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, 2010
[ ] 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)
Issuer's telephone number: (647) 456-5375
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, 2010.
As of November 26, 2009, the Issuer had 680,202 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
BUSINESS
We are an exploration stage oil and gas company. Since our business requires significant capital and we have limited assets and resources, we will 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. The oil and gas business involves numerous risks. 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.
Our management is not experienced in the oil and gas industry. We will therefore rely on consultants to identify, evaluate and structure suitable oil and gas acquisition opportunities. With the assistance of our consultants and, to a lesser extent, unsolicited submissions, we intend to evaluate potential acquisitions of oil and gas interests 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 will rely on third parties for outsourced drilling and exploration services as appropriate. By outsourcing an appropriate level of the capital-intensive aspects of our business, we expect to achieve significant cost savings and operational efficiencies. We believe that our business model will permit us to maximize the use of our otherwise limited resources, reduce the risk of unsuccessful drilling efforts, and capitalize on the experience of our consultants.
We are focusing our acquisition and exploration activities in the Province of Alberta. This region is characterized by potentially long-lived reserves with predictable and relatively low production depletion rates, multiple geologic targets that decrease risk, lower service costs than in more competitive or remote areas, a favorable regulatory environment that encourages drilling efforts, and limited federal land or land access impediments. We will, however, consider any prospective oil and gas projects located in the United States or Canada that we believe may yield commercially producible amounts of oil or gas.
We have not earned any revenue since our inception and presently have negative cash flow. To date, our efforts upon have been devoted to acquiring non-operating interests in projects that are already producing oil or natural gas, and thereby generate positive cash flow to fund operations and re-investment in other oil and gas projects. We have also pursued non-operating interests in exploration projects.
In 2009, we expanded our business plan to include the development of renewable energy sources. Our efforts in this area been unsuccessful. In 2010, we abandoned our pursuit of renewable energy to focus on the acquisition of oil and natural gas interests.
On November 25, 2009, we obtained an assignment of the conditional right to acquire a working interest in certain natural gas properties located in Alberta (the "Prospect") from the well operator (an independent third party), which was subject to Thrust providing up to $1,000,000 in financing for the completion of wells located on the Prospect. On January 22, 2010, the well operator informed us that we were in default of our contractual obligations. As part of our negotiations with the well operator, we agreed to pay a further $100,000 CAD to the operator in respect of the Prospect. On February 8, 2010, our sole director advanced the sum of $25,000 CAD ($23,740) to the operator on our behalf, but we were unable to make any further payments. No working interest or any other interest in the Prospect has been granted to the Company, and the Company is not pursuing the grant of any such interest related to the Prospect. As a result of conservatism, we have written off a total of $83,740 in costs relating to the acquisition of conditional rights to acquire an interest in the Prospect.
The Company is actively pursuing recovery of its cash investment in the Prospect. The well operator is obligated to return $100,000 CAD to the Company by January 6, 2011. An additional $25,000 CAD is payable to the Company on demand without interest. On October 12, 2010, we made formal demand for the payment of $25,000 CAD from the well operator by October 31, 2010. To date, no payment has been received by the well operator.
We do not presently have any oil, gas or renewable energy interests, or other assets.
STRATEGY
We will regularly review exploration opportunities generated by our management and consultants. We will generally seek to acquire and explore properties that are located in regions having established production history and infrastructure, or current production levels with proven and potential reserve upside opportunities. In some cases, we may acquire higher risk undeveloped acreage based on available information suggesting the potential for commercially producible reserves and a favorable risk-based economic evaluation of production and price scenarios.
Our selection of exploration properties will be based primarily on available information gathered from historical records and drill logs, geologic and engineering data, surrounding production from similar wells and ease of access. The cost of obtaining such information will be unique to each property we may acquire in the future and cannot presently be estimated. Due to the expense of 3-D seismic data it is unlikely that we will obtain such information with respect to any property we acquire. 3-D seismic is the method by which a three dimensional image of the earth's subsurface is created through the interpretation of reflection seismic data collected over a surface grid. A 3-D seismic survey allows for a more detailed understanding of the subsurface than does a 2-D seismic survey and contributes significantly to field appraisal, exploitation and production. Without a 3-D seismic survey it is much more likely that our drilling efforts will be unsuccessful.
Prior to any acquisition, we intend to perform a review of the subject property generally consistent with industry practices. Such a review, however, will not reveal all existing or potential problems, nor will it permit us to become sufficiently familiar with the property to assess fully its deficiencies or potential value. Inspections of the property may not be practicable and existing problems may not be observable even in those cases where an inspection is undertaken. We may assume existing liabilities, including environmental liabilities, upon such an acquisition and would likely acquire interests in such a property on an "as is" basis.
Due to our limited assets and resources, we will be circumscribed in the type and quality of properties that we will be able to acquire. This may result in us being able to acquire only small leaseholds in areas with proven producing horizons (geological formations with a history of oil or gas production), or leaseholds in higher risk properties. We may also be required to enter into various forms of joint arrangements with unrelated companies, whereby the parties agree to share the costs of exploration, as well as the costs of and any revenue from a discovery. Such arrangements do not always equate the proportion of expenditures undertaken by a party with the share of revenue to be received by such party. There can be no assurance that we will be able to find acceptable properties for exploration, or if we do, that we will be successful in locating commercially producible reserves of oil or gas.
When we acquire a working interest in an exploration property we will assess the potential reserves of oil and gas, future oil and gas prices, operating costs, potential environmental liability, and other risks and factors beyond our control. Such an assessment is necessarily inexact and its accuracy is inherently uncertain. Based on this assessment we will determine the degree to which we will participate in exploration drilling. We plan to finance any such participation from available capital. But, when available capital is insufficient, we plan to finance our participation through the issuance of debt instruments and the sale of our stock. We do not presently have sufficient capital to perform any exploration and there can be no assurance that we ever will.
In the right circumstances, we will assume the entire risk of exploration. Alternatively, we may determine that it will be more beneficial to invite industry participants to share the risk and the reward of the prospect by financing some or all of the costs of drilling contemplated wells. In such cases, we may retain a carried working interest or a reversionary interest, or we may be required to finance all or a portion of our proportional interest in the prospect. Although this approach will reduce our potential return should the drilling operations prove successful, it will also reduce our risk and financial commitment to a particular prospect. A "carried working interest" is an oil or gas interest that has no obligation for operating costs, which are instead borne by the owner or owners of the remaining interest in the property. A "reversionary interest" is a fractional interest reserved by the owner of a whole interest when the balance of the whole interest is transferred to another party.
As is customary in the oil and gas industry, we will conduct a preliminary title
examination at the time that we acquire an exploration property. We will rely
upon the brokers of each property to conduct the title examination. We will
engage an attorney to provide a title opinion on any property having an
acquisition cost of more than $100,000 prior to acquiring it. Similarly, before
we commit to spending $100,000 on the exploration of a property we acquire, such
as for drilling operations, if we have not already obtained a title opinion on
the property we will engage an attorney to do so.
We will perform necessary curative work with respect to any significant defects
in title prior to proceeding with operations.
We also plan to evaluate and pursue from time-to-time opportunities to acquire non-operating interests in both producing and exploratory oil and gas projects with a view towards generating revenue and a significant reserve base. This approach will allow us to diversify into a larger number of prospects at a lower cost per prospect. There can be no assurance, however, that such non-operating interests will be available to us on acceptable terms.
SALES AND MARKETING
As we remain in the exploration stage, we have not yet generated any revenue, nor do we have any customers.
The principal customers for our crude oil production, if any, are expected to be refiners, remarketers and other companies, some of which are expected to have pipeline facilities near the properties we acquire. In the event pipeline facilities are not conveniently available, we intend to truck or barge crude oil to storage, refining or pipeline facilities.
The principal target customers for our gas production, if any, are expected to be pipelines, utilities, gas marketing firms, industrial users and local distribution companies. We intend to use existing gathering systems and interstate and intrastate pipelines to consummate gas sales and deliveries.
