- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

Commission file number: 0001027484

TILDEN ASSOCIATES, INC.

(Exact name of small business issuer as specified in its charter)

DELAWARE		11-3343019
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

300 Hempstead Turnpike, West Hempstead, NY 11552

(Address of principal executive offices)

(516) 746-7911

(Issuer's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

The number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: August 18, 2010 was 11,385,903 shares of Common Stock - $.0005 par value.

Transitional Small Business Disclosure Format:

Yes o No x

Indicate by check mark whether 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 preceeding 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 registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company.

	Large accelerated filer	o		Accelerated filer		o
	Non-accelerated filer	o		Smaller reporting company		x

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b.2 of the Exchange Act) Yes o No x

Table of Contents for Form 10-Q

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets at June 30, 2010 (unaudited) and December 31, 2009 (audited)	3

	Consolidated Statements of Operations for the Six Month Periods Ended June 30, 2010 and 2009 (unaudited)	4

	Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2010 and 2009 (unaudited)	5

	Notes to Consolidated Financial Statements	6 - 9

Item 2.	Management's Discussion and Analysis or Plan of Operation	10 - 12

Item 3.	Controls and Procedures	13

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	14

Item 2.	Changes in Securities and Use of Proceeds	14

Item 3.	Defaults Upon Senior Securities	14

Item 4.	Submission of Matters to a Vote of Security Holders	14

Item 5.	Other Information	14

Item 6.	Exhibits	14

SIGNATURE		15

CERTIFICATION		16 - 17

TILDEN ASSOCIATES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	June 30, 2010			December 31, 2009
	(Unaudited)
ASSETS
Cash and cash equivalents	$	391,960		$	488,909
Accounts and notes receivable - net of allowance for doubtful accounts of $376,099 and $290,066 at June 30, 2010 and December 31, 2009, respectively		384,290			349,916
Inventory		4,300			4,300
Prepaid expenses and other current assets		4,164			4,164
Total current assets		784,714			847,289

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

Intangible assets, net of accumulated amortization of $123,489 and $122,758, respectively		280,307			281,038
Security deposits		72,485			72,484
Accounts and notes receivable, net of current portion		—			25,000
Total other assets		352,792			378,522
Total assets	$	1,137,506		$	1,225,811

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	168,042		$	204,307
Deposits on franchise and business acquisitions		183,000			198,000
Income taxes payable		36,312			39,271
Deferred Income		34,270			34,270
Total current liabilities		421,624			475,848

Security deposits		133,799			126,799
Total liabilities		555,423			602,647

STOCKHOLDERS' EQUITY
Common stock, $.0005 par value; 30,000,000 shares authorized; 11,425,903 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively		5,713			5,713
Additional paid-in capital		1,674,926			1,641,088
Retained earnings (accumulated deficit)		(1,078,556	)		(1,003,637	)
		602,083			643,164
Less: treasury stock - 40,000 shares, stated at cost		(20,000	)		(20,000	)
Total stockholders' equity		582,083			623,164
Total liabilities and stockholders' equity	$	1,137,506		$	1,225,811

See notes to consolidated financial statements.

F-3

TILDEN ASSOCIATES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010			2009		2010			2009
Revenues
Initial franchise acquisition fees	$	5,000		$	25,000	$	10,000		$	25,000
Royalty fees		137,528			151,197		261,561			300,865
Sale of Company owned location		—			103,831		93,000			103,831
Rental income from realty rental		122,562			161,682		231,032			294,105
Miscellaneous income		2,624			4,709		6,437			18,248
Total Revenue		267,714			446,419		602,030			742,049

Cost of Operations
Broker Fees		3,333			—		15,333			—
Costs of Company owned location sold		—			73,123		20,000			73,123
Franchise development fees		13,359			7,460		19,050			14,646
Rent paid for real estate sublet		121,712			166,604		224,266			278,723
Total Operating Costs		138,404			247,187		278,649			366,492
Gross Profit		129,310			199,232		323,381			375,557
Selling, general and administrative expenses		221,238			170,613		402,171			354,765

Income (loss) from operations before other income and expenses and provision for income taxes		(91,928	)		28,619		(78,790	)		20,792
Other Income
Interest income		418			294		3,871			5,276
Total other income		418			294		3,871			5,276
Income (loss) before provision for income taxes		(91,510	)		28,913		(74,919	)		26,068
Provision for income taxes
Current		—			—		—			—
Deferred		—			—		—			—
Net income (loss)	$	(91,510	)	$	28,913	$	(74,919	)	$	26,068
Per Share Data
Basic earnings per share	$	(0.01	)	$	—	$	(0.01	)	$	—
Diluted earnings per share	$	(0.01	)	$	—	$	(0.01	)	$	—

Weighted Average Shares Outstanding:
Basic		11,385,903			11,385,903		11,385,903			11,385,903
Diluted		11,385,903			11,385,903		11,385,903			11,385,903

See notes to consolidated financial statements.

