Restatement

3 Months Ended

Mar. 31, 2012

Restatement and Selected Quarterly Financial Data Disclosure [Abstract]

Restatement and Selected Quarterly Financial Data Disclosure [Text Block]

Note 3: Restatement

The unaudited quarterly financial information for the quarterly periods ended March 31, 2011, June 30, 2011 and September 30, 2011 have been restated to correct errors in the valuation of the Company’s derivative liabilities and accounting for certain financing transactions in those periods. These errors in the Company’s financing transactions were caused by the Company incorrectly accounting for the amendment of its CASTion Notes and its 2010 Bridge Notes as a debt modification instead of a debt extinguishment in the first quarter of 2011. The errors in the Company’s derivative liabilities were due to deficiencies in the Company’s valuation model and methodology used to calculate the fair value of such liabilities in the first three quarters of 2011.

The Company restated the effects of these errors for the affected periods in its Annual Report on Form 10-K as of and for the year ended December 31, 2011. The net effect of these errors is (i) a $4.7 million understatement of the Company’s net loss to common stockholders in the quarter ended March 31, 2011, (ii) a $1.5 million overstatement of the Company’s net loss to common stockholders in the quarter ended June 30, 2011 and (iii) a $3.9 million overstatement of the Company’s net loss to common stockholders in the quarter ended September 30, 2011. The net effect is that the Company’s net loss to common stockholders for the nine-month period ended September 30, 2011 was overstated by approximately $0.7 million. None of the errors related to the Company’s cash position, revenues or loss from operations for any of the periods in which such errors occurred.

This Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 includes the impact of this restatement on the applicable unaudited quarterly financial information for the three months ended March 31, 2011 presented in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows. In addition, the Company’s future Quarterly Reports on Form 10-Q for subsequent periods in 2011 will include restated quarter and year to date financial information.

Previously filed Quarterly Reports on Form 10-Q for each of the first three quarters of 2011 have not been and will not be amended. The financial statements included in such reports should not be relied on.

The impact of the errors on the Company’s Consolidated Statement of Operations for the three months ended March 31, 2011 is summarized below (in thousands):

	(Unaudited) Three Months Ended March 31, 2011
	As Originally Reported			As Restated
Loss from operations	$	(2,011	)	$	(2,011	)
Other income (expense):
Loss on extinguishment of debt		—			(7,245	)
Derivative liability income		1,017			2,703
Equity in losses of joint venture		(87	)		(87	)
Interest and other expense, net		(1,461	)		(694	)
Net loss		(2,542	)		(7,334	)
Net loss attributable to noncontrolling interest		13			13
Net loss attributable to ThermoEnergy Corporation		(2,529	)		(7,321	)
Deemed dividend on Series B Convertible Preferred Stock		(135	)		—
Net loss attributable to ThermoEnergy Corporation common stockholders	$	(2,664	)	$	(7,321	)
Loss per share attributable to ThermoEnergy Corporation common stockholders, basic and diluted	$	(0.05	)	$	(0.13	)
Weighted average shares used in computing loss per share, basic and diluted		55,848,585			55,848,585