We intend to sell our oil and gas production, if any, under both short-term (less than one year) and long-term (one year or more) agreements at prices negotiated with third parties. Under both short-term and long-term contracts, typically either the entire contract (in the case of short-term contracts) or the price provisions of the contract (in the case of long-term contracts) are renegotiated from intervals ranging in frequency from daily to annually.
We have not yet adopted any specific sales and marketing plans. We will address the need to hire sales and marketing personnel if and when production begins.
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.
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/provincial, 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. Statutes and regulations require permits for drilling operations, drilling bonds and reports concerning wells. Alberta and other jurisdictions 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.
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 officer and director. We do not presently have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to our officers and directors.
Since our sole officer and director is not experienced with oil or gas exploration, we intend to retain qualified persons on a contract basis as needed from time to time to identify, evaluate and structure suitable oil and gas investment opportunities.
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.
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION.
Our shares trade on the OTCBB under the symbol "TEGC." Very limited trading activity has occurred during the past two years with our common stock; therefore, only limited historical price information is available. The following table sets forth the high and low bid prices of our common stock (USD) for the last two fiscal years and subsequent interim period, as reported by the National Quotation Bureau and represents inter dealer quotations, without retail mark-up, mark-down or commission and may not be reflective of actual transactions:
------------------------------- QUARTER ENDED HIGH LOW ------------------------------- August 31, 2010 $0.07 $0.07 May 31, 2010 $0.09 $0.04 February 28, 2010 $0.15 $0.05 November 30, 2009 $0.09 $0.05 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 ------------------------------- |
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., 512 SE
Salmon Street, Portland, Oregon 97214 (Telephone: 503.227.2950; Facsimile:
503.227.6874).
On November 10, 2009, the shareholders' list of our shares of common stock showed 29 registered holders of our shares of common stock and 680,202 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.
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. We plan to acquire undivided working interests in small exploration properties and non-operating interests in both producing and exploration projects throughout the United States and Canada. We do not presently own or have any interest in any oil or natural gas properties.
We have not earned any revenue since the date of our inception. Our capital has been obtained via the issuance of common stock and shareholder loans. We do not presently have sufficient working capital to satisfy our cash requirements for the next twelve months of operations. Our director has undertaken to provide such financing as may be required to maintain nominal operations.
We will require additional financing to pursue our business plan. We expect to obtain such financing through the issuance of debt instruments and the sale of our stock, but we cannot give any assurance that we will be able to obtain additional funding on commercially acceptable terms when it is required. If we fail to obtain the funding when it is needed, we may be required to forego or delay potentially valuable opportunities to acquire oil and gas interests, or we may default on future anticipated funding commitments to third parties and forfeit or dilute our rights in future anticipated oil and gas interests, or we may be required to cease operation altogether. We do not have any plans or contingencies in the event that we cease operating.
On November 25, 2009, we obtained an assignment of the conditional right to acquire a working interest in certain natural gas properties located in Alberta (the "Prospect") from the well operator (an independent third party), which was subject to Thrust providing up to $1,000,000 in financing for the completion of wells located on the Prospect. As consideration for the conditional right, we paid a total of $160,000 upon execution of the agreement, and were to issue 75 million common shares and 5 million preferred shares upon receiving a 4.9% working interest in wells to be completed on the Prospect. On January 22, 2010, the well operator informed us that we were in default of our contractual obligations.
As part of our negotiations with the well operator, we agreed to pay a further $100,000 CAD to the operator in respect of the Prospect. We paid a total of $25,000 CAD ($23,740) to the operator on February 8, 2010, but were unable to make any further payments. The payment to the operator was financed by a director of the Company.
We are actively pursuing recovery of our cash investment in the Prospect. The well operator is obligated to return $100,000 CAD to the Company by January 6, 2011. An additional $25,000 CAD is payable to us on demand without interest. No working interest or any other interest in the Prospect has been granted to Thrust Energy, and we are not pursuing the grant of any such interest related to the Prospect. As a result of conservatism, we have written off and expensed a total of $83,740 in costs relating to the acquisition of conditional rights to acquire an interest in the Prospect.
As of August 31, 2010, we had total assets of $94,960 comprised entirely of a cash receivable from the operator of the Prospect. This reflects a decrease of the value of our total assets from $177,741 on August 31, 2009, due to the write-off of costs relating to the acquisition of conditional rights to acquire an interest in the Prospect. Working capital was reduced, as at August 31, 2010, to $59,970 as compared to $174,950 on August 31, 2009.
As of August 31, 2010, our total liabilities increased to $34,990 from $2,791 as of August 31, 2009. The increase was primarily due to a cash loan from our director.
We do not expect to purchase or sell any significant equipment nor do we expect any significant changes in the number of our employees.
We plan to acquire undivided working interests in small exploration properties and non-operating interests in both producing and exploration projects throughout North America.
RESULTS OF OPERATIONS
We posted an operating loss of $114,980 for the fiscal year ending August 31, 2010, due primarily to $24,467 in professional fees and the write-off of $83,740 in costs associated with the acquisition of conditional oil exploration rights. This was consistent with the operating loss of $114,921 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, 2010 and 2009
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, 2010 and 2009 and the related statements of stockholders' equity, operations and cash flows for the years then ended and the cumulative period from September 15, 2004 (date of inception) to August 31, 2010. 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, 2010 and 2009 and the results of its operations and its cash flows for the years then ended and the cumulative period from September 15, 2004 (date of inception) to August 31, 2010, 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 26, 2010 Chartered Accountants
THRUST ENERGY CORP.
(An Exploration Stage Company)
Balance Sheets
August 31, 2010
(EXPRESSED IN U.S. DOLLARS)
---------------------------------------------------------------------------------------------------------
2010 2009
---------------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ - $ 177,741
Other receivable (Note 3) 94,960 -
---------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 94,960 $ 177,741
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 1,470 $ 2,791
Due to a related party 33,520 -
---------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 34,990 2,791
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STOCKHOLDERS' EQUITY
PREFERRED STOCK (NOTE 4)
100,000,000 preferred shares at a par value of $0.0001 per share
Issued and outstanding: None - -
COMMON STOCK (NOTE 4)
900,000,000 common shares at a par value of $0.0001 per share
Issued and outstanding: 680,202 common shares (August 31, 2009: 680,198) 68 68
ADDITIONAL PAID-IN CAPITAL 362,285 362,285
(DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (302,383) (187,403)
---------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 59,970 (174,950)
---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 94,960 $ 177,741
=========================================================================================================
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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, 2010
(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 - $ - 500,000 $ 50 $ 450 $ - $ - $ 500
Imputed interest from a shareholder - - - - 21 - - 21
Loss and comprehensive loss for the period - - - - - - (1,800) (1,800)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2005 - - 500,000 50 471 - (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 - - 500,000 50 1,221 165,000 (21,821) 144,450
------------------------------------------------------------------------------------------------------------------------------------
Share subscription received - - 180,198 18 360,377 (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 - - 680,198 68 362,285 - (45,024) 317,329
------------------------------------------------------------------------------------------------------------------------------------
Loss and comprehensive loss for the year - - - - - - (27,458) (27,458)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2008 - $ - 680,198 $ 68 $ 362,285 $ - $ (72,482) $ 289,871
------------------------------------------------------------------------------------------------------------------------------------
Loss and comprehensive loss for the year - - - - - - (114,921) (114,921)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2009 - $ - 680,198 $ 68 $ 362,285 $ - $ (187,403) $ 174,950
------------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for debt settlement
July 21, 2010, $0.10 per share - $ - 4 $ 0 $ 0 $ - $ - $ 0
Loss and comprehensive loss for the year - - - - - - (114,980) (114,980)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2010 - $ - 680,202 $ 68 $ 362,285 $ - $ (302,383) $ 59,970
====================================================================================================================================
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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, 2010 August 31, 2010 August 31, 2009
------------------------------------------------------------------------------------------------------------
EXPENSES
Accounting fees $ 41,795 $ 9,472 $ 7,750
Amortization 2,153 - -
Bank charges 377 51 -
Filing fees 2,171 - -
Business development 105,227 - 105,227
Interest 1,458 - -
Leases 3,547 - -
Legal 27,866 14,995 155
Office 8,959 2,180 1,100
Transfer agent 7,385 732 689
Write-off of oil & gas property (note 5) 97,635 83,740 -
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OPERATING LOSS 298,573 111,170 114,921
------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EXPENSES
Foreign exchange (gain)/loss 3,810 3,810 -
------------------------------------------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (302,383) $ (114,980) $ (114,921)
------------------------------------------------------------------------------------------------------------
BASIC AND DILUTED LOSS PER SHARE $ (0.17) $ (0.17)
============================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
- basic and diluted 680,198 680,198
============================================================================================================
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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, 2010 August 31, 2010 August 31, 2009
-----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Net (Loss) for the period $ (302,383) $ (114,980) $ (114,921)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
- amortization 2,153 - -
- imputed interest 1,458 - -
- foreign exchange loss 5,040 5,040 -
- write-off of oil & gas property 97,635 83,740 -
Changes in operating assets and liabilities
- increase in due to a related party 33,520 33,520 -
- increase (decrease) in accounts payable and accrued liabilities 1,470 (1,321) 1,100
-----------------------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (161,107) 5,999 (113,821)
-----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Acquisition of oil and gas interest (197,635) (183,740) -
Purchase equipment (2,153) - -
-----------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (199,788) (183,740) -
-----------------------------------------------------------------------------------------------------------------------
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)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 177,741 291,562
-----------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ - $ - $ 177,741
=======================================================================================================================
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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, 2010, 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, 2010 and 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 uninsured accounts.