F-4

TILDEN ASSOCIATES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30,
	2010			2009
Operating Activities
Net Income (loss)	$	(74,919	)	$	26,068
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization		731			2,595
Provision for doubtful accounts		67,336			66,126
Sale of equipment financed by note receivable		—			27,822
Stock options expense		33,838			748
Changes in operating assets and liabilities
Accounts and notes receivable		(76,710	)		(157,579	)
Prepaid expenses and other current assets		—			3,000
Security deposits receivable		(1	)		(19,000	)
Accounts payable and accrued expenses		(36,265	)		6,756
Deposits on franchise and business acquisitions		(15,000	)		35,000
Income taxes payable		(2,959	)		(1,141	)
Security deposits payable		7,000			(21,950	)
Net cash provided by (used for) operating activities		(96,949	)		(31,555	)

Investing Activities		—			—

Financing Activities		—			—

Net increase (decrease) in cash		(96,949	)		(31,555	)
Cash and cash equivalents at beginning of the period		488,909			504,259

Cash and cash equivalents at end of the period	$	391,960		$	472,704

Supplemental Cash Flow Information:
Interest paid	$	—		$	—
Income Taxes Paid	$	2,679		$	1,141

See notes to consolidated financial statements.

F-5

TILDEN ASSOCIATES, INC and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – Organization and Business Operations

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

NOTE 2 - Interim Financial Statements

The unaudited financial statements as of June 30, 2010 and for the six months ended June 30, 2010 and 2009 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2010 and the results of operations and cash flows for the periods ended June 30, 2010 and 2009. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the six months ended June 30, 2010 is not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending December 31, 2010. The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2009 as included in our report on Form 10-K.

NOTE 3 - Accounts and Notes Receivable

A ccounts and notes receivable consisted of the following:

	June 30,			December 31
	2010			2009
Trade receivables from franchisees	$	737,605		$	639,982
Installment loan due January 1, 2011 with an interest rate of 6%		22,784			25,000
		760,389			664,982
Less allowance for doubtful accounts		(376,099	)		(290,066	)
		384,290			374,916
Less current portion		(384,290	)		(349,916	)
Non-current accounts and notes receivable	$	—		$	25,000

NOTE 4 – Property and Equipment

P roperty and equipment consisted of the following:

	June 30,			December 31,
	2010			2009
Machinery and shop equipment	$	5,704		$	5,704
Signage		5,623			5,623
Furniture		11,693			11,693
		23,020			23,020
Less accumulated depreciation		(23,020	)		(23,020	)
Property and equipment, net of accumulated depreciation	$	—		$	—

D epreciation expense for the six months ended June 30, 2010 and, 2009 was $0 and $1,864, respectively.

F-6

NOTE 5 - Intangible Assets

Intangible assets consisted of the following:

	June 30,			December 31,
	2010			2009
Trademarks	$	45,196		$	45,196
Franchise and market area rights		358,600			358,600
		403,796			403,796
Less accumulated amortization		(123,489	)		(122,758	)
Intangible Assets, net of accumulated amortization	$	280,307		$	281,038

The Company incurred trademark costs of $0 and $1,097 during the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. During the year ended December 31, 2009, the Company reflected a loss on the impairment of franchise and market area rights in the amount of $40,276. The impaired rights had an original cost of $50,345 and accumulated amortization of $10,069. The Company tests the carrying value of franchise and market area rights on a franchise-by-franchise basis and identifies individual franchise rights requiring write-down. Of the intangible assets listed above, only trademarks have been amortized for the six months ended June 30, 2010 and 2009. The amortization expense was $731 and $731, respectively.

NOTE 6 – Credit Line

In August, 2006, the Company secured a $250,000 revolving line of credit with a stated rate of interest of prime plus one percentage point. The line is secured by the assets of the Company. As of June 30, 2010, the Company has not utilized any of the available line of credit.

NOTE 7 – Income Taxes

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

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

	Six Months Ended June 30,
	2010			2009
Federal income tax (benefit) at 35% statutory income tax rate	$	(26,222	)	$	9,124

Nondeductible increase(nontaxable decrease) in allowance for doubtful accounts		30,112			(8,601	)
Change in valuation allowance		(3,890	)		(523	)
Provision for income taxes	$	—		$	—

Net operating loss carryovers at December 31, 2009 were approximately $575,000 and will expire in years from 2010 to 2029. The Company does not anticipate fully utilizing these carryovers in 2010.

