Caution About Forward-Looking Statements

This Form 10-Q includes "forward-looking" statements about future financial results, future business changes and other events that have not yet occurred. For example, statements like Tedom Capital, Inc. (referred to as "Tedom" "our" "we" or "us") "expects," "anticipates" or "believes" are forward-looking statements. Investors should be aware that actual results may differ materially from Tedom's expressed expectations because of risks and uncertainties about the future. Tedom does not undertake to update the information in this Form 10-Q if any forward-looking statement later turns out to be inaccurate. Details about risks affecting various aspects of Tedom's business are discussed throughout this Form 10-Q and should be considered carefully.

Critical Accounting Policies

The discussion and analysis of our financial conditions and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires managers to make estimates, including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates. We believe that the following critical accounting policies affect our more significant judgments and estimates in the preparation of our financial statements.

Revenue Recognition

Interest income on our loans accrues by the effective interest method. Interest revenue will generally be suspended when a loan is impaired or non-performing. A loan will be considered non-performing when the payment of principal or interest is 120 days past due. A loan will be deemed impaired when, based on current information and events; it is probable that we will be unable to collect all amounts due according to the terms of the loan. We will not hold loans for resale, prepare loan documents or service any loans, but will assign impaired loans to a collection agency. As a result, there will be no revenues from loan fees, collection fees or similar charges.

Loan Loss Reserves

When deemed necessary, we will establish a reserve for possible credit losses on loans. Additions to the reserve are based on an assessment of certain factors including, but not limited to, estimated future losses on the loans and general economic conditions. Actual losses on loans will be recorded as a charge-off or reduction of the loan loss reserve. Subsequent recoveries of loan amounts previously charged off will be recorded as an increase to the loan loss reserve.

Value of Stock Issued for Services

We may issue shares of our common stock in exchange for, or in settlement of, services. Our management values the shares issued in such transactions at either the then market price of our common stock (if a reliable trading market exists) or as determined by the Board of Directors and after taking into consideration factors such as volume of shares issued or trading restrictions, or the value of the services rendered, whichever is more readily determinable.

Business Operations Overview

Loan and Portfolio Summary

As of September 30, 2009, our loan portfolio consisted of two unsecured loans in
the initial aggregate principal amount of $13,491. Our loans are intended to be
used for home improvements and are generally categorized as either secured by a
deed of trust or unsecured.

The following table provides summary information as to our loan portfolio at
September 30, 2009.

                                                          weighted                weighted
                                                          average                 averageof
                       aggregate                 range of    or       range of    remaining
type of     number      balance        % of      interest interst  remaining term   terms
loan      outstanding outstanding loan portfolio  rates    rates      (years)      (years)
Mortgage
Loans         -0-         -0-          -0-         -0-      -0-         -0-          -0-
Unsecured      2                                  10% -
Loans                   $9,348         100%       10.7%    10.6%     3.6 - 4.6       5.2

TOTAL          2        $9,348       100.00%      10% -    10.6%     3.6 - 4.6       5.2
                                                  10.7%

No security is available on the unsecured loans.

As of September 30, 2009, we have invested in loans to improve real property located in Southern California. As a result of this geographical concentration of our mortgage portfolio, a further downturn in the local real estate markets in California could have a material adverse effect on us. The following table lists the geographic location of the home improvement projects currently funded, number of loans, aggregate balance outstanding and percentage of loan portfolio represented in each state as of September 30, 2009.

                               number of       aggregate balance       % of loan
        state                    loans            outstanding          portfolio
        Northern California             0     $                 0
        Southern California             2     $             9,348             100

        TOTAL                           2     $             9,348            100%

As of September 30, 2009, we had no loans that were non-performing.

Results of Operations

Three-Month Periods Ended September 30, 2009 and 2008

During the three months ended September 30, 2009 we recognized a total of $317 of interest income as compared to $334 during the three months ended September 30, 2008. During each period we had two loans outstanding. We made no new loans during the quarter and the aggregate principal balance of our outstanding loans as of September 30, 2009 was $9,348. Interest rates ranged from 10% to 10.7% per annum. None of the loans outstanding were in arrears or non-performing.

General and administrative expenses amounted to $28,464 for the three months ended September 30, 2009 consisting primarily of $23,511 of professional fees related to the preparation of our annual report on Form 10-K for the fiscal year ended June 30, 2009, $3,000 of consulting fees paid to our officers and $900 of licenses and permit fees. General and administrative expenses amounted to $37,222 for the three months ended September 30, 2008 consisting primarily of $28,069 of professional fees related to our Form10-K filing, $3,000 of consulting fees paid to our officers and $900 of licenses and permit fees.