Fair Value of Financial Instruments
ASC 820 "Fair Value Measurements and Disclosures" requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. ASC 820 establishes a fair value hierarchy based on the
level of independent, objective evidence surrounding the inputs used to measure
fair value. A financial instrument's categorization within the fair value
hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. ASC 820 prioritizes the inputs into three levels that
may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
The Company's financial instruments include cash and cash equivalents, other receivable, accounts payable and accrued liabilities and due to a related party. Fair values were assumed to approximate carrying value for these financial instruments, except where noted. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company is operating outside the United States of America and has significant exposure to foreign currency risk due to the fluctuation of currency in which the Company operates and U.S. dollars.
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 collectability is reasonably assured.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Net Loss per Common Share
We have adopted ASC 260, Earnings Per Share. ASC 260 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 ASC 220, Comprehensive Income. ASC 220 establishes standards for the reporting and display of comprehensive income or loss, requiring its components to be reported in a financial statement. For the years ended August 31, 2010 and 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 ASC 410, Asset Retirement and Environmental 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 ASC 718, Compensation - Stock-Based Compensation, 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. ASC 718 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, 2010 and 2009.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements
In June 2009, the FASB issued a standard that established the FASB Accounting Standards Codification ("ASC") which mended hierarchy of generally accepted accounting principles ("GAAP") such that the ASC became the single source of authoritative nongovernmental US GAAP. The ASC did not change current US GAAP, but was intended to simplify user access to all authoritative US GAAP by providing all the authoritative literature related to a particular topic in one place. All previously existing accounting standard documents were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates. The ASC was effective for the Company on September 1, 2009. This standard did not have an impact on our financial statements.
In December 2007, FASB issued ASC 850 (prior authoritative literature: SFAS No.
141(R), Business Combinations) and ASC 810-10-65 (prior authoritative
literature: SFAS No. 160, Accounting and Reporting of Noncontrolling Interest in
Consolidated Financial Statements, an amendment of ARB No. 51). These new
standards will significantly change the accounting for and reporting of business
combinations and non-controlling (minority) interests in consolidated financial
statements. ASC 805 and ASC 810-10-65 are required to be adopted simultaneously
and are effective for the first annual reporting period beginning on or after
December 15, 2008. Earlier adoption is prohibited. The Company has adopted these
new pronouncements on September 1, 2009. The adoption of ASC850 and ASC
810-10-65 did not have a material impact on the Company's financial position or
results of operations.
In March 2008, FASB issued ASC 815-10 (prior authoritative literature: SFAS 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133). ASC 815-10 requires enhanced disclosures about an entity's derivative and hedging activities. ASC 815-10 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. The Company adopted ASC 815-10 on September 1, 2009. The adoption of this ASC did not have a material impact on the Company's financial position or results of operations.
In April 2008, the FASB issued FSP FAS No. 142-3, Determination of the Useful Life of Intangible Assets , as codified in ASC subtopic 350-30, Intangibles - Goodwill and Other: General Intangibles Other than Goodwill (ASC 350-30) and ASC topic 275, Risks and Uncertainties (ASC 275), which amends the factors that must be considered in developing renewal or extension assumptions used to determine the useful life over which to amortize the cost of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets , as codified in ASC topic 350, Intangibles Goodwill and Other (ASC 350). ASC 350-30 requires an entity to consider its own assumptions about renewal or extension of the term of the arrangement, consistent with its expected use of the asset, and is an attempt to improve consistency between the useful life of a recognized intangible asset under ASC 350 and the period of expected cash flows used to measure the fair value of the asset under ASC 805, Business Combinations. The Company adopted ASC 350-30 on September 1, 2009. The adoption of ASC 350-30 did not have a material impact on the Company's financial position or results of operations.
In May 2008, FASB issued ASC 470, Debt. ASC 470 specifies that issuers of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) 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. We have adopted ASC 470 on September 1, 2009, and this standard was applied on a retrospective basis. The adoption of this statement did not have a material effect on the Company's financial statements.
In April, 2009, the FASB issued ASC subtopic 820-10 (formerly Staff Position No. 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). ASC 820-10 provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. This ASC subtopic also includes guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of ASC 820-10 will not have a material impact on the Company's financial statements. In April, 2009, the FASB issued ASC 820-10-50 (formerly Staff Position No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments) that expands to interim periods the existing annual requirement to disclose the fair value of financial instruments that are not reflected on the balance sheet at fair value. The new guidance could potentially require additional disclosures in interim periods after the Company's fiscal year ending 2010. Adoption of this FSP will not have a material impact on the Company's financial statements.
On April 1, 2009, the FASB issued ASC 320-10-65 (formerly Staff Position No. FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments). ASC 320-10-65 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. ASC 320-10-65 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The Company adopted ASC 320-10-65 on September 1, 2009. The adoption of this FSP did not have a material impact on the Company's financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements and Newly Adopted Accounting Policies
(continued)
In June 2009, the FASB issued ASC 860, Transfers and Servicing. ASC 860 requires more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a "qualifying special-purpose entity," changes the requirements for derecognizing financial assets, and requires additional disclosures. It also enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity's continuing involvement in transferred financial assets. ASC 860 is effective for fiscal years beginning after November 15, 2009.
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. ASU 2010-06 amends Subtopic 820-10 to clarify existing disclosures, require new disclosures, and includes conforming amendments to guidance on employers' disclosures about postretirement benefit plan assets. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company does not expect the adoption of ASU 2010-06 to have a material impact on its financial statements.
In February 2010, The FASB issued ASU 2010-09, Subsequent Events (Topic 855):
Amendments to Certain Recognition and Disclosure Requirements. ASU 2010-09
amends Topic 855 to exclude SEC reporting entities from the requirement to
disclose the date on which subsequent events have been evaluated. In addition,
it modifies the requirement to disclose the date on which subsequent events have
been evaluated in reissued financial statements to apply only to such statements
that have been restated to correct an error or to apply U.S. GAAP
retrospectively. The amendments are generally effective immediately, but with respect to the requirement that conduit obligors evaluate subsequent events through the date the financial statements are issued, the effective date is for interim or annual periods ending after June 15, 2010. The Company has adopted ASU 2010-09 with no material impact on the financial statements.
ASU No. 2010-13 was issued in April 2010, and clarified the classification of an employee share based payment award with an exercise price denominated in the currency of a market in which the underlying security trades. This ASU will be effective for the first fiscal quarter beginning after December 15, 2010, with early adoption permitted. The adoption of ASU No. 2010-13 is not expected to have a material impact on the Company's financial statements.
