Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2012 | Jul. 27, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | TETRIDYN SOLUTIONS INC | ||
Entity Central Index Key | 827,099 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 10,241 | ||
Entity Common Stock, Shares Outstanding | 53,404,140 | ||
Document Fiscal Year Focus | 2,012 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2012 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2012 | Dec. 31, 2011 |
Current Assets | ||
Cash and cash equivalents | $ 857 | $ 18,609 |
Accounts receivable, net | 17,713 | 2,563 |
Prepaid expenses, net | 1,403 | 11,888 |
Total Current Assets | 19,973 | 33,060 |
Property and Equipment, net | 8,329 | 22,319 |
Total Assets | 28,302 | 55,379 |
Current Liabilities | ||
Accounts payable, net | 405,259 | 388,298 |
Accrued liabilities | 293,744 | 159,591 |
Customer deposits, net | 14,887 | 24,663 |
Notes payable, current portion | 133,699 | 99,614 |
Convertible note payable to related party, current portion | 150,000 | 0 |
Total Current Liabilities | 997,589 | 672,166 |
Long-Term Liabilities | ||
Notes payable, net of current portion | 166,556 | 209,667 |
Convertible notes payable to related party | 170,500 | 275,000 |
Total Long-Term Liabilities | 337,056 | 484,667 |
Total Liabilities | $ 1,334,645 | $ 1,156,833 |
COMMITMENTS AND CONTINGENCIES (See Note 8) | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized; 1,200,000 and 1,200,000 shares issued and outstanding as of December 31, 2012, and December 31, 2011, respectively | $ 1,200 | $ 1,200 |
Common stock, $0.001 par value, 100,000,000 shares authorized; 23,031,863 and 23,031,863 shares issued and outstanding as of December 31, 2012, and December 31, 2011, respectively | 23,032 | 23,032 |
Additional paid-in capital | 2,899,251 | 2,896,351 |
Accumulated deficit | (4,229,826) | (4,022,037) |
Total Stockholders' Deficit | (1,306,343) | (1,101,454) |
Total Liabilities and Stockholders' Deficit | $ 28,302 | $ 55,379 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued (in shares) | 1,200,000 | 1,200,000 |
Preferred Stock, Shares Outstanding (in shares) | 1,200,000 | 1,200,000 |
Common Stock, Par Value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued (in shares) | 23,031,863 | 23,031,863 |
Common Stock, Shares Outstanding (in shares) | 23,031,863 | 23,031,863 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Income Statement [Abstract] | ||
Revenue | $ 252,361 | $ 569,845 |
Cost of Revenue | 34,832 | 352,754 |
Gross Profit | 217,529 | 217,091 |
Operating Expenses | ||
General and administrative | 154,588 | 212,686 |
Professional fees | 31,962 | 41,596 |
Selling and marketing | 33,088 | 75,823 |
Research and development | 108,408 | 159,196 |
Total Operating Expenses | 328,046 | 489,301 |
Net Loss from Operations | (110,517) | (272,210) |
Other Income (Expenses) | ||
Interest Expense | (97,272) | (85,041) |
Total Other Expenses | (97,272) | (85,041) |
Net Loss before Provision for Income Taxes | (207,789) | (357,251) |
Provision for Income Taxes | 0 | 0 |
Net Loss | $ (207,789) | $ (357,251) |
Total Basic and Diluted Loss Per Common Share | $ (0.01) | $ (0.02) |
Basic and Diluted Weighted-Average Common Shares Outstanding | 23,031,863 | 22,561,971 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders Deficit - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, shares at Dec. 31, 2010 | 1,200,000 | 21,881,863 | |||
Beginning Balance, amount at Dec. 31, 2010 | $ 1,200 | $ 21,882 | $ 2,895,085 | $ (3,664,786) | $ (746,619) |
Issuance for outside director services, shares | 800,000 | ||||
Issuance for outside director services, amount | $ 800 | 1,681 | 1,681 | ||
Issuance for employees' services, shares | 150,000 | ||||
Issuance for employees' services, amount | $ 150 | 315 | 315 | ||
Issuance for consultants' services, shares | 200,000 | ||||
Issuance for consultants' services, amount | $ 200 | 420 | 420 | ||
Net Loss | $ (357,251) | (357,251) | |||
Ending Balance, Shares at Dec. 31, 2011 | 1,200,000 | 23,031,863 | |||
Ending Balance, Amount at Dec. 31, 2011 | $ 1,200 | $ 23,032 | 2,897,501 | $ (4,022,037) | (1,101,454) |
In kind contribution of rent | $ 2,900 | 2,900 | |||
Net Loss | $ (207,789) | (207,789) | |||
Ending Balance, Shares at Dec. 31, 2012 | 1,200,000 | 23,031,863 | |||
Ending Balance, Amount at Dec. 31, 2012 | $ 1,200 | $ 23,032 | $ 2,900,401 | $ (4,229,826) | $ (1,306,343) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities: | ||
Net Loss | $ (207,789) | $ (357,251) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 13,990 | 15,335 |
In-kind contribution of rent | 2,900 | 0 |
Common stock issued for services | 0 | 2,416 |
Impairment on inventory | 0 | 63,432 |
Increase (decrease) from changes in working capital items: | ||
Accounts receivable | (15,150) | 19,110 |
Prepaid expenses | 10,485 | 4,595 |
Accrued expenses | 134,153 | 97,802 |
Accounts payable | 16,961 | 22,674 |
Customer deposits | (9,776) | (6,280) |
Net Cash Used in Operating Activities | (54,226) | (138,167) |
Cash Flows from Financing Activities | ||
Proceeds from borrowing under related party notes payable | 45,500 | 125,000 |
Principal payments on notes payable | (9,026) | (33,231) |
Net Cash Provided by Financing Activities | 36,474 | 91,769 |
Net Decrease in Cash | (17,752) | (46,398) |
Cash at Beginning of Period | 18,609 | 65,007 |
Cash at End of Period | 857 | 18,609 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest expense and lines of credit | $ 66,686 | $ 68,367 |