F-7

NOTE 8 – Commitments and Contingencies

Leases

The Company, through various subsidiaries, sub-lets properties to several franchisees. Additionally, several franchisees sub-let property from affiliates of the Company’s President (See Note 10). Franchisees typically pay rent on these properties to the subsidiaries. In some circumstances, franchisees may pay rent directly to the lessors of the operating leases. Future minimum lease payments under these operating leases at June 30, 2010 are as follows:

2010		165,587
2011		233,921
2012		200,851
2013 and thereafter		861,046
	$	1,461,405

The Company leases an office in New York under an agreement that commenced in October 2003 and expires in September 2013. Total gross rent expense for the six months ended June 30, 2010 and 2009 was $11,189 and $9,417, respectively.

The future minimum annual rental payments are as follows:

2010		15,250
2011		23,325
2012		24,675
2013		18,675
	$	81,925

Employment Agreements

The President of the Company, Mr. Robert Baskind, has an employment contract that renews annually on the first day of each year and which entitled him to a salary of approximately $171,000 during 2009. In accordance with the terms of the employment contract, he is entitled to five percent increases on a yearly basis. The employment agreement, as amended, expires in 2015. Additionally, Mr. Baskind’s agreement provides for other customary provisions.

NOTE 9 – Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk include cash and accounts and notes receivable. At June 30, 2010 and December 31, 2009, the Company had accounts and notes receivable from franchisees of approximately $384,000 and $375,000, respectively, net of an allowance for doubtful accounts of approximately $376,000 and $290,000, respectively. Notes receivable, derived principally from sales of franchises and market areas, are collateralized by the franchise agreements to which they relate. Presently, a majority of the Company’s franchises are within the states of New York, Florida and Colorado.

NOTE 10 - Related Party Transactions

Franchise Facilities

The Company rents certain Franchise locations owned or leased by the Company’s president and affiliates, which are sublet to Franchisees. For the six months ended June 30, 2010 and 2009, rent paid to the Company’s president and affiliates for real estate sublet was $15,332 and $16,400 respectively. Management believes that the lease payments made by the Company to these officers, directors, and affiliates are at fair market value and are approximately equal to the rent charged to the Franchises occupying each facility.

F-8

NOTE 11 - Stock Options

Tilden Associates, Inc. Stock Option Plans

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

expiration of the option the employee ceases to be employed by the Company, the options granted will terminate 90 days after termination of the employee’s employment with the Company.

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

On July 18, 2006, a derivative action was filed challenging the issuance of stock options by the Company to members of management and the Board of Directors between 2001 and 2005. In August of 2006, the Company rescinded the remaining 6,067,000 stock options issued in the years 2001 to 2005. On September 11, 2006, the action was settled.

On December 22, 2008, the Company granted a total of 1,150,000 stock options (600,000 options to the Company’s chief executive officer, 525,000 options to the Company’s two other directors, and 25,000 options to a Company consultant. The options are exercisable at a price of $0.02 per share and expire in five years.The $7,475 fair value of the options, which was calculated using the Black-Scholes option pricing model using the following assumptions: $0.01 stock price, $0.02 exercise price, 2% risk free interest rate and 100% volatility, was being expensed over the requisite service period of five years beginning January 1, 2009. During the year ended December 31, 2009, the Company recorded compensation expense of $1,122 on the options.

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

At December 31, 2009, total unrecognized compensation costs relating to stock options was $33,838. The Company revised the service period covered by the options from five years to, all currently earned, at June 30, 2010. During the six months ended June 30, 2010, the Company recorded compensation expense of $33,838 on the options. At June 30, 2010 total unrecognized compensation costs relating to stock options was $0.

NOTE 12 – Franchises and Market Area Activities

Franchises

During the six months ended June 30, 2010 and 2009, the Company sold 0 and 1 new franchise, respectively. As of June 30, 2010 and 2009, the Company had 43 and 48 active franchised locations, respectively. Throughout each year several franchises are returned to the Company’s control either through foreclosures or abandonment.

Market Areas

During the six months ended June 30, 2010 and 2009, the Company sold no rights to develop new market areas.

NOTE 13 – Retirement Plan

I n November, 2006, the Company adopted a qualified deferred arrangement 401(k) plan where employees may contribute up to the Internal Revenue Service deferred compensation limit for 401(k) plans, which was $16,500 in 2009. The plan allows the Company to make optional non-elective contributions into the plan for full-time employees. For the six months ended June 30, 2010 and 2009, Company contributions to the plan (which are expensed when incurred) were $0.