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 - WRITE-OFF OF GAS WELL OPTION
On November 25, 2009, the Company obtained an assignment of a conditional right to acquire a working interest in certain natural gas properties located in Alberta (the "Prospect") from the well operator (an independent third party), which was subject to the Company providing up to $1,000,000 in financing for the completion of wells located on the Prospect. As consideration for the conditional right, the Company paid a total of $160,000 upon execution of the agreement, and were to issue 75 million common shares and 5 million preferred shares upon receiving a 4.9% working interest in wells to be completed on the Prospect. On January 22, 2010, the well operator informed the Company that it was in default of its obligations.
As part of its negotiations with the well operator, the Company agreed to pay a further $100,000 CAD to the operator in respect of the Prospect. The Company paid a total of $25,000 CAD ($23,740) to the operator on February 8, 2010, but was unable to make any further payments. The payment to the operator was financed by a director of the Company.
The Company is actively pursuing recovery of its cash investment in the Prospect. The well operator is obligated to return $100,000 CAD to the Company by January 6, 2011. An additional $25,000 CAD is payable to the Company on demand without interest. No working interest or any other interest in the Prospect has been granted to the Company, and the Company is not pursuing the grant of any such interest related to the Prospect. As a result of conservatism, a total of $83,740 in costs relating to the acquisition of conditional rights to acquire an interest in the Prospect has been written off and expensed by the Company.
NOTE 4 - PREFERRED AND COMMON STOCK
We have 100,000,000 shares of preferred stock authorized and none issued.
We have 900,000,000 shares of common stock authorized. All shares of stock are non-assessable and non-cumulative, with no preemptive rights.
NOTE 5 - RELATED PARTY TRANSACTION
On February 8, 2010, the Company's sole director advanced the sum of $25,000 CAD ($23,740) on behalf of the Company to the operator of certain natural gas wells located in Alberta. The advance has been recorded by the Company as a non-interest bearing, unsecured loan by our sole director to Thrust that is due and payable on demand. As of August 31, 2010, the entire principal amount of the advance is still outstanding.
NOTE 6 - INCOME TAXES
At August 31, 2010, we had deferred tax assets of approximately $106,000 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, 2010. A reconciliation of income taxes at statutory rates with the reported taxes is as follows:
--------------------------------------------------------------------------------
August 31, 2010 August 31, 2009
--------------------------------------------------------------------------------
Net loss before income taxes $ 114,980 $ 114,921
Income tax recovery at statutory rates of 35% 40,243 40,222
Unrecognized benefits of non-capital losses (40,243) (40,222)
Total income tax recovery $ - $ -
--------------------------------------------------------------------------------
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The significant components of the deferred tax asset at August 31, 2010 were as follows:
--------------------------------------------------------------------
August 31, 2010 August 31, 2009
--------------------------------------------------------------------
Deferred tax assets:
Net operating loss carryforwards $ 106,000 $ 65,600
Valuation allowance (106,000) (65,600)
Net deferred tax asset $ - $ -
--------------------------------------------------------------------
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At August 31, 2010, we had net operating loss carryforwards of approximately $302,400, which expire in the year 2026 through 2030.
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, 2010, 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, 2010, 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, 2010. 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, 2010, 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, 2010:
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, 2010 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, 2010, 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.
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 ten-(10) 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, 2010 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, 2010 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 500,002 74 1440-3044 Bloor Street West Toronto, ON M8X 2Y8 --------------------------------------------------------------------- Directors and officers as a group (one person) 500,003 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
On February 8, 2010, our sole director advanced the sum of $25,000 CAD ($23,740) on our behalf to the operator of certain natural gas wells located in Alberta. We have recorded the advance as a non-interest bearing demand loan by our sole director to Thrust. As of August 31, 2010, the entire principal sum of the advance remains owing to our sole director.
No other material related party transactions between Thrust and its officers, directors or control persons occurred during the fiscal year ended August 31, 2010.
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, 2010 is estimated to be $5,500.
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 was $5,265.
AUDIT RELATED FEES
For the fiscal years ended August 31, 2010 and 2009, 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 4,201 and $2,500, respectively.
TAX FEES
For the fiscal years ended August 31, 2010 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, 2010 and 2009, 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 Amended and Restated Articles of Incorporation, Thrust Energy Corp.
3.2 Amended and Restated Bylaws, Thrust Energy Corp.
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 Certification 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 26, 2010 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, November 26, 2010
Thomas Mills Chief PrincipalAccounting Officer,
President & Director
|
AMENDED AND RESTATED BYLAWS
OF
THRUST ENERGY CORP.
ARTICLE I
STOCKHOLDER'S MEETINGS
01. PLACE OF MEETING. Meetings of Stockholders shall be held either at the principal executive office of the Corporation or at any other location within or without the State of Nevada which may be designated by written consent of all persons entitled to vote thereat.
02. ANNUAL MEETINGS. The annual meeting of Stockholders shall be held on such day and at such time and at such place as may be fixed by the Board of Directors; provided, however, that should said day fall upon a Saturday, Sunday, or legal holiday observed by the Corporation at its principal executive office, then any such meeting of Stockholders shall be held at the same time and place on the next day thereafter ensuing which is a full business day. At such meetings, directors shall be elected by plurality vote and any other proper business may be transacted.
03. SPECIAL MEETINGS. Special meetings of the stockholders may be called
for any purpose permitted by law at any time by the Board of Directors, the
President, the Secretary, or by stockholders entitled to cast, in the aggregate,
not less than twenty percent (20%) of the votes at such meeting. Upon request in
writing to the Chairman of the Board (if any), the President or the Secretary by
any person or persons entitled to call a special meeting of stockholders, the
Secretary shall cause notice to be given to the stockholders entitled to vote
that a special meeting will be held not less than ten (10) nor more than sixty
(60) days after the date of the notice. No business shall be transacted at any
special meeting of stockholders except as is specified in the notice calling for
said meeting. The Board of Directors may designate any place, either within or
without the State of Nevada, as the place of any special meeting called by the
Board of Directors, the President or the Secretary, and special meetings called
at the request of stockholders shall be held at such place in the State of
Nevada as may be determined by the Board of Directors and placed in the notice
of such meeting.
04. NOTICE OF MEETING. Written notice of each annual or special meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote thereat. Such notice shall state the place, date and hour of the meeting and (i) in the case of a special meeting the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the stockholders, but, any proper matter may be presented at the meeting for such action. The notice of any meeting at which directors are to be elected shall include the names of the nominees intended, at the time of the notice, to be presented by management for election. Notice of a stockholders' meeting shall be delivered by mail addressed to the stockholder at the address of such stockholder appearing on the books of the Corporation and an affidavit of mailing of such notice, executed by the Secretary, shall be prima facie evidence of the giving of the notice.
04. WAIVER OF NOTICE. Notice of the time, place, and purpose of any meeting may be waived in writing and will be waived by any stockholder by the stockholder's attendance thereat in person or by proxy. Any stockholder so waiving shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
05. QUORUM AND ADJOURNED MEETINGS. At all meetings of stockholders, except where otherwise provided by applicable law, or by the Articles of Incorporation, or by these bylaws, the presence, in person or by proxy duly authorized, of the holder or holders of not less than twenty percent (20%) of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
06. PROXIES. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by the stockholder's duly authorized attorney in fact. Such proxy shall be filed with the Secretary of the Corporation not less than five (5) days prior to the meeting. No proxy shall be valid after three (3) months from the date of its execution, unless otherwise provided in the proxy. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by the inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting.
07. RECORD DATE. The Board of Directors may fix in advance, a record date for the determination of the stockholders entitled to notice of a meeting or to vote or entitled to receive payment of any dividend or other distribution, or any allotment of rights, or to exercise rights in respect to any other lawful action. The record date so fixed shall be not more than sixty (60) nor less than ten (10) days prior to the date of the meeting nor more than sixty (60) days prior to any other action. When a record date is so fixed, only stockholders of record on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise of the rights, as the case may be, notwithstanding any transfer of shares on the books of the Corporation after the record date. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the Board of Directors fixes a new record date for the meeting. The Board of Directors shall fix a new record date if the meeting is adjourned for more than forty-five (45) days. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which notice is given. The record date for determining stockholders for any purpose other than as set in this Section or Section 09 of this Article shall be at the close of the day on which the Board of Directors adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later.
