10-K 1 tegc10k_31aug09.txt ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2009 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file # 333-130922 THRUST ENERGY CORP. (Exact Name of Registrant as Specified in its Charter) NEVADA (State or other jurisdiction of incorporation or organization) 20-3373669 (I.R.S. Employer Identification number) 1440-3044 BLOOR STREET, TORONTO, ONTARIO M8X 2Y8 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (647) 456-9521 Securities registered under Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $0.0001 PAR VALUE Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Issuer's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [X] No [ ] The Issuer had no revenue for the fiscal year ended August 31, 2009. As of November 25, 2009, the Issuer had 13,603,950 shares of Common Stock outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] FORWARD LOOKING STATEMENTS Certain statements made in this Annual Report are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements made in this Report are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the growth and expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements made in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements made in this Report, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. As used in this annual report, the terms "we", "us", "our", "Company", and "Thrust" means Thrust Energy Corp., unless otherwise indicated. PART I ITEM 1. DESCRIPTION OF BUSINESS GENERAL We are an energy company, engaged in the exploration of commercially exploitable oil and gas reserves and the development of renewable energy resources, such as solar and wind. We were incorporated in the State of Nevada on September 15, 2004. Our office is located at Suite 1440, 3044 Bloor Street, Toronto, Ontario. We have no subsidiaries. Our telephone number is (647) 456-9521. Our facsimile number is (647) 439-3785. BUSINESS From inception until 2009, our business was exclusively limited to oil and gas exploration in the United States and Canada. In 2009, we expanded our business plan to include the development of renewable energy sources, photovoltaic solar energy in particular. Since our business requires significant capital and we have limited assets and resources, we intend to initially participate in the oil and gas industry by acquiring undivided working interests in small oil and gas exploration properties and non-operating interests in both producing and exploration projects throughout the United States and Canada. There can be no assurance that we will be successful in our exploration and investment activities. A "working interest" is an interest in a well that bears the drilling and operating expenses thereof. A "non-operating interest" is a working interest for which the owner does not operate the well. We have only just recently begun to pursue the development of renewable energy sources. We plan to develop, construct and operate commercial solar installations in North America. We will require significant additional financing in order to commence any such development. Our management is not experienced in either the energy sector. We are therefore relying on consultants to identify, evaluate and structure suitable opportunities. We have not retained any geologist, geoscientist or engineer qualified to provide such services. With the assistance of consultants and, to a lesser extent, unsolicited submissions, we intend to evaluate potential opportunities in the United States and Canada that may become available on acceptable terms and that have the potential to provide us with production revenue and reserves. We intend to outsource an appropriate level of the capital-intensive aspects of our business om order to achieve significant cost savings and operational efficiencies. We have not earned any revenue since our inception and presently have negative cash flow. Our business plan is to focus on acquiring non-operating interests in oil and gas projects that are already producing and that will yield a positive cash flow to fund our operations and re-investment in other oil and gas projects. We also intend to acquire non-operating interests in exploration projects, but these investments have a higher risk and are less likely to generate revenue. While we have reviewed several farm-in opportunities, we have not made any acquisitions or investments to date. We intend to continue to pursue the development of large scale (in excess of one Megawatt), ground-mounted solar power plants, either alone or in partnership with others. We do not presently have any oil, gas or renewable energy interests. Our assets are presently limited to cash. COMPETITION The oil and gas business is highly competitive, and we do not hold a significant competitive position within it. Our competitors include major integrated oil and gas companies and numerous independent oil and gas companies, individuals and drilling and income programs. Some of our competitors are also potential customers. Many of our competitors are large, well established companies with substantially larger operating staffs and greater capital resources than we have and which have been engaged in the energy business for a much longer time than we have. Such companies may be able to pay more for productive oil and gas properties and exploratory prospects and to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. The renewable energy industry is intensely competitive and rapidly evolving. The number of solar plant developers has rapidly increased due to government incentives and relatively low barriers to entry. We have only recently expanded our business plan to include renewable energy, and do not presently hold a significant competitive position in the solar industry. Many of our competitors are large, well established companies with substantially larger operating staffs and greater capital resources than we have, which have been engaged in the solar energy business for a much longer time than we have. GOVERNMENT AND ENVIRONMENTAL REGULATION Domestic development, production and sale of oil and gas are extensively regulated at both the federal and state levels. Legislation affecting the oil and gas industry is under constant review for amendment or expansion, frequently increasing the regulatory burden. Also, numerous departments and agencies, both federal and state, have issued rules and regulations binding on the oil and gas industry and its individual members, compliance with which is often difficult and costly and some of which carry substantial penalties for failure to comply. State statutes and regulations require permits for drilling operations, drilling bonds