F-9

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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

OVERVIEW

T ilden Associates, Inc. (the “Company”) is a Delaware Corporation. Its principal business is to sell automotive franchises and to administer and support full service automotive repair centers carrying its trademarks. The Company’s operations are based at 300 Hempstead Turnpike, West Hempstead, New York, 11552.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2010 vs Three Months Ended June 30, 2009

Revenue decreased to approximately $268,000 in the second quarter of 2010 from approximately $446,000 in the second quarter of 2009, representing a 40% decrease. The decrease in overall revenue was primarily attributed to decreases in sale of Company owned location, rental income, initial franchise acquisition fees and royalty fees of approximately $104,000, $39,000, $20,000 and $14,000, respectively. The decrease in sale of Company owned locations was attributable to the Company’s sale of a previously repossessed location during the second quarter of 2009. The decrease in rental income is attributable to the decrease in locations subleased by the Company to franchisees in the second quarter of 2010 as compared to the second quarter of 2009. The decrease in royalty fees recorded during the second quarter of 2010 compared with the second quarter of 2009 was attributable to 1) an decrease in the number of franchisees liable to the Company for royalty fees and 2) decreased royalty fees remitted per franchise due to decreased sales at several of the Company’s franchised locations during the second quarter of 2010. The decrease in initial franchise fees was attributable to the Company’s sale of no new franchises during the second quarter of 2010 as compared to the sale of one new franchise during the second quarter of 2009. The Company did reflect initial franchise fee revenue of $5,000 during the second quarter of 2010 on the transfer of a location from an existing franchisee to a new franchisee on the sale of the existing franchisee’s location.

Cost of revenues decreased to approximately $138,000 in the second quarter of 2010 from approximately $247,000 in the second quarter of 2009, representing a 44% decrease. As a percentage of revenue, cost of revenues were 52% and 55%, respectively for the periods reported. The overall decrease was primarily attributable to decreases in the cost of Company owned locations sold and rent paid for real estate sublet, of approximately $73,000 and $45,000, respectively. The decrease in cost of Company owned locations sold was a result of the cost incurred in the sale of a Company owned location during the second quarter of 2009 as compared to no sales in the second quarter of 2010. The decrease in rent paid for real estate sublease was a result of a decrease in the number of locations, which the Company sublets to franchisees.

Selling, general and administrative expenses increased to approximately $221,000 in the second quarter of 2010 from approximately $171,000 in the second quarter of 2009, representing a 30% increase. The increase in selling, general and administrative expenses during the second quarter was predominately attributed to increases in compensation and bad debt expense of approximately $47,000 and $9,000, respectively. The increase in compensation was primarily the result of 1) the hiring of an additional employee to work on franchise operations and sales during the first quarter of 2010 and 2) the Company’s change in the service period covered by stock options granted to employees. The increase in bad debt expense was attributable to an increase in more franchisees requiring reserve and write-off in the second quarter of 2010 as compared to the second quarter of 2009. The increases were partially offset by a decrease in professional fees of approximately $6,000. The decrease in professional fees was attributable to the Company’s attempt to curtail overhead costs in the second quarter of 2010 as compared to the second quarter of 2009.

F-10

Six Months Ended June 30, 2010 vs Six Months Ended June 30, 2009

Revenue decreased to approximately $602,000 through the second quarter of 2010 from approximately $742,000 through the second quarter of 2009, representing a 19% decrease. The decrease in overall revenue was primarily attributed to decreases in rental income and royalty fees of approximately $63,000 and $39,000, respectively. The decrease in rental income through the second quarter of 2010 as compared to the same period during 2009 is attributable to the decrease in locations subleased by the Company to franchisees. The decrease in royalty fees recorded through the second quarter of 2010 compared to the same period during 2009 was attributable to 1) an decrease in the number of franchisees liable to the Company for royalty fees and 2) decreased royalty fees remitted per franchise due to decreased sales at several of the Company’s franchised locations during the second quarter of 2010. Through the six months ended June 30, 2010, the Company has been unable to sell a new franchise or market area which it attributes primarily to the continued difficulty for small businesses to obtain credit. Although the Company believes that the auto repair business continues to present opportunities for new locations, it cannot accurately forecast when it will see an increase in sales of new franchises and market areas.

