UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

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

For the quarterly period ended: ~~June~~September 30, 2011

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

For the transition period from: _____________ to _____________

Commission File Number: 0-10707

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THERMODYNETICS, INC.

(Exact name of registrant as specified in its charter)

———————

Nevada	06-1042505
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

651 Day Hill Road, Windsor, CT 06095

(Address of Principal Executive Office) (Zip Code)

860-683-2005

(Registrant’s telephone number, including area code)

———————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

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

Large accelerated filer ¨				Accelerated filer ¨
Non-accelerated filer ¨				Smaller reporting company þ
(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at ~~July~~September 1530, 2011
Common stock $.01 Par Value		6,290,306 Shares

INDEX

PART I FINANCIAL INFORMATION	~~PART I FINANCIAL INFORMATION~~
Item 1.	~~Item~~Financial 1.Statements	~~Financial Statements~~2	1
		Consolidated Balance Sheets June 30, 2011 and March 31, 2011	1
	Consolidated Balance Sheets
		Consolidated Statements Of Operations Three Months Ended June 30, 2011 and 2010	2
	September 30, 2011 and March 31, 2011	2
		Consolidated Statements Of Cash Flows Three Months Ended June 30, 2011 and 2010	3
	Consolidated Statements Of Income
		Notes To Consolidated Financial Statements	4
	Three Months Ended September 30, 2011 and 2010	3
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	7
	Consolidated Statements Of Income
	Item 3.	Quantitative and Qualitative Disclosures About Market Risks.	8
	Six Months Ended September 30, 2011 and 2010	4
	Item 4T.	Controls and Procedures.	8
	Consolidated Statements Of Cash Flows
	PART II OTHER INFORMATION
	Six Months Ended September 30, 2011 and 2010	5
	Item 1.	Legal Proceedings.	9
	Notes To Consolidated Financial Statements	6
	Item 1A.	Risk Factors.	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	9
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risks.	11
	Item 3.	Defaults Upon Senior Securities.	10
Item 4T.	Controls and Procedures.	11
	Item 5.	Other Information.	10
PART II OTHER INFORMATION
	Item 6.	Exhibits.	10
Item 1.	Legal Proceedings.	12
	SIGNATURES		11
Item 1A.	Risk Factors.	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	12
Item 3.	Defaults Upon Senior Securities.	12
Item 5.	Other Information.	12
Item 6.	Exhibits.	13
SIGNATURES		14

PART I: FINANCIAL INFORMATION

Item 1.

Financial Statements

THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in 000's)
	June 30,			March 31,
	2011			2011
ASSETS
CURRENT ASSETS
Cash	$	50		$	325
Restricted Cash		460			460
Marketable securities		1,664			1,646
Prepaid expenses and other current assets		49			26
Total current assets		2,223			2,457
PROPERTY, PLANT AND EQUIPMENT, net		1,902			1,935
OTHER ASSETS
Assets Held for Sale		850			850
Other		3			-
Total other assets		853			850
Total Assets	$	4,978		$	5,242
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit	$	870		$	877
Accounts payable		207			179
Accrued expenses and taxes		1,070			1,238
Current portion of long-term debt		1,384			1,416
Total current liabilities		3,531			3,710
LONG-TERM LIABILITIES
Loans to Officers		46			-
Total long-term liabilities		46			-
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per share; authorized 25,000,000 shares		63			61
Additional paid-in capital		7,470			7,455
Accumulated other comprehensive income		307			289
Deficit		(6,439	)		(6,273	)
		1,401			1,532
	$	4,978		$	5,242

THERMODYNETICS, INC. AND SUBSIDIARIES

1CONSOLIDATED BALANCE SHEETS

THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30,
(UNAUDITED)
(in 000's, except earnings per share)
	2011			2010
REVENUES
Rental income	$	72		$	154
OPERATING EXPENSES		207			385
Income (loss) from operations		(135	)		(231	)
OTHER INCOME (EXPENSE)
Other, net		2			-
Interest expense		(33	)		(37	)
Loss on sale of stock		-			(97	)
		(31	)		(134	)
Loss before provision for income taxes		(166	)		(365	)
PROVISION FOR INCOME TAXES		-			-
Net loss		(166	)		(365	)
OTHER COMPREHENSIVE LOSS, net of tax		18			17
Comprehensive loss	$	(148	)	$	(348	)
EARNINGS (LOSS) PER COMMON SHARE	$	(0.03	)	$	(0.08	)