1. Organization and Summary of
1. Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Organization and Summary of Significant Accounting Policies | Nature of Business Principles of Consolidation Business Segments Use of Estimates Cash and Cash Equivalents Revenue Recognition Long-Lived Assets Accounting for Goodwill and Other Intangible Assets Accounting for Impairment or Disposal of Long-Lived Assets Going Concern Income Taxes Income Taxes Fair Value of Financial Instruments Fair Value Measurements and Disclosures Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Companys financial instruments consist of accounts receivable, prepaid expenses, accounts payable, accrued liabilities, customer deposits, notes payable, and related-party convertible note payable. Pursuant to ASC 820, Fair Value Measurements and Disclosures Financial Instruments Property and Equipment Inventory Net Loss per Common Share Earnings Per Share Stock-Based Compensation 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 Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, Effective January 1, 2006, the Company adopted the provisions of FASB ASC 505 for its stock-based compensation plan. Under FASB ASC 505, all employee stock-based compensation is measured at the grant date, based on the fair value of the option or award, and is recognized as an expense over the requisite service, which is typically through the date the options or awards vest. The Company adopted FASB ASC 505 using the modified prospective method. Under this method, for all stock-based options and awards granted prior to January 1, 2006, that remain outstanding as of that date, compensation cost is recognized for the unvested portion over the remaining requisite service period, using the grant-date fair value measured under the original provisions of FASB ASC 505 for pro forma and disclosure purposes. Furthermore, compensation costs will also be recognized for any awards issued, modified, repurchased, or cancelled after January 1, 2006. As the result of adoption of FASB ASC 505, the Company recognized no compensation and $2,416 during the years ended December 31, 2012, and December 31, 2011, respectively (see Note 8). Recent Accounting Pronouncements Revenue from Contracts with Customers Revenue Recognition Revenue RecognitionConstruction-Type and Production-Type Contracts In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial StatementsGoing Concern In April 2015, FASB issued ASU No. 2015-03, InterestImputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In April 2015, FASB issued ASU No. 2015-05, IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Customers Accounting for Fees Paid in a Cloud Computing Arrangement All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. Reclassifications |
2. Property and Equipment
2. Property and Equipment | 12 Months Ended |
Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following as of December 31, 2012 and 2011: December 31 2012 2011 Computer & office equipment $ 51,587 $ 51,587 Company vehicle 33,981 33,981 Accumulated depreciation (77,239) (63,249) $ 8,329 $ 22,319 Depreciation expense during the years ended December 31, 2012 and 2011, was $13,990 and $15,335, respectively. |
3. Inventory
3. Inventory | 12 Months Ended |
Dec. 31, 2012 | |
Inventory Disclosure [Abstract] | |
Inventory | The Companys inventory is comprised of regular inventory and direct materials to be used in the manufacture of new products. During the year ended December 31, 2010, the Company received computer chips in exchange for a $63,432 reduction of a former variable interest subsidiarys debt to the Company. The Company reviewed the valuation of these computer chips and recognized an impairment loss on the chips for their full value of $63,432 in the year ended December 31, 2011. |
4. Investments
4. Investments | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Investments | As of December 31, 2011 and December 31, 2012, the Company had an approximately 40% minority interest in an entity that is developing electronic livestock tracking systems. The Company has no management or financial control over this entity and therefore accounted for the investment using the cost method. The value of the investment was $0 as of December 31, 2011 and 2012, as determined based on Level 3 inputs. |
5. Accounts Payable and Accrued
5. Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Accounts Payable and Accrued Liabilities | As of December 31, 2012, the Company had $405,259 in accounts payable, $356,693 of which was due on multiple revolving credit cards under the name of the Company's former chief executive officer and the Company's current president. These amounts represent advances to the Company from funds borrowed on credit cards in the names of these officers as an accommodation to the Company at a time when it was unable to obtain advances on its own credit. The obligations bear varying rates of interest between 5.25% and 27.24%. The Company agreed to reimburse the former chief executive officer and current president for these liabilities (see Note 12). As of December 31, 2012, the Company had $293,744 in accrued liabilities. The accrued liabilities also included $226,305 in unpaid salaries to two of its officers. |
6. Convertible Notes Payable to
