements





In
October 2009, the FASB issued ASU No. 2009-13, which addresses the
accounting for multiple-deliverable arrangements to enable vendors to account
for products or services separately rather than as a combined unit and modifies
the manner in which the transaction consideration is allocated across the
separately identified deliverables.  The ASU significantly expands the
disclosure requirements for multiple-deliverable revenue
arrangements.  The ASU will be effective for the first annual
reporting period beginning on or after June 15, 2010, and may be applied
retrospectively for all periods presented or prospectively to arrangements
entered into or materially modified after the adoption date.  Early
adoption is permitted, provided that the guidance is retroactively applied to
the beginning of the year of adoption.  We do not expect the adoption
of ASU No. 2009-13 to have any effect on our financial statements upon its
required adoption on January 1, 2011.















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
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.








ITEM
4T.  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 Securities Exchange Act of
1934, as amended, 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 officers (whom we
refer to in this periodic report as our Certifying Officers), as appropriate to
allow timely decisions regarding required disclosure.  Our management
evaluated, with the participation of our Certifying Officers, the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Securities Exchange Act) as of March 31, 2010, pursuant to
Rule 13a-15(b) under the Securities Exchange Act.  Based upon
that evaluation, our Certifying Officers concluded that, as of March 31, 2010,
our disclosure controls and procedures were effective.





There
were no changes in our internal control over financial reporting that occurred
during our most recently completed fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.





Our
management, including our chief executive officer and chief financial 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 control must be
considered relative to their costs.  Because of the inherent
limitations in all control systems, no evaluation of the control can provide
absolute assurance that all control issues and instances of fraud, if any,
within the Company have been detected.















PART
II – OTHER INFORMATION





ITEM
6.  EXHIBITS





The
following exhibits are filed as a part of this report:





Exhibit
      Number*
            
            Title
      of Document
            
            LocationItem
      3
            
            Articles
      of Incorporation and Bylaws3.03
            
            Designation
      of Rights, Privileges, and Preferences of Series A Preferred
      Stock
            
            Incorporated
      by reference from the annual report on Form 10-K for the year ended
      December 31, 2009, filed March 31, 2010Item
      31
            
            Rule
      13a-14(a)/15d-14(a) Certifications31.01
            
            Certification
      of Principal Executive Officer and Principal Financial Officer Pursuant to
      Rule 13a-14
            
            AttachedItem
      32
            
            Section
      1350 Certifications32.01
            
            Certification
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief
      Financial Officer)
            
            Attached


_______________


*
            All
      exhibits are numbered with the number preceding the decimal indicating 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 as an exhibit.








SIGNATURE





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





TETRIDYN
      SOLUTIONS, INC.(Registrant)Date:
      May 13, 2010
            By:
            /s/
      David W. HempsteadDavid
      W. Hempstead, President,
              Chief
      Executive Officer, and
              Principal
      Financial Officer