(UNAUDITED)

(in 000's)

	September 30 2011				March 31, 2011

ASSETS
CURRENT ASSETS
Cash	$	100		$	325
Restricted cash		-			460
Marketable securities		1,498			1,646
Prepaid expenses and other current assets		33			26
Total current assets		1,631			2,457

PROPERTY, PLANT AND EQUIPMENT, net		1,870			1,935

OTHER ASSETS
Assets held for sale		850			850
Other		23			-
Total other assets		873			850

	$	4,374		$	5,242

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit	$	862		$	877
Accounts payable		247			179
Accrued expenses and taxes		760			1,238
Current portion of long-term debt		1,352			1,416
Total current liabilities		3,221			3,710

LONG-TERM LIABILITIES
Long-term debt		200			-
Total long-term liabilities		200			-

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' EQUITY
Common stock, par value $.01 per share; authorized 25,000,000 shares		63			61
Additional paid-in capital		7,470			7,455
Accumulated other comprehensive income		135			289
Deficit		(6,715	)		(6,273	)
		953			1,532

	$	4,374		$	5,242

The accompanying notes are an integral part of these consolidated financial statements.

THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(UNAUDITED)
(in 000's)
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(166	)	$	(365	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		33			48
Loss on sale of stock of subsidiary		-			97
Issuance of stock		17
(Increase) decrease in other assets		(3	)
(Increase) decrease in prepaid expenses and other current assets		(23	)		(82	)
Increase (decrease) in accounts payable		28			10
Increase (decrease) in accrued expenses and taxes		(168	)		(555	)
Net cash provided by (used in) operating activities		(282	)		(847	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		-			-
Net cash provided by (used in) investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock		-			1,210
Proceeds from long-term borrowings		46			-
Principal payments on debt and capital lease obligations		(39	)		(33	)
Net cash provided by (used in) financing activities		7			1,177
NET INCREASE (DECREASE) IN CASH		(275	)		330
CASH, beginning of year		785			229
CASH, end of year	$	510		$	559

THERMODYNETICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

(in 000's, except earnings per share)

	2011			2010

REVENUES
Rental income	$	65		$	154

OPERATING EXPENSES		305			319

Loss from operations		(240	)		(165	)

OTHER INCOME (EXPENSE)
Other, net		1			-
Interest expense		(36	)		(39	)
Loss on sale of stock		-			(36	)
		(35	)		(75	)

Loss before provision for income taxes and extraordinary item		(275	)		(240	)

PROVISION FOR INCOME TAXES		-			-

Loss before extraordinary item		(275	)		(240	)

EXTRAORDINARY ITEM - Gain on extinguishment of debt net of taxes of $1,200		-			1,582

Net income (loss)		(275	)		1,342

OTHER COMPREHENSIVE LOSS, net of tax		(172	)		(45	)

Comprehensive income (loss)	$	(447	)	$	1,297

EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM PER COMMON SHARE	$	(0.04	)	$	(0.05	)

EARNINGS (LOSS) PER COMMON SHARE	$	(0.04	)	$	0.29

The accompanying notes are an integral part of these consolidated financial statements.

THERMODYNETICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE SIX MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

(in 000's, except earnings per share)

	2011			2010


REVENUES
Rental income	$	137		$	308

OPERATING EXPENSES		512			704

Loss from operations		(375	)		(396	)

OTHER INCOME (EXPENSE)
Other, net		3			-
Interest expense		(69	)		(76	)
Loss on sale of stock		-			(133	)
		(66	)		(209	)

Loss before provision for income taxes and extraordinary item		(441	)		(605	)

PROVISION FOR INCOME TAXES		-			-

Loss before extraordinary item		(441	)		(605	)

EXTRAORDINARY ITEM - Gain on extinguishment of debt net of taxes of $1,200		-			1,582

Net income (loss)		(441	)		977

OTHER COMPREHENSIVE LOSS, net of tax		(154	)		(28	)

Comprehensive income (loss)	$	(595	)	$	949

EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM PER COMMON SHARE	$	(0.07	)	$	(0.13	)

EARNINGS (LOSS) PER COMMON SHARE	$	(0.07	)	$	0.21

The accompanying notes are an integral part of these consolidated financial statements.

THERMODYNETICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30,

(UNAUDITED)

(in 000's)

	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(441	)	$	977
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		67			96
Loss on sale of stock of affiliate		-			97
Realized loss on investment in unaffiliated company		-			36
Gain on extinguishment of debt		-			(1,582	)
Issuance of stock		17			-
(Increase) decrease in other assets		(23	)		-
(Increase) decrease in prepaid expenses and other current assets		(7	)		(2	)
Increase (decrease) in accounts payable		68			(38	)
Increase (decrease) in accrued expenses and taxes		(478	)		(447	)
Net cash provided by (used in) operating activities		(797	)		(863	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		(2	)		(1	)
Purchases of marketable securities		(7	)		-
Net cash provided by (used in) investing activities		(9	)		(1	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock		-			1,210
Proceeds from long-term borrowings		200			-
Principal payments on debt		(79	)		(117	)
Net cash provided by (used in) financing activities		121			1,093

NET INCREASE (DECREASE) IN CASH		(685	)		229

CASH, beginning of year		785			229

CASH, end of year	$	100		$	458

The accompanying notes are an integral part of these consolidated financial statements.

THERMODYNETICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(UNAUDITED)

NOTE 1: BASIS OF PRESENTATION

The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The results of operations for the three and six months ended ~~June~~September 30, 2011 are not necessarily indicative of the results to be expected for the full year.

NOTE 2: GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has sustained substantial operating losses in recent years, has used substantial amounts of working capital in its operations and at ~~June~~September 30, 2011, current liabilities exceed current assets by approximately $1,~~308~~591,000. The Company is currently in default on their line of credit and its long-term mortgages, yet at ~~June~~September 30, 2011, the Company is current on both primary mortgages for each of the buildings, and is current on its interest payments against the line of credit. Rental income from the commercial buildings is now collected by the Bank and those proceeds are utilized for the principal and interest payments on the mortgages, with all remaining cash utilized to pay principal and interest on the line of credit. During June, 2010, the bank commenced two legal proceedings (Note 9). Certain of the Company’s assets are being offered for sale which, upon consummation of a successful sale, would be expected to cure the defaults; no assurance can be given that successful sales can be accomplished.

In view of these matters, realization of a major portion of the assets in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon curing defaults, satisfying current liabilities and the success of future operations. Management believes that actions presently being taken, along with management’s future plans to raise cash through the sale of ~~other~~ long-term assets, provide the opportunity for the Company to continue as a going concern.

NOTE 3: INVESTMENT IN TURBOTEC PRODUCTS, PLC

The Company’s investment in Turbotec Products Plc, (the “PLC”), is carried at market value at ~~June~~September 30, 2011 and is included in marketable securities on the balance sheet~~, as the Company no longer has significant influence~~. The Company currently holds a 21.18% investment in the PLC.

Included in rental income on the income statement is ~~approximately~~ $72137,000 and $~~137~~279,000 from the PLC, for the ~~three~~six months ended ~~June~~September 30, 2011 and 2010, respectively. Additionally, included in receivables on the balance sheet are net amounts from the PLC which ~~represents~~represent pass-through rent amounts. The balances are ~~approximately~~ $3642,000 and $42,000 at ~~June~~September 30, 2011 and 2010 respectively.

NOTE 4: COMMERCIAL LEASES

The Company and Turbotec Products, Inc. entered into a ~~new~~ real estate lease that expires December 31, 2012 for approximately 52,500 square feet at 651 Day Hill Road, Windsor, CT. ~~The lease expires December 31, 2011.~~ Rent charges ~~with respect to the 651 Day Hill Road property~~ are equal to five dollars per square foot triple net; monthly rent equals $21,875 plus triple net expenses. Turbotec is in the process of relocating its operations to North Carolina and plans to complete the move by December 31, 2012.

NOTE 5: EARNINGS PER SHARE

Earnings per share for the three and six month periods ended ~~June~~September 30, 2011 and ~~June 30,~~ 2010 have been computed based on the weighted average of outstanding shares during the periods.