08. VOTING OF SHARES. Every stockholder of record shall be entitled at each meeting of the stockholders of the Corporation to one vote for each share of stock standing in the stockholder's name on the records of the Corporation, unless otherwise provided in the Articles of Incorporation or in the resolution providing for the issuance of the stock adopted by the Board of Directors pursuant to authority expressly vested in the Board of Directors by the provisions of the Articles of Incorporation. The affirmative vote of a majority of the shares represented at a meeting and entitled to vote thereat shall be necessary for the adoption of a motion or for the determination of all questions and business that come before the meeting, unless the question is one upon which by express provision of applicable law or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Upon demand of any stockholder in attendance at the meeting, the vote for directors and the vote upon any other question before the meeting shall be by ballot.
09. ACTION WITHOUT A MEETING. Any action that, under any provision of law, may be taken at any annual or special meeting of stockholders, may be taken without a meeting and without prior notice if a consent in writing, setting forth the actions to be taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless a record date for voting purposes is fixed as provided in Section 07 of this Article, the record date for determining stockholders entitled to give consent pursuant to this Section when no prior action by the Board of Directors has been taken, shall be the day on which the first written-consent is given.
10. CONSENT OF ABSENTEES. The transactions of any meeting of stockholders, however called and noticed, and wherever held, are as valid as though made at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
11. CONDUCT OF MEETING. The President shall preside as chairman at all meetings of the stockholders, unless another chairman is selected. The Chairman shall conduct each such meeting in accordance with businesslike and fair manner, but shall not be obligated to follow any technical, formal or parliamentary rules or principles of procedure. The Chairman's ruling on procedural matters shall be conclusive and binding on all stockholders, unless at the time of ruling a request for a vote is made by the stockholders entitled to vote and represented in person or by proxy at the meeting, in which case the decision of a majority of such shares shall be conclusive and binding on all stockholders without limiting the generality of the foregoing, the chairman shall have all the powers usually vested in the Chairman of a meeting of stockholders.
ARTICLE II
DIRECTORS
01. POWERS. Except as proscribed by applicable law, the Articles of Incorporation or these bylaws, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board of Directors may, as permitted by law, delegate the management of the day-to-day operation of the business of the Corporation to a management company or other persons or officers of the Corporation provided that the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board of Directors. Without prejudice to such general powers, it is hereby expressly declared that the Board of Directors shall have the following powers:
(a) to select and remove all of the officers, agents and employees of the Corporation, prescribe the powers and duties for them as may not be inconsistent with applicable law, or with the Articles of Incorporation or by these bylaws, fix their compensation, and require from them, if necessary, security for faithful service;
(b) to conduct, manage, and control the affairs and business of the Corporation and to make such rules and regulations therefore not inconsistent with law, with the Articles of Incorporation or these bylaws, as they may deem best;
(c) to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock and to alter the form of such seal and such of certificates from time to time in their judgment they deem best;
(d) to authorize the issuance of shares of stock of the Corporation from time to time, upon such terms and for such consideration as may be lawful; and
(e) to borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation or other evidence of debt and securities therefor.
02. NUMBER OF DIRECTORS. The authorized number of directors shall be not less than one (1) nor more than seven (7).
03. ELECTION AND TERM OF OFFICE. The directors shall be elected at each annual general meeting of the stockholders and except as proscribed by applicable law, the Articles of Incorporation or these bylaws, each director shall hold office until the next annual meeting of stockholders or until the director's successor has been elected and qualified. If for any reason directors are not elected at the annual meeting of the stockholders, they may be elected at any special meeting of the stockholders that is duly called and held for that purpose in the manner provided by these bylaws. Each director shall hold office after the expiration of the director's term until a successor is elected and qualified, or until the director resigns or is removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.
04. VACANCIES. Upon the occurrence of any vacancy in the Board of Directors including that caused by an increase in the authorized number of directors, the remaining director or directors (as the case may be), whether constituting a quorum or not, may elect a successor to hold office for the unexpired portion of the term of the director whose place is vacated, and until a successor is duly elected and qualified. A vacancy in the Board of Directors shall be deemed to exist in the case of the death, resignation or removal of any director, or if the authorized number of directors is increased, or if the stockholders fail at any annual or special meeting of stockholders at which any director is elected to elect the full authorized number of Directors to be voted for at the meeting. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the Board of Directors shall have power to elect a successor to take office when the resignation is to become effective. All vacancies, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, unless it is otherwise provided in the articles of incorporation. Unless otherwise provided in the Articles of Incorporation, if one or more directors gives notice of resignation to the Board of Directors, effective at a future date, the Board of Directors may fill the vacancy or vacancies to take effect when the resignation or resignations become effective; each director so appointed to hold office during the remainder of the term of office of the resigning director or directors.
05. RESIGNATION. Any Director may resign at any time by delivering written notice thereof to the Secretary of the Corporation.
06. ANNUAL MEETINGS. Immediately following each annual meeting of stockholders the Board of Directors shall hold a regular meeting for the purpose of organization, selection of a Chairman of the Board, election of officers, and the transaction of other business. Call and notice of such regular meeting is hereby dispensed with.
07. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such place and on such day and hour as may from time to time be fixed by resolution of the Board of Directors. No notice of regular meetings of the Board of Directors shall be necessary.
08. SPECIAL MEETINGS. A special meeting of the Board of Directors for any purpose may be called at any time by the Chairman of the Board, the President, the Secretary or a majority of the directors. Notice of the time and place of each special meeting shall be given by the Secretary, or the person or persons calling the meeting, by registered mail, registered courier, facsimile transmission, electronic mail or by personal communication by telephone or otherwise at least forty-eight (48) hours in advance of the time of the meeting. The purpose of the meeting need not be given in the notice. Notice of any special meeting may be waived in writing or by facsimile (either before or after such meeting) and will be deemed waived by any director in attendance at such meeting.
09. PLACE OF MEETING. Any meeting of the Board of Directors may be held at any place within or without the State of Nevada that has been designated from time to time by the Board of Directors. In the absence of such designation meetings shall be held at the principal executive office of the Corporation.
10. QUORUM. A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by applicable law or by the Articles of Incorporation. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the number of directors required as noted above to constitute a quorum for such meeting.
11. WAIVER OF NOTICE. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, are as valid as though had at a meeting duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made part of the minutes of the meeting.
12. ADJOURNMENT. A majority of the directors present, whether or not a
quorum is present, may adjourn any meeting of the Board of Directors to another
time and place. Notice of the time and place of holding an adjourned meeting
need not be given to absent directors if the time and place is fixed at the
meeting being adjourned. If the meeting is adjourned for more than forty-eight
(48) hours, notice of any adjournment to another time or place shall be given
prior to the time of the adjourned meeting to the directors who were not present
at the time of adjournment.
13. COMMITTEES. The Board of Directors may appoint one or more committees and delegate to any such committee any of the powers of the Board of Directors in the management of the business and affairs of the Corporation except with respect to:
(a) The approval of any action that requires stockholders' approval or approval of the outstanding shares;
(b) The filling of vacancies on the Board of Directors or on any committees;
(c) The fixing of compensation of the directors for serving on the Board of Directors or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
(e) The amendment or repeal of any resolution of the Board of Directors that by its express terms is not so amendable or repealable by a committee of the Board of Directors;
(f) A distribution to the stockholders of the Corporation; or
(g) The appointment of other committees of the Board of Directors or the members thereof.