and reports concerning wells. Texas and other states in which we intend to conduct operations also have statutes and regulations governing conservation matters, including the unitization or pooling of oil and gas properties and establishment of maximum rates of production from oil and gas wells. Our planned operations will be subject to extensive and developing federal, state and local laws and regulations relating to environmental, health and safety matters; petroleum; chemical products and materials; and waste management. Permits, registrations or other authorizations will be required for any future oil and gas exploration and production activities. These permits, registrations or authorizations will be subject to revocation, modification and renewal. Governmental authorities have the power to enforce compliance with these regulatory requirements, the provisions of required permits, registrations or other authorizations, and lease conditions, and violators are subject to civil and criminal penalties, including fines, injunctions or both. Failure to obtain or maintain a required permit may also result in the imposition of civil and criminal penalties. Third parties may have the right to sue to enforce compliance. Some risk of costs and liabilities related to environmental, health and safety matters is inherent in our planned operations, as it is with other companies engaged in similar businesses, and there can be no assurance that material costs or liabilities will not be incurred. In addition, it is possible that future developments, such as stricter requirements of environmental or health and safety laws and regulations affecting our business or more stringent interpretations of, or enforcement policies with respect to, such laws and regulations, could adversely affect us. To meet changing permitting and operational standards, we may be required, over time, to make site or operational modifications at our facilities, some of which might be significant and could involve substantial expenditures. There can be no assurance that material costs or liabilities will not arise from these or additional environmental matters that may be discovered or otherwise may arise from future requirements of law. The market for electricity generation products is heavily influenced by national, regional and local government regulations and policies concerning the electric utility industry, as well as internal policies and regulations promulgated by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In Canada and in a number of other countries, these regulations and policies are being modified and may continue to be modified. Customer purchases of, or further investment in the research and development of, alternative energy sources, including solar power technology, could be deterred by these regulations and policies, which could result in a significant reduction in the potential demand for our solar products. EMPLOYEES We currently have no employees other than our sole officer and director, who has not been paid for his services. We do not have any employment agreements with our sole director and officer. We do not presently have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our sole officer and director. Since our sole officer and director is not experienced with the energy business, we intend to retain qualified persons on a contract basis as needed from time to time to identify, evaluate and structure suitable opportunities. We have not looked for or talked to any geologist, geoscientist or engineer who will perform work for us in the future. ITEM 1A. RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. ITEM 1B. UNRESOLVED STAFF COMMENTS We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. ITEM 2. PROPERTIES We do not presently own or have an interest in any property. ITEM 3. LEGAL PROCEEDINGS Neither Thrust Energy Corp., nor its sole officer and director is a party to any material legal proceeding or litigation and such persons know of no material legal proceeding or contemplated or threatened litigation. There are no judgments against Thrust Energy Corp. or its sole officer and director. Our sole officer and director has not been convicted of a felony or misdemeanor relating to securities or performance in corporate office. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the Company's shareholders during the fiscal year ended August 31, 2009. PART II ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is quoted on the OTC Bulletin Board under the symbol "TEGC". Trading of our stock is sporadic and does not constitute an established public market for our shares. For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. The following quotations obtained from Yahoo! Finance reflect the high and low bids for our shares of common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. --------------------------------------- QUARTER ENDED HIGH LOW --------------------------------------- August 31, 2009 $0.20 $0.02 May 31, 2009 $0.10 $0.02 February 28, 2009 $0.05 $0.02 November 30, 2008 $0.26 $0.05 August 31, 2008 $0.37 $0.26 May 31, 2008 $0.27 $0.26 February 28, 2008 $0.50 $0.20 November 30, 2007 $0.40 $0.20 --------------------------------------- SHAREHOLDERS Our shares of common stock are issued in registered form. The registrar and transfer agent for our shares of common stock is Transfer Online, Inc., 317 SW Alder Street, 2nd Floor, Portland, OR 97204 (Telephone: 503.227.2950; Facsimile: 503.227.6874). On November 10, 2009, the shareholders' list of our shares of common stock showed 39 registered holders of our shares of common stock and 13,603,950 shares of common stock outstanding. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of shares of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. DIVIDEND POLICY Our Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available there for in our sole discretion; however, to date no dividends have been declared or paid on common stock. PENNY STOCK REGULATION Our shares must comply with the Penny Stock Reform Act of 1990, which may potentially decrease our shareholders' ability to easily transfer their shares. Broker-dealer practices in connection with transactions in "penny stocks" are regulated. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that must comply with the penny stock rules. Since our shares must comply with such penny stock rules, our shareholders will in all likelihood find it more difficult to sell their securities. USE OF PROCEEDS FROM REGISTERED SECURITIES On April 19, 2006, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-130922) effective. Our offering commenced on the effective date and terminated on October 18, 2006. We sold 3,603,950 shares through the offering at a price of $0.10 per share, for gross proceeds of $360,395. Our total offering expenses were $25,290. Of this amount, $14,523 was paid from the offering proceeds. The remainder ($10,767) was paid from the proceeds of a non-interest bearing loan of $25,000 from our President, Thomas Mills, which was convertible into shares of our common stock at the rate of $0.25 per share. On July 31, 2007, we repaid the convertible loan in full. We did not intend to repay the loan from the proceeds of our initial public offering, but in light of our lack of revenue, the convertibility of the loan and the fact that the loan proceeds were primarily used to pay for offering and startup expenses, the directors resolved (Mr. Mills abstaining) that it was in the best interests of the corporation to repay the loan from the proceeds. After paying offering expenses and repaying the loan from our director, the net offering proceeds were $322,872. As of August 31, 2009, we have used the net proceeds to pay $51,973 for professional services and office expenses. In fiscal 2009, our management determined that it was in the best interests of the company to diversify its business interests to include the development of renewable energy projects, and in particular, solar power plants. In connection therewith, we spent $105,227 in business development costs arising from its participation in the Intersolar solar energy trade shows in Munich and San Francisco in 2009. ITEM 6. SELECTED FINANCIAL DATA We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES. We are an exploration stage oil and gas company that has not begun operations. Our capital has been obtained via issuance of common stock and shareholder loans. We plan to acquire undivided working interests in small exploration properties and non-operating interests in both producing and exploration projects, and to develop, construct and operate commercial solar installations throughout North America. On April 19, 2006, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-130922) effective. Our offering commenced on April 19, 2006, and terminated on October 16, 2006. We sold 3,603,950 shares through the offering at a price of $0.10 per share, for gross proceeds of $360,395. As of August 31, 2009, we had total assets of $177,741, comprised entirely of cash. This was a decrease from $291,562 in total assets as of August 31, 2008. This decrease primarily resulted from business development activities arising from pursuing renewable energy opportunities. The remainder of the decrease in our assets is due to professional fees and office expenses. As of August 31, 2009, our total liabilities increased to $2,791 from $1,691 as of August 31, 2008. This increase resulted from outstanding invoices payable to trade creditors. We have not generated revenue since the date of inception. We presently have sufficient working capital to satisfy our cash requirements for the next 12 months of operations. Other than the purchase of some office equipment, we do not intend to purchase or sell any significant equipment during the next twelve months. We do not anticipate hiring any employees over the next 12 months. RESULTS OF OPERATIONS We posted an operating loss of $114,921 for the fiscal year ending August 31, 2009, due primarily to our attendance and participation at the Intersolar solar trade shows in Munich and San Francisco. This was an increase from the operating loss of $27,458 for the previous fiscal year. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. ITEM 8. FINANCIAL STATEMENTS THRUST ENERGY CORP. (An Exploration Stage Company) Financial Statements (EXPRESSED IN U.S. DOLLARS) August 31, 2009 and 2008 INDEX Report of Independent Registered Public Accounting Firm Balance Sheets Statements of Stockholders' Equity Statements of Operations and Comprehensive Loss Statements of Cash Flows Notes to Financial Statements CHANG LEE LLP CHARTERED ACCOUNTANTS 606 - 815 Hornby Street Vancouver, B.C, V6Z 2E6 Tel: 604-687-3776 Fax: 604-688-3373 E-mail: info@changleellp.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF THRUST ENERGY CORP. (An exploration stage company) We have audited the accompanying balance sheets of Thrust Energy Corp. (an exploration stage company) as at August 31, 2009 and 2008 and the related statements of stockholders' equity, operations and cash flows for the period from September 15, 2004 (date of inception) to August 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at August 31, 2009 and 2008 and the results of its operations and its cash flows for the period from September 15, 2004 (date of inception) to August 31, 2009, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred losses from operations since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfill its exploration activities. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Vancouver, Canada Chang Lee LLP November 25, 2009 Chartered Accountants
THRUST ENERGY CORP. (An Exploration Stage Company) Balance Sheets August 31, 2009 (EXPRESSED IN U.S. DOLLARS) ------------------------------------------------------------------------------------------------------------- 2009 2008 ------------------------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 177,741 $ 291,562 ------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $ 177,741 $ 291,562 ============================================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 2,791 $ 1,691 ------------------------------------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 2,791 1,691 ------------------------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY PREFERRED STOCK (NOTE 4) 5,000,000 preferred shares at a par value of $0.0001 per share Issued and outstanding: None - - COMMON STOCK (NOTE 4) 100,000,000 common shares at a par value of $0.0001 per share Issued and outstanding: 13,603,950 common shares (August 31, 2008: 13,603,950) 860 860 ADDITIONAL PAID-IN CAPITAL 361,493 361,493 (DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (187,403) (72,482) ------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY (174,950) 289,871 ------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 177,741 $ 291,562 =============================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