The weighted average numbers of shares outstanding used in the calculations are:

		Three Months Ended June 30,
	Three Months Ended September 30,					Six Months Ended September 30,
	2011		~~2011~~	2010		~~2010~~2011	2010
Weighted Average Shares Outstanding-Basic &Diluted		6,187,589			4,600,306
Weighted Average Shares Outstanding-Basic & Diluted	6,290,306		4,600,306			6,238,947	4,600,306

NOTE 6: CASH FLOW INFORMATION AND NON CASH INVESTING ACTIVITIES

The following supplemental information is disclosed pursuant to the requirements of ASC 230-10.

	Three Months Ended June 30
	Six Months Ended September 30
	(in 000's)
	2011		~~2010~~	2010
Cash payments for interest	$	3367	$	37$	77

NOTE 7: LINE OF CREDIT

The Company’s $1.1 million line of credit matured on July 31, 2009 and is due in full; the Company is currently in default. The Company has continued to pay interest under the terms of the line of credit through ~~June~~September 30, 2011.

On June 28, 2010 the Bank commenced legal action. See Notes 2 and 9 for further discussion.

NOTE 8: ~~SUBSEQUENT~~DISTRIBUTION ~~EVENTS~~OF SUBSIDIARY STOCK

~~Distribution~~Thermodynetics distributed a dividend to shareholders of ~~Subsidiary~~record ~~Stock~~on July 15, 2011 in a spin-off transaction, with the distribution effected on or about August 5, 2011. The dividend was distributed to shareholders who, on the record date, were owners of at least 1,000 shares of Thermodynetics common stock; they received shares of TPI Systems, Inc. ("TPI") on a one-for-one (1:1) pro rata basis. All other Thermodynetics shareholders, being those holding less than 1,000 shares of Thermodynetics, received a distribution of $0.0002 per share for each of the shares, pro rata, they owned of Thermodynetics as of the record date. There is no effect on any holdings in Thermodynetics.

The ~~Board~~parent ofowns Directors of Thermodynetics has approved the distribution of a dividend to shareholders of record on July 15, 2011 in a spin-off transaction, with the distribution effected on or about August 5, 2011. The dividend was distributed to shareholders who, on the record date, were owners of at least 1,000 ~~shares of Thermodynetics common stock; they received shares of TPI Systems~~, ~~Inc. ("TPI") on a one-for-one (1:1) pro rata basis. All other Thermodynetics shareholders, being those holding less than 1,~~000 shares of ~~Thermodynetics,~~TPI ~~received~~and ais ~~distribution~~in ~~of $0.0002 per share for each of~~ the ~~shares,~~process ~~pro rata, they owned~~ of ~~Thermodynetics~~issuing asadditional ofshares ~~the~~to ~~record~~increase ~~date.~~its ~~There~~ownership isto noapproximately ~~effect on any holdings in Thermodynetics~~16%.

The parent owns 1,000,000 shares of TPI.

NOTE 9: LEGAL PROCEEDINGS

There are no material legal proceedings known or threatened against the Company, except:

a) The lawsuit instituted by the Company on January 8, 2008 in England against Turbotec Products Plc was concluded in February, 2010. A judgment in favor of the Company on one count and against it on two counts was rendered on May 10th, 2010. The net effect of the London judgment held that the Company was required to reimburse the PLC for 85% of the PLC’s legal expenses which was negotiated to a sum of £560,000, and that amount has been paid; £350,000 was paid in May 2010, and £210,000 was paid in July 2011.7

5a) The lawsuit instituted by the Company on January 8, 2008 in England against Turbotec Products Plc was concluded in February 2010. A judgment in favor of the Company on one count and against it on two counts was rendered on May 10th, 2010. The net effect of the London judgment held that the Company was required to reimburse the PLC for a portion of the PLC’s legal expenses which was negotiated to a sum of £560,000, and that amount has been paid; £350,000 was paid in May 2010, and £210,000 was paid in July 2011.