Cost of revenues decreased to approximately $279,000 through the second quarter of 2010 from approximately $366,000 through the second quarter of 2009, representing a 24% decrease. As a percentage of revenue, cost of revenues were 46% and 49%, respectively for the periods reported. The overall decrease was primarily attributable to decreases in the cost of Company owned locations sold and rent paid for real estate sublet, of approximately $53,000 and $54,000, respectively. The decrease in cost of Company owned locations sold was a result of the cost incurred in the sale of a Company owned location through the second quarter of 2009 as compared to no sales during the same comparable period of 2010. The decrease in rent paid for real estate sublease was a result of a decrease in the number of locations, which the Company sublets to franchisees.

Selling, general and administrative expenses increased to approximately $402,000 through the second quarter of 2010 from approximately $355,000 through the second quarter of 2009, representing a 13% increase. The increase in selling, general and administrative expenses through the second quarter was predominately attributed to increases in compensation and settlement costs of approximately $57,000 and $5,000, respectively. The increase in compensation was primarily the result of 1) the hiring of an additional employee to work on franchise operations and sales during the first quarter of 2010 and 2) the Company’s change in the service period covered by stock options granted to employees. With the hiring of the employee the Company increased its number of employees from four to five. The increase in settlement cost which occurred during the first quarter of 2010 was attributable to the settlement of a legal matter relating to a merger and reorganization contemplated by the Company in 2008. The increases were partially offset by decreases in professional fees and consulting of approximately $7,000 and $7,000, respectively. The decreases in professional fees and consulting fees were attributable to the Company’s attempt to curtail overhead costs through the second quarter of 2010 as compared to the same period during 2009.

F-11

LIQUIDITY AND CAPITAL RESOURCES

W orking capital at June 30, 2010 was approximately $363,000, compared to working capital of approximately $371,000 at December 31, 2009. The ratio of current assets to current liabilities was 1.9:1 at June 30, 2010 and 1.8:1 at December 31, 2009. Cash used for operating activities through the second quarter of 2010 and 2009 was approximately $97,000 and $32,000, respectively.

C ash and accounts and notes receivable decreased to approximately $776,000 at June 30, 2010 from approximately $864,000 at December 31, 2009, while accounts payable and accrued expenses decreased to approximately $168,000 at June 30, 2010 from approximately $204,000 at December 31, 2009.

Although the Company plans to continue to expand to the extent that resources are available, the Company has no firm commitments for capital expenditures in other areas of its business. The Company’s current business plan and objective is to continue expanding the number of franchises in its system through sales of new franchises, as well as through acquisitions of other franchise systems or chains similar to the acquisitions they have been able to complete in the past. The Company also remains committed to providing support for its existing franchisees.

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

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

The Company has approximately $363,000 in working capital. The Company believes that its working capital and cash generated by operations will be sufficient to implement its business plan.

The Company has secured a $250,000 line of credit. As of June 30, 2010, the Company has not utilized the line.

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

Critical Accounting Policies:

O ur significant accounting policies are described in Note 1 to the financial statements contained in our annual report on Form 10-K. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The following policies, we believe, are our most critical accounting policies and are explained below.

Use of Estimates

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

Revenue Recognition

The Company recognizes revenue in several ways: Initial fees from sale of franchises, market area sales to market developer partners, royalties (as a percentage of gross revenues) from franchisees, equipment sales, rental of premises to franchisees and the operation of Company owned automotive repair centers which are developed for potential sale to franchisees.

Franchise fee revenue for initial franchise fees and from market area sales to market developer partners is recognized upon the execution of a franchise agreement and when all material services or conditions relating to the sale have been successfully completed by the Company. Market developer partners receive a percentage of royalty fees for development and management of their market and are responsible for substantially all training and other services required in opening new franchises in their regions.

Equipment sales are recorded upon delivery and installation of equipment to franchisees.

F-12

ITEM 3. CONTROLS AND PROCEDURES

a) Evaluations of disclosure controls and procedures.

Based on an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days of the filing date of this quarterly report, the Chairman, Chief Executive Officer and Chief Financial Officer, who is the same person, concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic SEC filings.

b) Changes in internal control.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation.

F-13

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Changes in Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

(a)

Exhibits

99.1 - Certification of the Chief Executive officer and Acting Chief Financial Officer pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)	Reports on Form 8-K

None.

F-14

TILDEN ASSOCIATES, INC. AND SUBSIDIARIES

SIGNATURES

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

Date: August 19, 2010

	TILDEN ASSOCIATES, INC.

	By:	/s/ ROBERT BASKIND
		Robert Baskind
		President and Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the following person on behalf of the Registrant and in the capacity and on the date indicated.

Signatures		Titles	Date

By:	/s/ ROBERT BASKIND	Chairman of the Board, President	Augst 19, 2010
	Robert Baskind	Chief Executive Officer (Principal
		Executive and Financial Officer)