THRUST ENERGY CORP. (An Exploration Stage Company) Statements of Stockholders' Equity For the period from September 15, 2004 (inception) to August 31, 2009 (EXPRESSED IN U.S. DOLLARS) ------------------------------------------------------------------------------------------------------------------------------------ Deficit accumulated Total Additional Share during stockholders' Preferred Stock Common Stock paid-in subscriptions exploration equity Shares Amount Shares Amount capital received stage (deficiency) ------------------------------------------------------------------------------------------------------------------------------------ Issuance of common stock for cash July 5, 2005, $0.00005 per share - $ - 10,000,000 $ 500 $ - $ - $ - $ 500 Imputed interest from a shareholder - - - - 21 - - 21 Loss and comprehensive loss for the period - - - - - - (1,800) (1,800) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2005 - - 10,000,000 500 21 - (1,800) (1,279) ------------------------------------------------------------------------------------------------------------------------------------ Share subscription received - - - - - 165,000 - 165,000 Imputed interest from a shareholder - - - - 750 - - 750 Loss and comprehensive loss for the year - - - - - - (20,021) (20,021) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2006 - - 10,000,000 500 771 165,000 (21,821) 144,450 ------------------------------------------------------------------------------------------------------------------------------------ Share subscription received - - 3,603,950 360 360,035 (165,000) - 195,395 Imputed interest from a shareholder - - - - 687 - - 687 Loss and comprehensive loss for the year - - - - - - (23,203) (23,203) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2007 - - 13,603,950 860 361,493 - (45,024) 317,329 ------------------------------------------------------------------------------------------------------------------------------------ Loss and comprehensive loss for the year - - - - - - (27,458) (27,458) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2008 - $ - 13,603,950 $ 860 $ 361,493 $ - $ (72,482) $ 289,871 Loss and comprehensive loss for the year - - - - - - (114,921) (114,921) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2009 - $ - 13,603,950 $ 860 $ 361,493 $ - $ (187,403) $ 174,950) ====================================================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
THRUST ENERGY CORP. (An Exploration Stage Company) Statements of Operations and Comprehensive Loss (EXPRESSED IN U.S. DOLLARS) ------------------------------------------------------------------------------------------------------------ Cumulative from September 15, 2004 (inception) to Year Ended Year Ended August 31, 2009 August 31, 2009 August 31, 2008 ------------------------------------------------------------------------------------------------------------ EXPENSES Accounting fees $ 32,323 $ 7,750 $ 8,253 Amortization 2,153 - 1,076 Bank charges 326 - 30 Filing fees 2,171 - - Business development 105,227 105,227 - Interest 1,458 - - Leases 3,547 - - Legal 12,871 155 - Office 6,779 1,100 3,452 Transfer agent 6,653 689 752 Write-off of oil & gas property (note 5) 13,895 - 13,895 ------------------------------------------------------------------------------------------------------------ OPERATING LOSS 187,403 114,921 27,458 ------------------------------------------------------------------------------------------------------------ NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (187,403) $ (114,921) $ (27,458) ============================================================================================================ BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.00) ============================================================================================================ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - basic and diluted 13,603,950 13,603,950 ============================================================================================================
The accompanying notes are an integral part of these financial statements
THRUST ENERGY CORP. (An Exploration Stage Company) Statements of Cash Flows (EXPRESSED IN U.S. DOLLARS) -------------------------------------------------------------------------------------------------------------------------- Cumulative from September 15, 2004 (inception) to Year Ended Year Ended August 31, 2009 August 31, 2009 August 31, 2008 -------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Net (Loss) for the period $ (187,403) $ (114,921) $ (27,458) Adjustments to reconcile net income to net cash provided by (used in) operating activities: - amortization 2,153 - 1,076 - imputed interest 1,458 - - - write off of oil & gas property - - 13,895 Changes in operating assets and liabilities - (increase) decrease in prepaid expenses - - 2,235 - increase (decrease) in accounts payable and accrued liabilities 2,791 1,100 1,691 -------------------------------------------------------------------------------------------------------------------------- NET CASH USED IN OPERATING ACTIVITIES (181,001) (113,821) (8,561) -------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES Purchase equipment (2,153) - - -------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Proceeds from issuance of common stock 360,895 - - -------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 177,741 (113,821) (8,561) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 291,562 300,123 -------------------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 177,741 $ 177,741 $ 291,562 ==========================================================================================================================
The accompanying notes are an integral part of these financial statements NOTE 1 - NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS Thrust Energy Corp. is engaged in the exploration, exploitation, development and production of oil and gas projects within North America. We incorporated in the state of Nevada on September 15, 2004. Our principal offices are in Toronto, Ontario, Canada. Our fiscal year end is August 31. These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America with the on-going assumption that we will be able to realize our assets and discharge its liabilities in the normal course of business. As shown in the accompanying financial statements, we have incurred operating losses since inception and further losses are anticipated in the development of our business. As of August 31, 2009, we have limited financial resources and require additional financing to fund our operations. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to locate profitable mineral properties, generate revenue from our planned business operations, and control exploration cost. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should we be unable to continue as a going concern. Management plans to fund its future operation by obtaining additional financing and commencing commercial production. However, there is no assurance that we will be able to obtain additional financing from investors or private lenders. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Cash Equivalents We consider all highly liquid investments and debt instruments purchased with maturity of three months or less to be cash equivalents. At August 31, 2009, we had no cash equivalents. Use of Estimates Accounting principles generally accepted in the United States of America require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Concentration of Credit Risk We place our cash and cash equivalents with high credit quality financial institutions in 246843517uninsured accounts246843517idiris duan2468435171188807710Shouldn't there be $100,000 insurance on the bank account?. Fair Value of Financial Instruments The carrying amount of our financial instruments, which includes cash and cash equivalents and accounts payable and accrued liabilities, approximate their fair value due to the short period to maturity of these instruments. Revenue Recognition We record revenue when title passes, delivery occurs to our customers and the customer assumes the risks and rewards of ownership, when the price is fixed and determinable, and when collectibility is reasonably assured. Income Tax We recognize deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. We provide a valuation allowance for deferred tax assets when we consider realization of such assets to be less likely than not. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Loss per Common Share We have adopted Statement of Financial Accounting Standards No. 128, Earnings Per Share. Statement 128 requires the reporting of basic and diluted earnings/loss per share. We calculate basic loss per share by dividing net loss by the weighted average number of outstanding common shares during the period. Comprehensive Loss We apply Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. Statement 130 establishes standards for the reporting and display of comprehensive income or loss, requiring its components to be reported in a financial statement. For the year ended August 31, 2009 our only component of comprehensive income or loss was the net loss reported in the operations statement. Foreign Currency Translation We maintain our accounting records in U.S. Dollars. At the transaction date, each asset, liability, revenue and expense involves foreign currencies is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities involving foreign currencies are remeasured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. Our currency exposure is insignificant and immaterial and we do not use derivative instruments to reduce our potential exposure to foreign currency risk. Oil and Gas Activity We follow the successful-efforts method of accounting for oil and gas property. Under this method of accounting, we capitalize all property acquisition cost and cost of exploratory and development wells when incurred, pending determination of whether the well has found proved reserves. If an exploratory well does not find proved reserves, we charge to expense the cost of drilling the well. We include exploratory dry hole cost in cash flow from investing activities within the cash flow statement. We capitalize the cost of development wells whether productive or nonproductive. We expense as incurred geological and geophysical cost and the cost of carrying and retaining unproved property. We will provide depletion, depreciation and amortization (DD&A) of capitalized cost of proved oil and gas property on a field-by-field basis using the units-of-production method based upon proved reserves. In computing DD&A we will take into consideration restoration, dismantlement and abandonment cost and the anticipated proceeds from equipment salvage. When applicable, we will apply the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, which provides guidance on accounting for dismantlement and abandonment cost. We review our long-lived assets for impairment when events or changes in circumstances indicate that an impairment may have occurred. In the impairment test we compare the expected undiscounted future net revenue on a field-by-field basis with the related net capitalized cost at the end of each period. Should the net capitalized cost exceed the undiscounted future net revenue of a property, we will write down the cost of the property to fair value, which we will determine using discounted future net revenue. We will provide an impairment allowance on a property-by-property basis when we determine that the unproved property will not be developed. Stock-Based Compensation The Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. SFAS No. 123(revised) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. We did not grant any stock options during the years ended August 31, 2009 and 2008. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Pronouncements In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141(revised 2007) ("SFAS 141(R)"), "Business Combinations". SFAS 141 (R) applies the acquisition method of accounting for business combinations established in SFAS 141 to all acquisitions where the acquirer gains a controlling interest, regardless of whether consideration was exchanged. Consistent with SFAS 141, SFAS 141 (R) requires the acquirer to fair value the assets and liabilities of the acquiree and record goodwill on bargain purchases, with main difference the application to all acquisitions where control is achieved. SFAS 141 (R) is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 160 ("SFAS 160"), "Non-controlling Interests in Consolidated Financial Statements - An amendment of ARB No. 51". SFAS 160 requires companies with non controlling interests to disclose such interests clearly as a portion of equity but separate from the parent's equity. The non controlling interest's portion of net income must also be clearly presented on the Income Statement. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations. In March 2008, the FASB issued FASB Statement No. 161 ("SFAS 161"), "Disclosures about Derivative Instruments and Hedging Activities". SFAS 161 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations. In May 2008, the FASB issued SFAS No. 162 ("SFAS 162"), "The Hierarchy of Generally Accepted Accounting Principles". SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles". The adoption of this statement is not expected to have a material effect on the Company's financial statements. In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life of Intangible Assets" ("FSP 142-3"). FSP 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under FASB Statement No. 142, "Goodwill and Other Intangible Assets". This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements. In May 2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 clarifies that convertible debt instruments that may be settled in cash upon either mandatory or optional conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants." Additionally, FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We will adopt FSP APB 14-1 beginning in the first quarter of 2010, and this standard must be applied on a retrospective basis. The adoption of this statement is not expected to have a material effect on the Company's financial statements. In April, 2009, the FASB issued FASB Staff Position No. FAS 157-4 ("FSP FAS 157-4"), "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly". The FSP provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of this FSP does not believe to have a material impact on the Company's financial statements. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Pronouncements (continued) In April, 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1 ("FSP FAS 107-1 and APB 28-1"), Interim Disclosures about Fair Value of Financial Instruments. The FSP amends SFAS 107, Disclosure about Fair Value of Financial Instruments, and Accounting Principles Board Opinion No. 28, Interim Financial Reporting, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. Adoption of this FSP does not believe to have a material impact on the Company's financial statements. On April 1, 2009, the FASB issued FASB Staff Position No. FSP FAS 115-2 and FAS 124-2 ("FSP FAS 115-2 and FAS 124-2"), Recognition and Presentation of Other-Than-Temporary Impairments. The FSP amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The adoption of this FSP does not believe to have a material impact on the Company's financial statements. In June 2009, the FASB issued FASB No. 168 The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162 ("SFAS 168"). SFAS 168 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP in the United States. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. In June 2009, the FASB issued FASB No. 166, Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140 ("SFAS 166"). SFAS 166 requires additional disclosures about the transfer and derecognition of financial assets and eliminates the concept of qualifying special-purpose entities under SFAS 140. SFAS 166 is effective for fiscal years beginning after November 15, 2009. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company's financial statements upon adoption. NOTE 3 - OIL AND GAS PROPERTY La Vaca Prospect By an Oil, Gas and Mineral Lease Agreement ("Lease Agreement") dated July 31, 2005, we were granted the exclusive right of exploring, drilling, mining and operating for, producing and owning oil, gas, sulfur and all other minerals on a 346.16 undeveloped acres of land located in the county of Jim Wells, Texas, USA for a term of five years by the payment of $10,000. We capitalized the amount for the acquisition of the Lease Agreement and the related acquisition costs (legal and broker fees) for a total of $13,895. Pursuant to the Lease Agreement, we were required to commence our operations on the above said land before the first anniversary date or tender the sum of $1,730.75 as the delay rental to cover the privilege of deferring operations for one year from said date. During the fiscal year 2008, Company management determined that under prevailing market conditions it was not in the best interests of the Company to continue to pay delay rental under the Lease Agreement. The Company did not pay any sum towards the delay rental in 2008. Any and all rights the Company had under the Lease Agreement terminated and reverted back to the lessor on July 31, 2008. The Company has written off all costs related to acquiring the leasehold interest which amounts to $13,895. NOTE 4 - PREFERRED AND COMMON STOCK We have 5,000,000 shares of preferred stock authorized and none issued. We have 100,000,000 shares of common stock authorized. All shares of stock are non-assessable and non-cumulative, with no preemptive rights. NOTE 5 - INCOME TAXES At August 31, 2009, we had deferred tax assets of approximately $25,500 principally arising from net operating loss carryforwards for income tax purposes. As our management cannot determine that it is more likely than not that we will realize the benefit of the deferred tax asset, a valuation allowance equal to the deferred tax asset has been established at August 31, 2009. A reconciliation of income taxes at statutory rates with the reported taxes is as follows: August 31, 2009 August 31, 2008 Net loss before income taxes $ 114,921 $ 27,458 Income tax recovery at statutory rates of 35% 40,222 9,610 Unrecognized benefits of non-capital losses (40,222) (9,610) Total income tax recovery $ - $ - The significant components of the deferred tax asset at August 31, 2009 were as follows: August 31, 2009 August 31, 2008 Deferred tax assets: Net operating loss carryforwards $ 65,600 $ 25,500 Valuation allowance (65,600) (25,500) Net deferred tax asset $ - $ - At August 31, 2009, we had net operating loss carryforwards of approximately $187,400, which expire in the year 2025 through 2029. NOTE 6 - SUBSEQUENT EVENT On November 25, 2009, we obtained an assignment of the right to acquire a 4.9% working interest in certain oil and gas properties located in Alberta from an independent third party. As consideration for the working interest, we agreed to pay a total of $160,000 immediately, and issue 75 million common shares and 5 million preferred shares upon closing. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in or disagreements with our independent accountants since our inception. ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES As of August 31, 2009, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (who are one and the same person), of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based solely on the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of August 31, 2009, the Company's disclosure controls and procedures were not effective: 1. The Company presently has only one officer, who is also the sole director, and no employees. Inasmuch as there is no segregation of duties within the Company, there is no management oversight, no one to review control documentation and no control documentation is being produced. CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES There were no changes in disclosure controls and procedures that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially effect, our disclosure controls and procedures. We will not be implementing any changes to our disclosure controls and procedures until there is a significant change in our operations or capital resources. LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS Our management, including our CEO and CFO (who are one and the same person), does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. CEO AND CFO CERTIFICATIONS Appearing immediately following the Signatures section of this report there are Certifications of our CEO and CFO (who are one and the same person). The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of August 31, 2009. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based solely on the material weaknesses described below, our management has concluded that, as of August 31, 2009, the Company's internal control over financial reporting was not effective. Management has identified the following deficiencies that, when aggregated, may possibly be viewed as a material weakness in our internal control over financial reporting as of August 31, 2009: 1. We do not have an Audit Committee - While not being legally obligated to have an audit committee, it is our management's view that such a committee, including a financial expert member, is an utmost important entity level control over our financial statements. To date we have not established an audit committee. 2. Insufficient documentation of financial statement preparation and review procedures - We employ policies and procedures in reconciliation of the financial statements and the financial information based on which the financial statements are prepared. Notwithstanding, the controls and policies we employ are not sufficiently documented. 3. We did not maintain proper segregation of duties for the preparation of our financial statements - As of August 31, 2009 the majority of the preparation of financial statements was carried out by one person. Additionally, we currently only have one officer/director having oversight on all transactions. This has resulted in several deficiencies including: a. Significant, non-standard journal entries were prepared and approved by the same person, without being checked or approved by any other personnel. b. Lack of control over preparation of financial statements, and proper application of accounting policies. 4. We lack sufficient information technology controls and procedures - As of August 31, 2009, we lacked a proper data back-up procedure, and while backup did take place in actuality, we believe that it was not regulated by methodical and consistent activities and monitoring. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING We have also established and evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation. Nor have there have been any changes in our internal control over financial reporting during the last fiscal quarter. Except as set out below, we do not intend to implement any changes to our internal control over financial reporting until there is a significant change in our level of operations and capital resources: 1. We will engage additional personnel to assist with the preparation of our financial statements; which will allow for proper segregation of duties, as well as additional manpower for proper documentation. 2. We will engage in a thorough review and restatement of our information technology control procedures, in addition to procurement of all hardware and software that will enable us to maintain proper backups, access, control etc. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. We are not required to provide an attestation report by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT DIRECTORS AND EXECUTIVE OFFICERS The following sets forth our directors, executive officers, promoters and control persons, their ages, and all offices and positions held. Directors are elected for a period of one year and thereafter serve until the shareholders duly elect their successor. Officers and other employees serve at the will of the Board of Directors. TERM PERIOD SERVED AS DIRECTOR/OFFICER NAME POSITION AGE Thomas Mills CEO, President, CFO, Secretary and a director 41 2005 to present Thomas E. Mills serves as our President, Secretary, Treasurer and our sole director. From 2001 until 2004, Mr. Mills was the President of Torrent Energy Corp. (formerly, Scarab Systems, Inc.), an oil and gas exploration company. Mr. Mills was a director and executive officer of Kingston Mines, Ltd., a mineral exploration company, from 2005 to 2008. Since 2003, Mr. Mills has been the President, CEO and a director of AMP Productions Ltd., a motion picture production company. In 2009, Mr. Mills became the sole executive officer and director of Novagen Solar Inc., a company involved in the sale of photovoltaic products. Mr. Mills maintains a part-time legal practice to which he devotes not more than 25 hours per week. Mr. Mills received his Bachelor of Laws degree from the University of British Columbia in 1996, and holds a Bachelor of Arts degree obtained from the University of Waterloo, Waterloo, Ontario in 1992. He was called to the Bar of British Columbia in 1997. All directors serve for terms of one year each, and are subject to re-election at our regular Annual Meeting of Shareholders, unless they earlier resign. There are no material proceedings to which any of our directors, officers or affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, affiliate, or security holder is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries. We have attempted and will continue to attempt to insure that any transactions between us and our officers, directors, principal shareholders, or other affiliates have been and will be on terms no less favorable to us than could be obtained from unaffiliated third parties on an arm's-length basis. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS Except as noted herein or below, during the last five-(5) years none of our directors or officers have: (1) had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) been convicted in a criminal proceeding or subject to a pending criminal proceeding; (3) been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or (4) been found by a court of competent jurisdiction in a civil action, the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Under the Securities Laws of the United States, the Company's Directors, our Executive (and certain other) Officers, and any persons holding more than ten percent of the Company's common stock are required to report their ownership of the Company's common stock and any changes in that ownership to the Securities and Exchange Commission. Specific due dates for these reports have been established and the Company is required to report in this report any failure to file by these dates. All of these filing requirements were satisfied by the Company's Officers, Directors, and ten-percent holders. In making these statements, we have relied on the written representation of our Directors and Officers or copies of the reports that they have filed with the Commission. COMMITTEES OF THE BOARD All proceedings of the board of directors for the fiscal year ended August 31, 2009 were conducted by resolutions consented to in writing by our board of directors and filed with the minutes of the proceedings of our board of directors. Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by the board of directors. Our company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment. A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our CEO, Thomas Mills, at the address appearing on the first page of this registration statement. AUDIT COMMITTEE FINANCIAL EXPERT We do not have a standing audit committee. Our directors perform the functions usually designated to an audit committee. Our board of directors has determined that we do not have a board member that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K, nor do we have a board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the NASD Rules. We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Our board of directors does not believe that it is necessary to have an audit committee because management believes that the functions of an audit committees can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date. As we generate revenue in the future, we intend to form a standing audit committee and identify and appoint a financial expert to serve on our audit committee. CODE OF ETHICS The Company has adopted a Code of Ethics for Senior Financial Officers that is applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of our Code of Ethics for Senior Financial Officers is filed as an exhibit to this annual report on Form 10-K. INDEMNIFICATION Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada. Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable. ITEM 11. EXECUTIVE COMPENSATION To date we have no employees other than our officers. No compensation has been awarded, earned or paid to our officers. We have no employment agreements with any of our officers. We do not contemplate entering into any employment agreements until such time as we have proven mineral reserves. There is no arrangement pursuant to which any of our directors has been or is compensated for services provided as one of our directors. There are no stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers or directors. We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS The following table sets forth certain information regarding the beneficial ownership of our common stock as of August 31, 2009 by (i) each person known by us to be a beneficial owner of more than five percent (5%) of our issued and outstanding common stock; (ii) each of our Directors and executive officers; and (iii) all our directors and executive officers as a group. NAME AND ADDRESS NUMBER OF SHARES % Thomas Mills 10,000,000 74 1440-3044 Bloor Street West Toronto, ON M8X 2Y8 Directors and officers as a group (one person) 10,000,000 74 Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is considered to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof, upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner's percentage ownership is determined by assuming that any such warrants, options or convertible securities that are held by such person (but not those held by any other person) and which can be exercised within 60 days from the date hereof, have been exercised. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE There has not been any transaction since September 1, 2007, nor is there any currently proposed transaction, in which Thrust Energy Corp. has been or is a participant involving an amount in excess of $120,000, and in which any related person had or will have a direct or indirect material interest. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES AUDIT FEES The aggregate fees billed by Chang Lee LLP for professional services rendered for the audit of our annual financial statements included in this Annual Report on Form 10-K for the fiscal year ended August 31, 2009 is estimated to be $5,000. The aggregate fees billed by Chang Lee LLP for professional services rendered for the audit of our annual financial statements included in this Annual Report on Form 10-KSB for the fiscal year ended August 31, 2008 was $5,250. AUDIT RELATED FEES For the fiscal years ended August 31, 2009 and 2008, the aggregate fees billed for assurance and related services by Chang Lee LLP relating to our quarterly financial statements which are not reported under the caption "Audit Fees" above, were $2,500 and $2,740, respectively. TAX FEES For the fiscal years ended August 31, 2008 and 2009, the aggregate fees billed for tax compliance, by Chang Lee LLP were nil. ALL OTHER FEES For the fiscal years ended August 31, 2009 and 2008, the aggregate fees billed by Chang Lee LLP for other non-audit professional services, other than those services listed above, totaled nil. Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before Chang Lee LLP is engaged by us or our subsidiaries to render any auditing or permitted non-audit related service, the engagement be: -approved by our audit committee; or -entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management. We do not have an audit committee. Our sole director pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, our sole director does not have records of what percentage of the above fees were pre-approved. However, all of the above services and fees were reviewed and approved by our sole director either before or after the respective services were rendered. PART IV ITEM 15. EXHIBITS EXHIBIT TITLE 3.1 Articles of Incorporation, Thrust Energy Corp., incorporated by reference from the Form 10KSB filed November 6, 2006 3.2 Amended and Restated Bylaws, Thrust Energy Corp., incorporated by reference from the Form 10KSB filed November 6, 2006 4.1 Form of Stock certificate, Thrust Energy Corp., incorporated by reference from the Form 10KSB filed November 6, 2006 14.1 Code of Ethics for Senior Financial Officers, Thrust Energy Corp., incorporated by reference from the Form 10KSB filed November 6, 2006 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THRUST ENERGY CORP. Date: November 27, 2009 By:/s/Thomas Mills Thomas Mills, Chief Executive Officer, Chief Principal Accounting Officer, President In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/ Thomas Mills Chief Executive Officer, Chief Principal November 25, 2009 Thomas Mills Accounting Officer, President & Director