Turbotec Products, Inc. commenced a lawsuit against Thermodynetics on February 27th, 2008 in the Connecticut Superior Court, Judicial District of Hartford. The parties settled the lawsuit and on January 10th, 2011 mutual releases were exchanged, and the lawsuit was dismissed without any financial obligation owed to either party.

c) The Company's bank initiated and served two separate lawsuits on June 28th, 2010 against the Company in the Connecticut Superior Court, Judicial District of Hartford, alleging defaults of a line of credit and certain mortgages and seeking recovery through foreclosure of the liens against the two commercial buildings. Negative outcomes in either of such proceedings will have a material adverse effect upon the Company. At ~~June~~September ~~30th~~30, 2011, the Company was current on both primary mortgages and was current on its interest payments against the line of credit which had matured in 2009. The default initially was against the line of credit which has not been repaid and the bank has claimed a cross-default against the mortgages. The Company believes there is material equity in the buildings exceeding the value of all of the bank debt. The current balance due under the line of credit and mortgages equals approximately $2.2522 million at ~~June~~September 30, 2011; the Bank is claiming such balance plus costs and legal expenses of the proceeding. In the event the bank is successful in its foreclosure proceedings and a qualified buyer for the properties is not secured, the loss to the Company could exceed the amounts due under the line of credit and mortgages. However, in the event of a strict foreclosure, under Connecticut foreclosure law, a court would apply a fair market value to the properties and buildings based upon a then to be appraised value as of the date title vested in the bank; therefore, the likely risk of loss to the Company would be the loss of the land and buildings but not further financial deficiency claims. Both properties are currently listed for sale with a commercial real estate broker, and management would also consider any long-term lease opportunities. A trial date is set for June 12, 2012.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations.

~~2011~~Fiscal 2012 Compared to ~~2010~~2011

~~Income in both quarters ended June 30, 2010 and 2011 resulted from rental income. Our smaller building has been vacant since April 1, 2011.~~ The ~~tenant~~Company ~~for the main building~~ is ~~now~~engaged ~~occupying~~in ~~the~~managing ~~building~~its ~~under~~real aestate ~~lease~~and ~~that~~investing ~~terminates~~in ~~December~~other ~~31, 2011; it is not expected that they will renew their lease~~companies. ~~Both buildings are being marketed for sale.~~

~~The~~Income ~~Company~~in isboth ~~engaged~~the inthree ~~managing~~months ~~its~~and ~~real~~six ~~estate~~months ~~and~~ended ~~business~~September ~~holdings~~30, 2010 and ~~investing~~2011 inresulted ~~other~~from ~~companies~~rental income. In Our ~~June~~smaller building has been vacant since April 1, 2011. The tenant for the ~~Company~~main ~~acquired~~building is leasing that building under a lease that was to terminate on December 31, 2011 but the ~~rights~~lease has been extended to aDecember ~~software~~31, ~~program~~2012; the extension contains certain termination clauses that iswill require the tenant to bevacate ~~marketed~~within in75 days of the ~~wagering~~notice ~~industry. The~~to ~~software~~terminate isshould ~~designed~~the tobuilding ~~assist~~be ~~individuals~~sold inearlier ~~selecting~~than ~~winning~~the ~~wagers~~lease interm. Both ~~horse~~buildings ~~racing~~are ~~events~~being marketed for sale.

~~During~~In ~~the~~June ~~first~~2011 ~~and third quarters ended of~~ the ~~2011~~Company ~~fiscal~~acquired ~~year,~~ the ~~Company~~rights ~~disposed~~to of a ~~portion~~software ofprogram ~~its holdings in Turbotec and now owns approximately 21% of~~ that ~~company. Net~~is ~~proceeds of approximately $1.67 million was received and used primarily~~ to ~~pay~~be ~~litigation~~marketed ~~costs. In~~in ~~addition,~~ the ~~Company~~wagering ~~made adjustments to its investment portfolio and both purchased and sold securities~~industry. AsThe asoftware ~~result~~is ofdesigned ~~the~~to ~~sale~~assist ofindividuals ~~the~~in ~~Turbotec~~selecting ~~securities,~~winning ~~the~~wagers ~~Company~~in ~~has~~horse ~~classified~~racing ~~its holdings as marketable securities as the Company does not have any significant influence over that entity~~events.