6. Convertible Notes Payable to Related Party | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Convertible Notes Payable to Related Party | In 2010, the Company borrowed $150,000 in three separate loans from two of its officers and directors, repayable pursuant to various convertible promissory notes. The terms of the notes are as follows: (a) no interest will accrue if the note is repaid within 60 days; (b) if the note is not repaid within 60 days, the Company is obligated to pay 10% for costs associated with securing the funds; (c) if the loan is repaid within one year, no annual interest rate will be charged; however, if the loan is not repaid within one year, the note will accrue interest at 6% per annum, beginning on the one-year anniversary date of the note; (d) the lenders are authorized to convert part or all of the note balance and accrued interest, if any, into the Companys common stock at its fair value at any time while the note is outstanding; and (e) the loans due date for full repayment is December 31, 2013. Since the loans were not paid within 60 days, the Company is obligated to pay $15,000 for costs associated with securing the funds and accrued interest. In 2011, the Company borrowed $125,000 in five separate loans from two of its officers and directors, repayable pursuant to various convertible promissory notes. The terms of the notes are as follows: (a) no interest will accrue if the note is repaid within 60 days; (b) if the note is not repaid within 60 days, the Company is obligated to pay 10% for costs associated with securing the funds; (c) if the loan is repaid within one year, no annual interest rate will be charged; however, if the loan is not repaid within one year, the note will accrue interest at 6% per annum, beginning on the one-year anniversary date of the note; (d) the lenders are authorized to convert part or all of the note balance and accrued interest, if any, into the Companys common stock at its fair value at any time while the note is outstanding; and (e) the loans due date for full repayment is December 31, 2014. Since the loans were not paid within 60 days, the Company is obligated to pay $12,500 for costs associated with securing the funds. In 2012, the Company borrowed $45,500 in three separate loans from two of its officers and directors, repayable pursuant to various convertible promissory notes. The terms of the notes are as follows: (a) no interest will accrue if the note is repaid within 60 days; (b) if the note is not repaid within 60 days, the Company is obligated to pay 10% for costs associated with securing the funds; (c) if the loan is repaid within one year, no annual interest rate will be charged; however, if the loan is not repaid within one year, the note will accrue interest at 6% per annum, beginning on the one-year anniversary date of the note; (d) the lenders are authorized to convert part or all of the note balance and accrued interest, if any, into the Companys common stock at its fair value at any time while the note is outstanding; and (e) the loans due date for full repayment is December 31, 2014. Since the loans were not paid within 60 days, the Company is obligated to pay $4,500 for costs associated with securing the funds. As of December 31, 2012, the Company had $320,500 in convertible notes payable due to related parties with $37,510 in accrued interest. Annual maturities of convertible notes payable to related parties as of December 31, 2012, were as follows: Years Ending December 31: 2013 $ 150,000 2014 170,500 2015 - 2016 - 2017 - Thereafter - Total $ 320,500 |
7. Notes Payable in Default
7. Notes Payable in Default | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Notes Payable in Default | As of October 25, 2011, a loan from one economic development entity was in default. The loan principal was $50,000 with accrued interest of $5,664 through December 31, 2012. As of December 31, 2012, the Company was delinquent in payments on two loans to a second economic development entity. The Company owed this economic entity $30,692 in late payments with an outstanding balance of $163,791 and accrued interest of $14,095 as of December 31, 2012. Both loans are guaranteed by two of the Companys officers. One loan is secured by liens on intangible software assets and the other loan is secured by the officers personal property. The Company is working with this entity to bring the payments current as soon as cash flow permits. As of December 31, 2012, the Company was delinquent in payments on a loan to a third economic development entity. The Company owed the third economic entity $28,070 in late payments with an outstanding balance of $85,821 and accrued interest of $3,186 as of December 31, 2012. This loan is secured by a junior lien on all the Companys assets and shares of founders common stock. The Company is working with this entity to bring the payments current as soon as cash flow permits. Notes payable are summarized as follows: December 31, December 31, 2012 2011 Note payable to third party, due in monthly payments of $2,000 through September 2015, bearing interest at 7% per annum, secured by a junior lien on all of the Companys assets and shares of founders common stock $ 85,821 $ 85,821 Note payable to third party, due in monthly payments of $979 through July 2013, bearing interest at 6.25% per annum, guaranteed by two shareholders, secured by liens on intangible software assets 22,072 23,435 Note payable to third party, due in monthly payments of $1,742 through December 2014, bearing interest at 7.00% per annum, guaranteed by two shareholders secured by shareholders' personal property 141,719 141,719 Note payable to third party, originally due in full September 2010, and extended during 2010 until October 2011, bearing interest up to 5.00%, unsecured , in default 50,000 50,000 December 31, December 31, 2012 2011 Note payable to third party, originally due in full September 2010, and extended during 2010 until October 2011, bearing interest up to 5.00%, unsecured , in default 50,000 50,000 by certain asset 643 8,306 Total Notes Payable $ 300,255 $ 309,281 Less: Current Portion 133,699 99,614 Long-Term Notes Payable $ 166,556 $ 209,667 Annual maturities of notes payable as of December 31, 2012, were as follows: Years Ending December 31: 2013 $ 133,699 2014 140,766 2015 25,790 2016 - 2017 - Thereafter - Total $ 300,255 |