We incurred a net operating loss of $28,947 for the three months ended September 30, 2009 as compared to $37,688 for the three months ended September 30, 2008. The net operating loss incurred for the quarter ended September 30, 2008, is the result of significant general and administrative expenses relating to the preparation of our registration statement on Form SB-2 and limited revenues.

Liquidity and Capital Resources

We have incurred losses since we began operating our business and, as of September 30, 2009, we had an accumulated deficit of $197,429. As of September 30, 2009 we had cash of $2,409 and working capital deficit of $27,263.

At this point, the $107,725 in gross proceeds received from the issuance of shares in our registered public offering has been exhausted and there are currently no plans to issue any of the 1,569,180 shares that remain available in that offering., We secured a $150,000 line of credit in July 2008 in order to increase our available capital to make additional home improvement loans and fund day-to-day operations. As of September 30, 2009, there was no amount due under that line of credit agreement.

Our loan commitments will increase to the extent that there are future increases in our loan portfolio. Revenues from the repayment of loans (in the form of interest income and principal repayment) would be expected to increase in proportion to the number and size of the loans we may make. However, until interest income is sufficient to cover our operating expenses, we will be dependent on our line of credit and/or future debt or equity investments to sustain our operations and implement our business plan. If our line of credit is curtailed, or if we are unable to raise sufficient capital from other sources, we will be required to delay or forego some portion of our business plan, which would have a material adverse affect on our anticipated results from operations and financial condition. There is no assurance that we will be able to maintain the necessary amounts of capital or that our estimates of future capital requirements will prove to be accurate. As of September 30, 2009, our only committed source of additional capital was the line of credit. Even with our line of credit, and any additional sources of capital we may obtain, outside financing may not be available in the amounts and/or at the times when we require them or on terms favorable to us or our stockholders. Furthermore, such additional financing would likely take the form of bank loans, private placement of debt or equity securities or some combination of those sources. The issuance of additional equity securities would dilute the stock ownership of our current investors while incurring loans, additional lines of credit or other debt would increase our capital requirements with possible loss of valuable assets if those debts were not repaid in accordance with their terms.

Recent Financing Transactions

Since inception, we have been funded through outside capital investments.

The valuation of our common stock in both private sales and our initial public offering in early 2008 were the fair value as determined by the Board of Directors. We did not obtain contemporaneous valuations by an unrelated valuation specialist because, at the times of the issuances of stock, our efforts were focused on establishing our business and the financial resources for doing so were limited.

Determining the fair value of our stock in the early stage of our business and prior to commencing quotation on the OTC Bulletin Board in September, 2008 required various subjective judgments. While we did not utilize any specific methodology, we considered various significant factors in valuing these shares which included the early development of our lending business, Tedom's net worth, the prospects for our business, the general condition of the housing market, the restricted nature of the shares being issued and the limited sources of capital available to us. The valuations of the private transactions were also influenced by arms-length negotiations between our Board of Directors and the unrelated investors. While the Board of Directors used its best judgment in evaluating these factors, there is inherent uncertainty in any such valuation.

During July 2009, we borrowed $20,000 from Ameris, LLC (the "Lender"), as evidenced by an unsecured $20,000 Convertible 10% Promissory Note (the "Note") issued to the Lender. The Note is due and payable on July 15, 2010 (the "Maturity Date"); provided, however, that if we complete a registered public offering prior to the Maturity Date: (i) we have the right to prepay (without penalty) all or any portion of the Note out of the proceeds of the registered public offering and (ii) the Lender has the right (but not obligation) to demand immediate payment of the entire amount of the Note out of the proceeds of the registered public offering. At September 30, 2009 the principal and interest due under the Note was $20,000 and $422, respectively. At any time prior to the Maturity Date, the Lender has the right to convert all or any part of the principal and/or accrued interest of the Note into shares of the Company's $0.001 par value common stock at the rate of $0.15 per share. As of September 30, 2009, the Note and accrued interest could potentially be converted into 136,146 shares of our common stock.

Off-Balance Sheet Arrangements

Since our inception through September 30, 2009, we have not engaged in any off-balance sheet arrangements as defined in Item 303 of the SEC's Regulation S-K.