~~The~~During the first and third quarters of the 2011 fiscal year, the Company ~~recorded~~disposed of a ~~loss~~portion inof ~~both~~its ~~fiscal~~holdings ~~2010~~in Turbotec and ~~2011~~now owns approximately 21% of that company. ~~Operating~~Net ~~expenses~~proceeds ~~decreased~~of inapproximately ~~fiscal~~$1.67 ~~2011~~million ~~largely~~was ~~reflecting~~received aand ~~reduction~~used inprimarily to pay litigation costs, as well as certain operating costs. In addition, the Company made adjustments to its investment portfolio and both purchased and sold securities.

InThe ~~August 2011, the~~ Company ~~issued~~recorded a ~~dividend~~loss ~~consisting~~in ofboth afiscal ~~cash~~2011 ~~payment~~ and a2012 ~~stock~~for ~~dividend~~both ofthe ~~its~~three ~~previously~~and ~~100%~~six ~~owned~~months ~~subsidiary,~~periods ~~TPI~~ended ~~Systems,~~September ~~Inc~~30. AOperating ~~cash~~expenses ~~distribution~~decreased ~~was~~in ~~issued~~fiscal ~~to Thermodynetics shareholders who owned less than 1,000 shares of Thermodynetics on the July 15,~~ 2011 ~~record~~largely ~~date~~reflecting ~~and~~ a ~~share~~reduction ~~for share distribution of TPI Systems to all other shareholders of Thermodynetics was effected~~ in ~~August~~litigation costs.

~~2010~~The ~~Compared~~Company’s bank is attempting to ~~2009~~foreclose on the two mortgages and the Company intends to assert its defenses; the Company is attempting to sell the buildings at realistic prices in today’s market.

In August 2011, the Company issued a dividend consisting of a cash payment and a stock dividend of its previously 100% owned subsidiary, TPI Systems, Inc. A cash distribution was issued to Thermodynetics shareholders who owned less than 1,000 shares of Thermodynetics on the July 15, 2011 record date and a one share for one share distribution of TPI Systems to all other shareholders of Thermodynetics. The holdings of the Company are being adjusted to reflect that after the dividend distribution, the Company will own approximately 16% of TPI.

Fiscal 2011 Compared to 2010

The Company is engaged in managing its real estate and business holdings, offering consulting services to, and investing in, other companies. The Company competes with other companies which have been established for a longer period of time, are larger, and possess substantially greater financial resources and substantially larger staffs. No assurances can be given that the Company will be able to successfully compete with such firms.

~~Income~~The ~~resulted~~London ~~from~~trial ~~rental~~severely ~~income~~impacted inthe ~~fiscal~~cash ~~2010~~resources of the Company and as a result it was decided to sell a portion of the holdings of the Company.

Operating expenses increased in 2010 vs. 2009 reflecting primarily the legal costs involved in the litigation regarding the interpretation of the relationship agreement that was required to consummate the London IPO of Turbotec in May 2006.9

~~The~~During ~~Company~~the ~~recorded~~latest asix ~~loss~~month inperiod, ~~fiscal~~the ~~2009~~Company ~~primarily~~disposed asof aslightly ~~result~~more than 26% of ~~increased~~its ~~operating~~stockholdings ~~expenses~~in ~~and~~Turbotec ~~the~~Products ~~reduced~~Plc ~~equity~~reducing inits ~~the~~holdings ~~earnings~~to ofbelow ~~the~~30%. That ~~PLC,~~transaction ~~partially~~followed ~~offset~~an byunexpected decision from the ~~sale~~London oftrial ~~the~~which ~~stock~~decision ofawarded ancosts ~~unaffiliated~~to ~~company.~~Turbotec ~~The~~and ~~loss~~which inpreliminary ~~2010~~amount was ~~caused~~paid ~~primarily~~from bythe ~~litigation~~proceeds ~~expenses~~of the stock sale. Other pressing and ~~the~~overdue ~~normal~~payables ~~operating~~were ~~expenses~~also ofpaid from the ~~Company~~sale proceeds.

7Rental income is expected to materially decline unless new tenants are secured. Rental income for the smaller of the two buildings owned by the Company was consistent with prior periods, but going forward, one tenant has vacated its leased space as of September 30, 2010 and the other tenant plans to vacate upon the lease termination on March 31, 2011. The Company expects to extend the lease for the larger building with the tenant and negotiations are currently being conducted. The two properties are being marketed for sale or lease.