8. Stockholders' Deficit
8. Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2012 | |
Equity [Abstract] | |
Stockholders' Deficit | Common Stock No options were granted during 2011. No shares or options were granted in 2012. Weighted Average Fixed Options Shares Exercise Price Outstanding at beginning of year 3,378,000 Expired (1,360,000) $0.10 Outstanding at December 31, 2012 2,018,000 Exercisable at December 31, 2012 2,018,000 Weighted average exercise price of options granted to employees in the year ended December 31, 2012 $ -- Exercise Price Number Outstanding at Dec. 31, 2012 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at Dec. 31, 2012 Weighted Average Exercise Price $0.09 203,000 1.46 $0.09 203,000 $0.09 0.10 15,000 5.31 0.10 15,000 0.10 0.11 1,800,000 0.32 0.11 1,800,000 0.11 2,018,000 2,018,000 The aggregate intrinsic value represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Companys closing stock price of $0.015 for such day. The total intrinsic value of stock options exercised during fiscal years 2012 and 2011 was $0. A summary of the status of the Companys stock options as of December 31, 2011, and the changes during the period ended is presented below: Weighted Average Fixed Options Shares Exercise Price Outstanding at beginning of year 3,465,000 Expired (87,000) $0.10 Outstanding at December 31, 2011 3,378,000 Exercisable at December 31, 2011 3,378,000 Weighted average exercise price of options granted to employees in the year ended December 31, 2011 $ -- Exercise Price Number Outstanding at Dec. 31, 2011 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at Dec. 31, 2011 Weighted Average Exercise Price $0.09 203,000 2.46 $0.09 203,000 $0.09 0.10 1,375,000 0.50 0.10 1,375,000 0.10 0.11 1,800,000 1.32 0.11 1,800,000 0.11 3,378,000 3,378,000 Preferred Stock No preferred shares or options were granted in 2011 or 2012. In-Kind Contribution of Rent |
9. Concentrations
9. Concentrations | 12 Months Ended |
Dec. 31, 2012 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Sales Accounts Receivable |
10. Income Taxes
10. Income Taxes | 12 Months Ended |
Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | As of December 31, 2012, the Company has net operating loss carryforwards of approximately $3,000,955 that expire, if not used, from 2023 through 2032. The valuation allowance at December 31, 2012, was $1,227,542. The net change in the valuation allowance for the year ended December 31, 2012, was an increase of $79,743. The Company paid no income taxes during the years ended December 31, 2012 and 2011. Deferred tax assets and related valuation allowance were as follows at December 31, 2012 and 2011: December 31 2012 2011 Accrued payroll $ 53,518 $ -- Operating loss carryforwards 1,170,972 1,147,799 Depreciation 3,052 -- Total Deferred Income Tax Assets 1,227,542 1,147,799 Valuation allowance (1,227,542) (1,147,799) Net Deferred Income Tax Asset $ -- $ -- The following is a reconciliation of the tax benefit of pretax loss at the U.S. federal statutory rate with the benefit from income taxes: For the Years Ended December 31 2012 2011 Benefit at statutory rate (34%) $ (70,648) $ (121,465) Nondeductible permanent differences 1,336 67 Change in valuation allowance 79,743 139,332 State tax benefit, net of federal tax (10,431) (17,934) Benefit from Income Taxes $ - $ - |
11. Commitments and Contingenci
11. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Commitments and Contingencies | In March 2012, the executive compensation committee approved the continuation of officer salaries at the current annual rate of $50,000 for the Chief Executive Officer and the Deputy Chief Executive Officer. These salaries will remain in effect until the board and executive compensation committee approve further modifications. |
12. Subsequent Events
12. Subsequent Events | 12 Months Ended |
Dec. 31, 2012 | |
Notes To Financial Statements | |
Subsequent Events | Sales of Unregistered Securities in 2013 ● 200,000 restricted shares of common stock to existing employees of the Company, excluding directors and officers, as determined by management; ● 275,000 restricted shares of common stock to each outside director on a discretionary basis for past services; ● 150,000 restricted shares of common stock to an outside consultant for technical services; and ● 100,000 restricted shares of common stock to an outside consultant for marketing and product development services. The issuances were recorded for financial statment purposes at $0.02 per share, the approximate market price for the cmmon stock on the date the issuances were approved, for a total of $20,000. Credit Card Obligations Sale of Southfork Solutions, Inc. Consolidation of Convertible Notes Payable to Related Parties