Any such committee must be appointed by resolution adopted by a majority of the authorized number of directors and may be designated an Executive Committee or by such other name as the Board of Directors shall specify. The Board of Directors shall have the power to prescribe the manner in which proceedings of any such committee shall be conducted. Unless the Board of Directors or such committee shall otherwise provide, the regular or special meetings and other actions of any such committee shall be governed by the provisions of this Article applicable to meetings and actions of the Board of Directors. Minutes shall be kept of each meeting of each committee. Each committee must include at least one director, and the Board of Directors may appoint natural persons who are not directors to serve on committees.
The Board of Directors may designate one or more individuals as alternate members of a committee to replace any member who is disqualified or absent from a meeting of the committee. Unless the Board of Directors appoints alternate members, the member or members of a committee present at a meeting and not disqualified from voting, whether or not the member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of an absent or disqualified member of the committee.
14. CHAIRMAN OF BOARD OF DIRECTORS. The Board of Directors may, in its discretion, elect a chairman of the Board of Directors from its members; and, if a chairman has been elected, the Chairman shall, when present, preside at all meetings of the Board of Directors and the stockholders and shall have such other powers as the Board of Directors may prescribe.
15. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the Board of Directors or of any committee appointed by the Board of Directors may participate in a meeting of the Board of Directors or committee (as the case may be) by means of a telephone conference or similar methods of communication by which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.
16. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the Board of Directors or a committee appointed thereby may be taken without a meeting if, before or after the action, all the members of the Board of Directors or the committee (as the case may be) individually or collectively consent in writing to such action.
17. FEES AND COMPENSATION. Directors and members of committees appointed by the Board of Directors may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board of Directors.
ARTICLE III
OFFICERS
01. OFFICERS DESIGNATED. The officers of the Corporation shall be a president, a secretary and a treasurer, each of whom shall be elected by the Board of Directors. The corporation may also have, at the discretion of the Board of Directors, one or more vice presidents, one or more assistant vice presidents, one or more assistant secretaries, one or more assistant treasurers and such other officers as may be elected or appointed by the Board of Directors. Any office may be held by the same person, except if the Corporation has more than one director, the offices of president and secretary shall be held by different persons.
02. ELECTION, QUALIFICATION AND TERM OF OFFICE. Each of the officers shall be elected annually by, and shall serve at the pleasure of, the Board of Directors, and shall hold their respective offices until their resignation, removal or other disqualification from service, or until their respective successors shall be elected.
03. POWERS AND DUTIES. The powers and duties of the respective corporate officers shall be as follows:
(a) PRESIDENT. The President is the Chief Executive Officer of the Corporation and, subject to the direction and control of the Board of Directors, shall have general supervision over the property, business and affairs of the Corporation. In the absence of the Chairman of the Board, and if the President is also a director of the Corporation, the President shall, when present, preside at all meetings of the stockholders, the Board of Directors and any committee appointed by the Board of Directors. The President shall sign such contacts, documents or instruments in writing as require such signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to the President by resolution of the Board of Directors or as are incident to the office of president.
(b) SECRETARY. The Secretary shall:
i. keep the minutes of the stockholder's and of the Board of Directors meetings in one or more books provided for that purpose;
ii. ensure that all notices are duly given in accordance with the provisions of these bylaws or as required by law;
iii. act as custodian of the corporate records and of the seal of the Corporation and affix the seal of the Corporation to all documents as may be required;
iv. keep a register of the post office address of each stockholder which shall be furnished to the Secretary by such stockholder;
v. sign with the President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors;
vi. have general charge of the stock transfer books of the Corporation; and,
vii. in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to the Secretary by the President or by the Board of Directors.
(c) TREASURER. The Treasurer is the Chief Financial Officer of the Corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and financial-transactions of the Corporation, and shall send or cause to be sent to the stockholders of the Corporation such financial statements and reports as are by law or these bylaws required to be sent to them. The Treasurer shall deposit all funds and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and the Board of Directors, whenever they request it, an account of all transactions as Treasurer and of the financial conditions of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors.
04. REMOVAL. The Board of Directors shall have the right to remove any officer whenever in its judgment the best interest of the Corporation will be served thereby.
05. VACANCIES. The Board of Directors shall fill any office that becomes vacant with a successor who shall hold office for the unexpired term and until a successor is duly elected and qualified.
06. SALARIES. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.
07. AGENTS. The President or Treasurer may appoint agents with power and authority, as defined or limited in their appointment, for and on behalf of the Corporation to execute and deliver, and affix the seal of the Corporation thereto, to bonds, undertakings, recognizance, consents of surety or other written obligations in the nature thereof and any said officers may remove any such agent and revoke the power and authority given to him.
ARTICLE IV
SHARE CERTIFICATES AND CAPITAL STOCK
01. FORM AND EXECUTION OF CERTIFICATES. Certificates for shares of the capital stock of the Corporation shall be in such form as is consistent with the provisions of the Nevada Revised Statutes. They shall be signed by the President and by the Secretary, and the seal of the Corporation shall be affixed thereto. The Corporation shall not issue certificates for a fraction of a share, but shall instead issue such additional fraction of a share as is necessary to increase the fractional share to a full share. If the Corporation is authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative participating, optional or other special rights of the various classes of shares or series thereof and the qualifications, limitations or restrictions of such rights, shall be set forth in full or summarized on the face or the back of the certificate, which the Corporation shall issue to represent such shares.
02. TRANSFERS. Shares may be transferred by delivery of the certificates therefor, accompanied either by an assignment in writing on the back of the certificates or by a written power of attorney to assign and transfer the same signed by the record holder of the certificate. Except as otherwise specifically provided in these bylaws, no shares shall be transferred on the books of the Corporation until the outstanding certificate therefor has been surrendered to the Corporation.
03. LOSS OR DESTRUCTION OF CERTIFICATES. If any certificate of shares is lost or destroyed, another certificate may be issued in its place upon proof of such loss or destruction and upon the giving of a satisfactory bond of indemnity to the Corporation. A new certificate may be issued without requiring any bond, when in the judgment of the Board of Directors it is proper to do so.
04. FACSIMILE SIGNATURES. If a certificate is signed by a transfer agent other than the Corporation or its employees, the signatures of the officers of the Corporation may be facsimiles. If any officer who has signed or whose facsimile signature has been placed upon a certificate ceases to be such officer before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer. The seal of the Corporation, or a facsimile thereof, may, but need not be, affixed to certificates of shares.
05. REGISTERED OWNER. The Corporation shall be entitled to recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and distribution, and the Corporation shall not be bound to recognize any equitable or other claim or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE V
BOOKS AND RECORDS
01. BOOKS OF ACCOUNTS, MINUTES AND SHARE REGISTER. The Corporation shall keep complete books and records of accounts and minutes of the proceedings of the Board of Directors and stockholders and shall keep at its registered office, principal place of business, or at the office of its transfer agent or registrar a share register giving the names of the stockholders in alphabetical order and showing their respective addresses and the number of shares held by each.
02. COPIES OF RESOLUTIONS. Any person dealing with the Corporation may rely upon a copy of any of the records of the proceedings, resolutions, or votes of the Board of Directors or stockholders, when certified by the President or the Secretary.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
01. INDEMNIFICATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, trustee, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgment, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action proceeding, had reasonable cause to believe that such person's conduct was unlawful.
02. DERIVATIVE ACTION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in the Corporation's favor by reason of the fact that such person is or was a director, trustee, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees) and amount paid in settlement actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to amounts paid in settlement, the settlement of the suit or action was in the best interests of the Corporation; provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence or willful misconduct in the performance of such person's duty to the Corporation unless and only to the extent that, the court in which such action or suit was brought shall determine upon application that, despite circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper. The termination of any action or suit by judgment or settlement shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation.
03. SUCCESSFUL DEFENSE. To the extent that a director, trustee, officer, employee or agent of the Corporation has been successful on the merits or otherwise, in whole or in part in defense of any action, suit or proceeding referred to in Sections 01 or 02 of this Article, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.