~~Rental~~The ~~income~~Company's ~~derives~~bank ~~from~~began foreclosure proceedings in June 2010 as the ~~two~~line ~~buildings~~of ~~located~~credit inhad ~~Windsor,~~not CTbeen ~~that~~repaid after ~~were~~it ~~rented~~matured in July 2009. Discussions with the ~~years~~bank ~~ended~~were held in August 2010 and ~~2009.~~it ~~The~~is ~~current~~anticipated ~~tenants~~that ~~are~~a ~~not~~resolution ~~expected~~without foreclosure may result to ~~renew~~allow ~~their~~the ~~leases~~buildings ~~and~~securing the ~~properties~~obligations ~~are~~to ~~being~~be ~~offered~~sold ~~for~~and ~~sale~~thereby orrepay ~~rent,~~the ~~although~~bank all sums due. The Company believes there ~~can~~is bematerial noequity ~~assurance~~value ~~that~~in athe ~~sale~~buildings orexceeding ~~rental~~the ~~will~~value beof ~~consummated,~~all ~~nor~~of ifthe itbank isdebt. Both ~~able~~buildings toare docurrently ~~so,~~listed ~~the~~for ~~financial~~sale ~~effect~~with ofa ~~such~~commercial ~~transactions,~~real ifestate ~~any~~broker.

Liquidity.

The Company’s working capital position was negative at ~~June~~September 30, 2010 and 2011. It is anticipated that future working capital will be generated by the sale of assets and through ~~rents~~rental of its larger building, although no assurance can be given that these efforts will be successful.

At July 13, 2009, the Company’s line of credit was due to be repaid and the lender has initiated foreclosure proceedings.

Cash was generated from short term borrowings and the sale of assets as well as from rents received.

The Company anticipates collection of rents to be applied against its defaulted bank loans, through December 31, ~~2011~~2012. The ~~Company~~rental ~~currently~~payments ~~does~~applied ~~not~~against ~~have~~the ~~any~~mortgages ~~existing~~are ~~prospects~~adequate to ~~lease~~meet ~~its~~the ~~facilities~~original inpayment ~~2012~~requirements of principal and interest; the excess is being applied by the bank to pay the interest due on the line of credit and also to reduce the principal owed on the mortgages.

FORWARD LOOKING STATEMENTS

This report contains certain forward-looking statements regarding the Company, its business prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause the Company’s actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: the Company’s ability to successfully and timely develop and finance new projects, the impact of competition on the Company’s revenues, the real estate market in Connecticut, and the economy as it relates to companies seeking and able to pay for consulting services.

When used, words such as "believes," "anticipates," "expects," "continue", "may", "plan", "predict", "should", "will", "intends" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by the Company in this report, news releases, and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect the Company’s business.

Item 3.

Quantitative and Qualitative Disclosures About Market Risks.

Not required by smaller reporting companies.

Item 4T.

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures -

The Company’s principal executive and principal financial officers believe, based on their evaluation, that as of the end of the period covered by this report the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) were effective such that the material information required to be disclosed by the Company in reports that it files or submits under the Exchange Act within the specified time periods under the Exchange Act and such information is: (i) recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, and (ii) accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding disclosure.

(b) Changes in Internal Controls -

There were no changes made and no corrective actions taken during the quarter ended for this report with respect to the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect the Company's internal control over its financial reporting, except the utilization of the equity method of accounting in the restated financial statements.

811

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

There are no material legal proceedings known or threatened against the Company, except:

(a) The lawsuit instituted by the Company on January 8, 2008 in England against Turbotec Products Plc was concluded in February, 2010. A judgment in favor of the Company on one count and against it on two counts was rendered on May 10th, 2010. The net effect of the London judgment held that the Company was required to reimburse the PLC for 85% of the PLC’s legal expenses was negotiated to a sum of £560,000, and that amount has been paid; £350,000 was paid in May 2010, and £210,000 was paid in July 2011.