See 2015 Investment and Merger Agreements Investment Agreement JPFs investment is being used principally to initiate and pursue an updated technical and commercialization review of the Companys intellectual properties with a view toward possible broadened marketing introduction and, in general, advance the Companys business activities and to bring its regulatory filings current. The terms of the Investment Agreement provide that, if the Merger (as defined below) with OTE is consummated, 100% of the JPF Stock will be cancelled and returned to the status of authorized and unissued shares. The purpose of this intended cancellation is to ensure that the Companys current shareholders (excluding JPF) retain a 5% interest in the post-Merger company. If the Merger is not consummated, the JPF Stock will remain outstanding, and JPF will maintain its position as a 55% stockholder in the Company. Concurrently with the execution of the Investment Agreement, Antoinette Hempstead the estate of her late husband, David W. Hempstead (together, the Hempsteads), JPF, and Feakins entered into an agreement whereby, among other things: (i) JPF agreed to execute supplemental guarantees for the Hempsteads in connection with certain debt obligations to economic development entities owed by the Company and guaranteed by the Hempsteads; (ii) the Hempsteads transferred to JPF the consolidated convertible note payable by the Company to the Hempsteads with an outstanding principal balance of $394,380 as of December 31, 2014, together with accrued and unpaid payroll of $213,436, for a total of $607,816; and (iii) the Hempsteads returned to the Company for cancellation 1,200,000 shares of Series A Preferred Stock, which were cancelled. The Company has filed a Certificate of Withdrawal of Certificate of Designation for the preferred stock with the Nevada Secretary of State. As required by the Investment Agreement, two designees of JPF, Feakins and Peter Wolfson, were appointed as directors of the Company to replace incumbent directors Orville J. Hendrickson and Larry J. Ybarrondo, who resigned. See below. Agreement and Plan of Merger Merger Terms Conditions to Completion of Merger The California application for a Fairness Hearing is now pending. The Fairness Hearing and permitting application are significant and quite technical, and the determination of whether the Merger will meet the California fairness requirements will be subject to the discretion of the hearing officer. No assurance can be given as to whether or not the hearing will result in the denial of the application, an adjustment of the terms of the Merger, the issuance of a permit meeting the conditions of the Securities Act Section 3(a)(10) exemption, or other action. If California issues a permit availing the Company of the exemption under the Securities Act Section 3(a)(10) and the other conditions to closing the Merger are met, the Merger will be completed promptly thereafter. If California does not issue the permit or the other Merger conditions are not satisfied: (i) the Merger Agreement will terminate; (ii) the Company and OTE will remain as separate companies; and (iii) JPF will continue as the 55% controlling stockholder of the Companys stock as it seeks to advance commercialization of its technologies or pursue other opportunities. Completion of the Merger is also conditioned on the continuing accuracy of the representations and warranties of the respective parties to the Merger Agreement, the satisfaction of certain conditions, and other covenants, many of which may be waived by either party. Reverse Split to Facilitate Merger As a result of the Reverse Split, each record holder of less than 4.6972 shares of the Companys common stock immediately before the Reverse Split (the Minority Stockholders) will receive from the Company, cash in the amount of $0.03 per share of the Companys common stock, without interest (which includes a 20% premium over the fair market value of $0.025 per share as of March 3, 2015, as determined by the Companys board of directors), for each share of the Companys common stock held immediately before the Reverse Split, and the Minority Stockholders will no longer be the Companys stockholders. Each record holder of 4.6972 or more shares of the Companys common stock immediately before the Reverse Split will own approximately one-fifth of the number of shares of the Companys common stock held by such stockholder immediately before the Reverse Split. Post-Merger Business of OTE and the Company OTE is interested in the commercial potential of proprietary technologies being developed by the Company as opportunities for future business diversification. Further, OTE recognizes that the Companys status as a company that is subject to the periodic reporting requirements pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended, may enhance its access to the capital markets to fund future projects. After the Merger, the combined enterprise intends to continue opportunistically to develop the lines of business of both the Company and OTE as commercial opportunities are identified for one, the other, or both, after considering funding availability, potential financial returns, and related risks. Ownership of the Company Following the Merger and Reverse Split If the Merger is completed, the JPF Stock purchased pursuant to the Investment Agreement will be cancelled and returned to the Company, and the former OTE stockholders will own 95% of the Companys