04. AUTHORIZATION. Any indemnification under Sections 01 and 02 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, trustee, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Sections 01 and 02 of this Article. Such determination shall be made (a) by the Board of Directors of the Corporation by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) is such a quorum is not obtainable, by a majority vote of the directors who were not parties to such action, suit or proceeding, or (c) by independent legal counsel (selected by one or more of the directors, whether or not a quorum and whether or not disinterested) in a written opinion, or (d) by the stockholders. Anyone making such a determination under this Section 04 may determine that a person has met the standards therein set forth as to some claims, issues or matters but not as to others, and may reasonably prorate amounts to be paid as indemnification.
05. ADVANCES. Expenses incurred in defending civil or criminal action, suit or proceeding shall be paid by the Corporation, at any time or from time to time in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in Section 04 of this Article upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee or agent to repay such amount unless it shall ultimately be by the Corporation as authorized in this Section.
06. NONEXCLUSIVITY. The indemnification provided in this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any law, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
07. INSURANCE. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, trustee, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability assessed against such person in any such capacity or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability.
08. FURTHER BYLAWS. The Board of Directors may from time to time adopt further bylaws with specific respect to indemnification and may amend these and such bylaws to provide at all times the fullest indemnification permitted by the Nevada Revised Statutes.
ARTICLE VII
AMENDMENT
These bylaws may only be amended, altered, or repealed by the affirmative vote of a majority of the entire Board of Directors at any regular or special meeting of the Board of Directors.
ARTICLE VIII
GENERAL PROVISIONS
01. REGISTERED OFFICE. The registered office of the Corporation shall be in Carson City, State of Nevada. The Corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the Corporation may require.
02. FISCAL YEAR. The fiscal year of the Corporation shall be set by resolution of the Board of Directors.
03. DISTRIBUTIONS. Subject to applicable law and the Articles of Incorporation, distributions upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting thereof and paid in cash, in property or in shares of capital stock.
04. RESERVES. Before payment of any distribution, there may be set aside out of any funds of the Corporation available for distributions such sum or sums as the Board of Directors may from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing distributions or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors deems conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
05. CHECKS AND NOTES. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
06. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The President or any other officer expressly authorized by the Board of Directors or the President are authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation standing in the name of the Corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by said officer.
AMENDED AND RESTATED BYLAWS
OF
THRUST ENERGY CORP.
ARTICLE I
STOCKHOLDER'S MEETINGS
01. PLACE OF MEETING. Meetings of Stockholders shall be held either at the principal executive office of the Corporation or at any other location within or without the State of Nevada which may be designated by written consent of all persons entitled to vote thereat.
02. ANNUAL MEETINGS. The annual meeting of Stockholders shall be held on such day and at such time and at such place as may be fixed by the Board of Directors; provided, however, that should said day fall upon a Saturday, Sunday, or legal holiday observed by the Corporation at its principal executive office, then any such meeting of Stockholders shall be held at the same time and place on the next day thereafter ensuing which is a full business day. At such meetings, directors shall be elected by plurality vote and any other proper business may be transacted.
03. SPECIAL MEETINGS. Special meetings of the stockholders may be called
for any purpose permitted by law at any time by the Board of Directors, the
President, the Secretary, or by stockholders entitled to cast, in the aggregate,
not less than twenty percent (20%) of the votes at such meeting. Upon request in
writing to the Chairman of the Board (if any), the President or the Secretary by
any person or persons entitled to call a special meeting of stockholders, the
Secretary shall cause notice to be given to the stockholders entitled to vote
that a special meeting will be held not less than ten (10) nor more than sixty
(60) days after the date of the notice. No business shall be transacted at any
special meeting of stockholders except as is specified in the notice calling for
said meeting. The Board of Directors may designate any place, either within or
without the State of Nevada, as the place of any special meeting called by the
Board of Directors, the President or the Secretary, and special meetings called
at the request of stockholders shall be held at such place in the State of
Nevada as may be determined by the Board of Directors and placed in the notice
of such meeting.
04. NOTICE OF MEETING. Written notice of each annual or special meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote thereat. Such notice shall state the place, date and hour of the meeting and (i) in the case of a special meeting the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the stockholders, but, any proper matter may be presented at the meeting for such action. The notice of any meeting at which directors are to be elected shall include the names of the nominees intended, at the time of the notice, to be presented by management for election. Notice of a stockholders' meeting shall be delivered by mail addressed to the stockholder at the address of such stockholder appearing on the books of the Corporation and an affidavit of mailing of such notice, executed by the Secretary, shall be prima facie evidence of the giving of the notice.
04. WAIVER OF NOTICE. Notice of the time, place, and purpose of any meeting may be waived in writing and will be waived by any stockholder by the stockholder's attendance thereat in person or by proxy. Any stockholder so waiving shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
05. QUORUM AND ADJOURNED MEETINGS. At all meetings of stockholders, except where otherwise provided by applicable law, or by the Articles of Incorporation, or by these bylaws, the presence, in person or by proxy duly authorized, of the holder or holders of not less than twenty percent (20%) of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
06. PROXIES. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by the stockholder's duly authorized attorney in fact. Such proxy shall be filed with the Secretary of the Corporation not less than five (5) days prior to the meeting. No proxy shall be valid after three (3) months from the date of its execution, unless otherwise provided in the proxy. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by the inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting.
07. RECORD DATE. The Board of Directors may fix in advance, a record date for the determination of the stockholders entitled to notice of a meeting or to vote or entitled to receive payment of any dividend or other distribution, or any allotment of rights, or to exercise rights in respect to any other lawful action. The record date so fixed shall be not more than sixty (60) nor less than ten (10) days prior to the date of the meeting nor more than sixty (60) days prior to any other action. When a record date is so fixed, only stockholders of record on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise of the rights, as the case may be, notwithstanding any transfer of shares on the books of the Corporation after the record date. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the Board of Directors fixes a new record date for the meeting. The Board of Directors shall fix a new record date if the meeting is adjourned for more than forty-five (45) days. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which notice is given. The record date for determining stockholders for any purpose other than as set in this Section or Section 09 of this Article shall be at the close of the day on which the Board of Directors adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later.
08. VOTING OF SHARES. Every stockholder of record shall be entitled at each meeting of the stockholders of the Corporation to one vote for each share of stock standing in the stockholder's name on the records of the Corporation, unless otherwise provided in the Articles of Incorporation or in the resolution providing for the issuance of the stock adopted by the Board of Directors pursuant to authority expressly vested in the Board of Directors by the provisions of the Articles of Incorporation. The affirmative vote of a majority of the shares represented at a meeting and entitled to vote thereat shall be necessary for the adoption of a motion or for the determination of all questions and business that come before the meeting, unless the question is one upon which by express provision of applicable law or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Upon demand of any stockholder in attendance at the meeting, the vote for directors and the vote upon any other question before the meeting shall be by ballot.
09. ACTION WITHOUT A MEETING. Any action that, under any provision of law, may be taken at any annual or special meeting of stockholders, may be taken without a meeting and without prior notice if a consent in writing, setting forth the actions to be taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless a record date for voting purposes is fixed as provided in Section 07 of this Article, the record date for determining stockholders entitled to give consent pursuant to this Section when no prior action by the Board of Directors has been taken, shall be the day on which the first written-consent is given.
10. CONSENT OF ABSENTEES. The transactions of any meeting of stockholders, however called and noticed, and wherever held, are as valid as though made at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
11. CONDUCT OF MEETING. The President shall preside as chairman at all meetings of the stockholders, unless another chairman is selected. The Chairman shall conduct each such meeting in accordance with businesslike and fair manner, but shall not be obligated to follow any technical, formal or parliamentary rules or principles of procedure. The Chairman's ruling on procedural matters shall be conclusive and binding on all stockholders, unless at the time of ruling a request for a vote is made by the stockholders entitled to vote and represented in person or by proxy at the meeting, in which case the decision of a majority of such shares shall be conclusive and binding on all stockholders without limiting the generality of the foregoing, the chairman shall have all the powers usually vested in the Chairman of a meeting of stockholders.