(b) Turbotec Products, Inc. commenced a lawsuit against Thermodynetics on February 27th, 2008 in the Connecticut Superior Court, Judicial District of Hartford. The parties settled the lawsuit and on January 10th, 2011 mutual releases were exchanged, and the lawsuit was dismissed without any financial obligation owed to either party.

(c) The Company's bank initiated and served two separate lawsuits on June 28th, 2010 against the Company in the Connecticut Superior Court, Judicial District of Hartford, alleging defaults of a line of credit and certain mortgages and seeking recovery through foreclosure of the liens against the two commercial buildings. Negative outcomes in either of such proceedings will have a material adverse effect upon the Company. At June 30th, 2011, the Company was current on both primary mortgages and was current on its interest payments against the line of credit which had matured in 2009. The default initially was against the line of credit which has not been repaid and the bank has claimed a cross-default against the mortgages. The Company believes there is material equity in the buildings exceeding the value of all of the bank debt. The current balance due under the line of credit and mortgages equals approximately $2.2522 million at ~~June~~September 30, 2011; the Bank is claiming such balance plus costs and legal expenses of the proceeding. In the event the bank is successful in its foreclosure proceedings and a qualified buyer for the properties is not secured, the loss to the Company could exceed the amounts due under the line of credit and mortgages. However, in the event of a strict foreclosure, under Connecticut foreclosure law, a court would apply a fair market value to the properties and buildings based upon a then to be appraised value as of the date title vested in the bank; therefore, the likely risk of loss to the Company would be the loss of the land and buildings but not further financial deficiency claims. Both properties are currently listed for sale with a commercial real estate broker, and management would also consider any long-term lease opportunities. A trial date is set for June 12, 2012.

Item 1A.

Risk Factors.

Not Applicable.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities of the Company during the three-month period covered by this Form 10-Q report~~, other than: (a) on June 15, 2011 the Company issued 100,000 shares of its common stock to attorney Kenneth B~~. Lerman in exchange for certain legal services. Attorney Kenneth B. Lerman is the son of the president of the Company. The exemption from the registration requirements of Section 5 of the Securities Act of 1933 claimed was under §4(2) of the Act not involving a public offering, and (b) on June 9, 2011 the Company purchased from a third party the software known as Base 5 Factor along with the intellectual property rights for 25,000 shares of the Company’s common stock. The chairman of the Company, John F. Ferraro, was a participant in such transaction and conveyed his interest in said software but did not receive any direct remuneration from the Company. The exemption from the registration requirements of Section 5 of the Securities Act of 1933 claimed was under §4(2) of the Act not involving a public offering.

Item 3.

Defaults Upon Senior Securities.

There were no material defaults of any terms of the securities or indebtedness of the Company or any of its significant subsidiaries during the three-month period covered by this Form 10-Q report, except that the Company’s $1.1 million line of credit matured on July 31, 2009 and is due in full. The Company's bank initiated and served two separate lawsuits on June 28, 2010 against the Company alleging defaults of the line of credit and certain mortgages; see Item 1(c).

Item 5.

Other Information.

None

Item 6.

Exhibits.

(a) Exhibits:

Rule 13a-14(a)/15d-14(a) Certifications:

Exhbit 31(a)

Certification of Chief Executive Officer.

Exhbit 31(b)

Certification of Chief Financial Officer.

Section 1350 Certifications:

Exhbit 32(a)

Certification of Chief Executive Officer.

Exhbit 32(b)

Certification of Chief Financial Officer.

10· 101.INS** XBRL Instance

101.SCH**

XBRL Taxonomy Extension Schema

101.CAL**

XBRL Taxonomy Extension Calculation

101.DEF**

XBRL Taxonomy Extension Definition

101.LAB**

XBRL Taxonomy Extension Labels

101.PRE**

XBRL Taxonomy Extension Presentation

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

		THERMODYNETICS, INC.
Date: August 11, 2011	By:	/s/ Robert A. Lerman
Date: November 14, 2011	By:	/s/ Robert A. Lerman
		Robert A. Lerman
		President and Chief Executive Officer
Date: August 11, 2011	By:	/s/ John F. Ferraro
Date: November 14, 2011	By:	/s/ John F. Ferraro
		John F. Ferraro
		Treasurer and Chief Financial Officer

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