outstanding common stock (after giving effect to the exercise of OTE warrants and the conversion of OTE notes). The pre-Merger company shareholders will have a 5% interest in the post-Merger company, and the officers and directors of OTE will be the officers and directors of the post-Merger company. Change in Directors and Management See Change of Office Location 2015 Convertible Note Payable to Related Party On June 23, 2015, the Company borrowed $50,000 from its principal stockholder, JPF Venture Group, Inc., pursuant to a promissory note. The terms of the note are as follows: (i) interest is payable at 6% per annum; (ii) the note is payable 90 days after demand; and (iii) payee is authorized to convert part or all of the note balance and accrued interest, if any, into shares of the Companys common stock at their fair market value at the time of conversion. JPF is an investment entity that is majority-owned by Jeremy P. Feakins, a director, chief executive officer, and chief financial officer of the Company. |
1. Organization and Summary o19
1. Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2012 | |
Organization And Summary Of Significant Accounting Policies Policies | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, an Idaho corporation also named TetriDyn Solutions, Inc. Intercompany accounts and transactions have been eliminated in consolidation. |
Business Segments | The Company had only one business segment for the years ended December 31, 2012 and 2011. |
Use of Estimates | In preparing financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Estimates include the valuation of deferred tax assets, in-kind contribution of rent, and reserve for accounts receivable. 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 | Revenue from software licenses, 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. |
Long-Lived Assets | The Company accounts for long-lived assets under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, Accounting for Goodwill and Other Intangible Assets Accounting for Impairment or Disposal of Long-Lived Assets |
Going Concern | The accompanying consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern. As reflected in the accompanying consolidated financial statements, the Company had a net loss of $207,789 and used cash of $54,226 in operating activities for the year ended December 31, 2012. The Company had a working capital deficiency of $977,616 and a stockholders deficit of $1,306,343 as of December 31, 2012. These factors raise substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on its ability to increase its sales and obtain external funding for its product development. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. |
Income Taxes | The Company accounts for income taxes under FASB ASC 740-10-25, Income Taxes |
Fair Value of Financial Instruments | ASC 820, Fair Value Measurements and Disclosures Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Companys financial instruments consist of accounts receivable, prepaid expenses, accounts payable, accrued liabilities, customer deposits, notes payable, and related-party convertible note payable. Pursuant to ASC 820, Fair Value Measurements and Disclosures Financial 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 uses the First-In, First-Out (FIFO) cost flow method. Gains or losses on dispositions or impairment of inventory are included in the results of operations when realized. |
Net Loss per Common Share | Basic and diluted net loss per common share are computed based upon the weighted-average stock outstanding as defined by FASB ASC 260, Earnings Per Share |
Stock-Based Compensation | On June 17, 2009, at the Companys annual shareholders meeting, the Companys 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 the 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 Companys success. In addition, at the discretion of the board of directors or the committee, options or bonus stock may be granted to individuals who are not employees, officers, or directors, but contribute to the Companys 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 Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, Effective January 1, 2006, the Company adopted the provisions of FASB ASC 505 for its stock-based compensation plan. Under FASB ASC 505, all employee stock-based compensation is measured at the grant date, based on the fair value of the option or award, and is recognized as an expense over the requisite service, which is typically through the date the options or awards vest. The Company adopted FASB ASC 505 using the modified prospective method. Under this method, for all stock-based options and awards granted prior to January 1, 2006, that remain outstanding as of that date, compensation cost is recognized for the unvested portion over the remaining requisite service period, using the grant-date fair value measured under the original provisions of FASB ASC 505 for pro forma and disclosure purposes. Furthermore, compensation costs will also be recognized for any awards issued, modified, repurchased, or cancelled after January 1, 2006. As the result of adoption of FASB ASC 505, the Company recognized no compensation and $2,416 during the years ended December 31, 2012, and December 31, 2011, respectively (see Note 8). |
Reclassifications | Certain amounts in the 2011 information have been reclassified to conform to the 2012 presentation. These reclassification had no impact on the Company's net loss or cash flows. |
Recent Accounting Pronouncements | In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers Revenue Recognition Revenue RecognitionConstruction-Type and Production-Type Contracts In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial StatementsGoing Concern In April 2015, FASB issued ASU No. 2015-03, InterestImputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In April 2015, FASB issued ASU No. 2015-05, IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Customers Accounting for Fees Paid in a Cloud Computing Arrangement All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
2. Property and Equipment (Tabl
2. Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | December 31 2012 2011 Computer & office equipment $ 51,587 $ 51,587 Company vehicle 33,981 33,981 Accumulated depreciation (77,239) (63,249) $ 8,329 $ 22,319 |
6. Convertible Notes Payable 21
6. Convertible Notes Payable to Related Party (Tables) | 12 Months Ended |
Dec. 31, 2012 | |
Convertible Notes Payable To Related Party Tables | |
Annual maturities of convertible notes payable | Years Ending December 31: 2013 $ 150,000 2014 170,500 2015 - 2016 - 2017 - Thereafter - Total $ 320,500 |
7. Notes Payable in Default (Ta
7. Notes Payable in Default (Tables) | 12 Months Ended |
Dec. 31, 2012 | |
Notes Payable In Default Tables | |
Summary of notes payable | December 31, December 31, 2012 2011 Note payable to third party, due in monthly payments of $2,000 through September 2015, bearing interest at 7% per annum, secured by a junior lien on all of the Companys assets and shares of founders common stock $ 85,821 $ 85,821 Note payable to third party, due in monthly payments of $979 through July 2013, bearing interest at 6.25% per annum, guaranteed by two shareholders, secured by liens on intangible software assets 22,072 23,435 Note payable to third party, due in monthly payments of $1,742 through December 2014, bearing interest at 7.00% per annum, guaranteed by two shareholders secured by shareholders' personal property 141,719 141,719 Note payable to third party, originally due in full September 2010, and extended during 2010 until October 2011, bearing interest up to 5.00%, unsecured , in default 50,000 50,000 December 31, December 31, 2012 2011 Note payable to third party, originally due in full September 2010, and extended during 2010 until October 2011, bearing interest up to 5.00%, unsecured , in default 50,000 50,000 by certain asset 643 8,306 Total Notes Payable $ 300,255 $ 309,281 Less: Current Portion 133,699 99,614 Long-Term Notes Payable $ 166,556 $ 209,667 |
Annual maturities of notes payable | Years Ending December 31: 2013 $ 133,699 2014 140,766 2015 25,790 2016 - 2017 - Thereafter - Total $ 300,255 |
8. Stockholders' Deficit (Table
8. Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2012 | |
Equity [Abstract] | |
Summary of Company's stock options | Weighted Average Fixed Options Shares Exercise Price Outstanding at beginning of year 3,378,000 Expired (1,360,000) $0.10 Outstanding at December 31, 2012 2,018,000 Exercisable at December 31, 2012 2,018,000 Weighted average exercise price of options granted to employees in the year ended December 31, 2012 $ -- Weighted Average Fixed Options Shares Exercise Price Outstanding at beginning of year 3,465,000 Expired (87,000) $0.10 Outstanding at December 31, 2011 3,378,000 Exercisable at December 31, 2011 3,378,000 Weighted average exercise price of options granted to employees in the year ended December 31, 2011 $ -- |
Stock option by exercise range | Exercise Price Number Outstanding at Dec. 31, 2012 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at Dec. 31, 2012 Weighted Average Exercise Price $0.09 203,000 1.46 $0.09 203,000 $0.09 0.10 15,000 5.31 0.10 15,000 0.10 0.11 1,800,000 0.32 0.11 1,800,000 0.11 2,018,000 2,018,000 Exercise Price Number Outstanding at Dec. 31, 2011 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at Dec. 31, 2011 Weighted Average Exercise Price $0.09 203,000 2.46 $0.09 203,000 $0.09 0.10 1,375,000 0.50 0.10 1,375,000 0.10 0.11 1,800,000 1.32 0.11 1,800,000 0.11 3,378,000 3,378,000 |
10. Income Taxes (Tables)
10. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | December 31 2012 2011 Accrued payroll $ 53,518 $ -- Operating loss carryforwards 1,170,972 1,147,799 Depreciation 3,052 -- Total Deferred Income Tax Assets 1,227,542 1,147,799 Valuation allowance (1,227,542) (1,147,799) Net Deferred Income Tax Asset $ -- $ -- |
Schedule of Effective Income Tax Reconciliation | For the Years Ended December 31 2012 2011 Benefit at statutory rate (34%) $ (70,648) $ (121,465) Nondeductible permanent differences 1,336 67 Change in valuation allowance 79,743 139,332 State tax benefit, net of federal tax (10,431) (17,934) Benefit from Income Taxes $ - $ - |
1. Organization and Summary o25
1. Organization and Summary of Significant Accounting Policies (Narrative Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Notes To Financial Statements | |||
Net Loss | $ (207,789) | $ (357,251) | |
Net Cash Provided by (Used in) Operating Activities | (54,226) | (138,167) | |
Working Capital | 977,616 | ||
Stockholders' Equity Attributable to Parent | $ (1,306,343) | $ (1,101,454) | $ (746,619) |
Antidilutive Securities Excluded from Computation of Earnings Per Share | 17,810,200 | 91,666,667 |
2. Property and Equipment (Deta
2. Property and Equipment (Details) - USD ($) | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Abstract] | ||
Computer & office equipment | $ 51,587 | $ 51,587 |
Company vehicle | 33,981 | 33,981 |
Accumulated depreciation | (77,239) | (63,249) |
Property and Equipment, net | $ 8,329 | $ 22,319 |
2. Property and Equipment (De27
2. Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Property And Equipment Details Narrative | ||
Depreciation expense | $ 13,990 | $ 15,335 |
3. Inventory (Details Narrative
3. Inventory (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Inventory Details Narrative | ||
Impairment on inventory | $ 0 | $ 63,432 |
4. Investments (Narrative Detai
4. Investments (Narrative Details) - USD ($) | Dec. 31, 2012 | Sep. 30, 2011 |
Notes To Financial Statements | ||
Investment Value | $ 0 | $ 0 |
5. Accounts Payable and Accru30
5. Accounts Payable and Accrued Liabilities (Narrative Details) - USD ($) | Dec. 31, 2012 | Dec. 31, 2011 |
Notes To Financial Statements | ||
Accounts payable, net | $ 405,259 | $ 388,298 |
Revolving Credit Arrangements | 356,693 | |
Accrued liabilities | 293,744 | $ 159,591 |
Officers' Unpaid Salaries and Accrued Payroll Taxes | $ 226,305 |
6. Convertible Notes Payable 31
6. Convertible Notes Payable to Related Party (Details) | Dec. 31, 2012USD ($) |
Maturities for notes payable to related party | $ 320,500 |
2,013 | |
Maturities for notes payable to related party | 150,000 |
2,014 | |
Maturities for notes payable to related party | 170,500 |
2,015 | |
Maturities for notes payable to related party | 0 |
2,016 | |
Maturities for notes payable to related party | 0 |
2,017 | |
Maturities for notes payable to related party | 0 |
Thereafter | |
Maturities for notes payable to related party | $ 0 |
6. Convertible Notes Payable 32
6. Convertible Notes Payable to Related Party (Details Narrative) | Dec. 31, 2012USD ($) |
Notes To Financial Statements | |
Convertible notes payable to related party | $ 320,500 |
Related Party Note Payables Accrued Interest | $ 37,510 |
7. Notes Payable in Default (De
7. Notes Payable in Default (Details) - USD ($) | Dec. 31, 2012 | Dec. 31, 2011 |
Notes Payable In Default Details | ||
Total Notes Payable | $ 300,255 | $ 309,281 |
Less: Current Portion | 133,699 | 99,614 |
Long-Term Notes Payable | $ 166,556 | $ 209,667 |
7. Notes Payable in Default (34
7. Notes Payable in Default (Details 1) - USD ($) | Dec. 31, 2012 | Dec. 31, 2011 |
Years Ending December 31: | ||
2,013 | $ 133,699 | |
2,014 | 140,766 | |
2,015 | 25,790 | |
2,016 | 0 | |
2,017 | 0 | |
Thereafter | 0 | |
Total | $ 300,255 | $ 309,281 |
8. Stockholders' Deficit (Detai
8. Stockholders' Deficit (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Outstanding at beginning of year | 3,378,000 | |
Outstanding at end of year | 2,018,000 | 3,378,000 |
Exercisable at end of year | 2,018,000 | 3,378,000 |
Stock options | ||
Outstanding at beginning of year | 3,378,000 | 3,465,000 |
Expired | (1,360,000) | (87,000) |
Outstanding at end of year | 2,018,000 | 3,378,000 |
Exercisable at end of year | 2,018,000 | 3,378,000 |
Weighted average exercise price of options granted to employees in the year ended December 31, 2012 | $ 0 | $ 0 |
Weighted average exercise price of options expired | $ 0.10 | $ 0.10 |
8. Stockholders' Deficit (Det36
8. Stockholders' Deficit (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Outstanding at end of year | 2,018,000 | 3,378,000 |
Exercisable at end of year | 2,018,000 | 3,378,000 |
Exercise Price - 0.09 | ||
Outstanding at end of year | 203,000 | 203,000 |
Weighted Average Remaining Contractual Life | 1 year 5 months 16 days | 2 years 5 months 16 days |
Weighted Average Exercise Price, options outstanding | $ 0.09 | $ 0.09 |
Exercisable at end of year | 203,000 | 203,000 |
Weighted Average Exercise Price, options exercisable | $ 0.09 | $ 0.09 |
Exercise Price - 0.10 | ||
Outstanding at end of year | 15,000 | 1,375,000 |
Weighted Average Remaining Contractual Life | 5 years 3 months 22 days | 6 months |
Weighted Average Exercise Price, options outstanding | $ 0.10 | $ 0.10 |
Exercisable at end of year | 15,000 | 1,375,000 |
Weighted Average Exercise Price, options exercisable | $ 0.10 | $ 0.10 |
Exercise Price - 0.11 | ||
Outstanding at end of year | 1,800,000 | 1,800,000 |
Weighted Average Remaining Contractual Life | 3 months 25 days | 1 year 3 months 25 days |
Weighted Average Exercise Price, options outstanding | $ 0.11 | $ 0.11 |
Exercisable at end of year | 1,800,000 | 1,800,000 |
Weighted Average Exercise Price, options exercisable | $ 0.11 | $ 0.11 |
9. Concentrations (Details Narr
9. Concentrations (Details Narrative) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Customer A | ||
Percentage of sale from major customer | 54.00% | 11.00% |
Customer B | ||
Percentage of sale from major customer | 11.00% | 10.00% |
10. Income Taxes (Details)
10. Income Taxes (Details) - USD ($) | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ||
Accrued payroll | $ 53,518 | $ 0 |
Operating loss carry forwards | 1,170,972 | 1,147,799 |
Depreciation | 3,052 | 0 |
Total Deferred Income Tax Assets | 1,227,542 | 1,147,799 |
Valuation allowance | (1,227,542) | (1,147,799) |
Net Deferred Income Tax Asset | $ 0 | $ 0 |
10. Income Taxes (Details 1)
10. Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | ||
Benefit at statutory rate (34%) | $ (70,648) | $ (121,465) |
Non-deductible permanent differences | 1,336 | 67 |
Change in valuation allowance | 79,743 | 139,332 |
State tax benefit, net of federal tax | (10,431) | (17,934) |
Benefit from Income Taxes | $ 0 | $ 0 |