ARTICLE II
DIRECTORS
01. POWERS. Except as proscribed by applicable law, the Articles of Incorporation or these bylaws, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board of Directors may, as permitted by law, delegate the management of the day-to-day operation of the business of the Corporation to a management company or other persons or officers of the Corporation provided that the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board of Directors. Without prejudice to such general powers, it is hereby expressly declared that the Board of Directors shall have the following powers:
(a) to select and remove all of the officers, agents and employees of the Corporation, prescribe the powers and duties for them as may not be inconsistent with applicable law, or with the Articles of Incorporation or by these bylaws, fix their compensation, and require from them, if necessary, security for faithful service;
(b) to conduct, manage, and control the affairs and business of the Corporation and to make such rules and regulations therefore not inconsistent with law, with the Articles of Incorporation or these bylaws, as they may deem best;
(c) to adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock and to alter the form of such seal and such of certificates from time to time in their judgment they deem best;
(d) to authorize the issuance of shares of stock of the Corporation from time to time, upon such terms and for such consideration as may be lawful; and
(e) to borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation or other evidence of debt and securities therefor.
02. NUMBER OF DIRECTORS. The authorized number of directors shall be not less than one (1) nor more than seven (7).
03. ELECTION AND TERM OF OFFICE. The directors shall be elected at each annual general meeting of the stockholders and except as proscribed by applicable law, the Articles of Incorporation or these bylaws, each director shall hold office until the next annual meeting of stockholders or until the director's successor has been elected and qualified. If for any reason directors are not elected at the annual meeting of the stockholders, they may be elected at any special meeting of the stockholders that is duly called and held for that purpose in the manner provided by these bylaws. Each director shall hold office after the expiration of the director's term until a successor is elected and qualified, or until the director resigns or is removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.
04. VACANCIES. Upon the occurrence of any vacancy in the Board of Directors including that caused by an increase in the authorized number of directors, the remaining director or directors (as the case may be), whether constituting a quorum or not, may elect a successor to hold office for the unexpired portion of the term of the director whose place is vacated, and until a successor is duly elected and qualified. A vacancy in the Board of Directors shall be deemed to exist in the case of the death, resignation or removal of any director, or if the authorized number of directors is increased, or if the stockholders fail at any annual or special meeting of stockholders at which any director is elected to elect the full authorized number of Directors to be voted for at the meeting. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the Board of Directors shall have power to elect a successor to take office when the resignation is to become effective. All vacancies, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, unless it is otherwise provided in the articles of incorporation. Unless otherwise provided in the Articles of Incorporation, if one or more directors gives notice of resignation to the Board of Directors, effective at a future date, the Board of Directors may fill the vacancy or vacancies to take effect when the resignation or resignations become effective; each director so appointed to hold office during the remainder of the term of office of the resigning director or directors.
05. RESIGNATION. Any Director may resign at any time by delivering written notice thereof to the Secretary of the Corporation.
06. ANNUAL MEETINGS. Immediately following each annual meeting of stockholders the Board of Directors shall hold a regular meeting for the purpose of organization, selection of a Chairman of the Board, election of officers, and the transaction of other business. Call and notice of such regular meeting is hereby dispensed with.
07. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such place and on such day and hour as may from time to time be fixed by resolution of the Board of Directors. No notice of regular meetings of the Board of Directors shall be necessary.
08. SPECIAL MEETINGS. A special meeting of the Board of Directors for any purpose may be called at any time by the Chairman of the Board, the President, the Secretary or a majority of the directors. Notice of the time and place of each special meeting shall be given by the Secretary, or the person or persons calling the meeting, by registered mail, registered courier, facsimile transmission, electronic mail or by personal communication by telephone or otherwise at least forty-eight (48) hours in advance of the time of the meeting. The purpose of the meeting need not be given in the notice. Notice of any special meeting may be waived in writing or by facsimile (either before or after such meeting) and will be deemed waived by any director in attendance at such meeting.
09. PLACE OF MEETING. Any meeting of the Board of Directors may be held at any place within or without the State of Nevada that has been designated from time to time by the Board of Directors. In the absence of such designation meetings shall be held at the principal executive office of the Corporation.
10. QUORUM. A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by applicable law or by the Articles of Incorporation. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the number of directors required as noted above to constitute a quorum for such meeting.
11. WAIVER OF NOTICE. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, are as valid as though had at a meeting duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made part of the minutes of the meeting.
12. ADJOURNMENT. A majority of the directors present, whether or not a
quorum is present, may adjourn any meeting of the Board of Directors to another
time and place. Notice of the time and place of holding an adjourned meeting
need not be given to absent directors if the time and place is fixed at the
meeting being adjourned. If the meeting is adjourned for more than forty-eight
(48) hours, notice of any adjournment to another time or place shall be given
prior to the time of the adjourned meeting to the directors who were not present
at the time of adjournment.
13. COMMITTEES. The Board of Directors may appoint one or more committees and delegate to any such committee any of the powers of the Board of Directors in the management of the business and affairs of the Corporation except with respect to:
(a) The approval of any action that requires stockholders' approval or approval of the outstanding shares;
(b) The filling of vacancies on the Board of Directors or on any committees;
(c) The fixing of compensation of the directors for serving on the Board of Directors or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
(e) The amendment or repeal of any resolution of the Board of Directors that by its express terms is not so amendable or repealable by a committee of the Board of Directors;
(f) A distribution to the stockholders of the Corporation; or
(g) The appointment of other committees of the Board of Directors or the members thereof.
Any such committee must be appointed by resolution adopted by a majority of the authorized number of directors and may be designated an Executive Committee or by such other name as the Board of Directors shall specify. The Board of Directors shall have the power to prescribe the manner in which proceedings of any such committee shall be conducted. Unless the Board of Directors or such committee shall otherwise provide, the regular or special meetings and other actions of any such committee shall be governed by the provisions of this Article applicable to meetings and actions of the Board of Directors. Minutes shall be kept of each meeting of each committee. Each committee must include at least one director, and the Board of Directors may appoint natural persons who are not directors to serve on committees.
The Board of Directors may designate one or more individuals as alternate members of a committee to replace any member who is disqualified or absent from a meeting of the committee. Unless the Board of Directors appoints alternate members, the member or members of a committee present at a meeting and not disqualified from voting, whether or not the member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of an absent or disqualified member of the committee.
14. CHAIRMAN OF BOARD OF DIRECTORS. The Board of Directors may, in its discretion, elect a chairman of the Board of Directors from its members; and, if a chairman has been elected, the Chairman shall, when present, preside at all meetings of the Board of Directors and the stockholders and shall have such other powers as the Board of Directors may prescribe.
15. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the Board of Directors or of any committee appointed by the Board of Directors may participate in a meeting of the Board of Directors or committee (as the case may be) by means of a telephone conference or similar methods of communication by which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.
16. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the Board of Directors or a committee appointed thereby may be taken without a meeting if, before or after the action, all the members of the Board of Directors or the committee (as the case may be) individually or collectively consent in writing to such action.
17. FEES AND COMPENSATION. Directors and members of committees appointed by the Board of Directors may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board of Directors.
ARTICLE III
OFFICERS
01. OFFICERS DESIGNATED. The officers of the Corporation shall be a president, a secretary and a treasurer, each of whom shall be elected by the Board of Directors. The corporation may also have, at the discretion of the Board of Directors, one or more vice presidents, one or more assistant vice presidents, one or more assistant secretaries, one or more assistant treasurers and such other officers as may be elected or appointed by the Board of Directors. Any office may be held by the same person, except if the Corporation has more than one director, the offices of president and secretary shall be held by different persons.
02. ELECTION, QUALIFICATION AND TERM OF OFFICE. Each of the officers shall be elected annually by, and shall serve at the pleasure of, the Board of Directors, and shall hold their respective offices until their resignation, removal or other disqualification from service, or until their respective successors shall be elected.
03. POWERS AND DUTIES. The powers and duties of the respective corporate officers shall be as follows:
(a) PRESIDENT. The President is the Chief Executive Officer of the Corporation and, subject to the direction and control of the Board of Directors, shall have general supervision over the property, business and affairs of the Corporation. In the absence of the Chairman of the Board, and if the President is also a director of the Corporation, the President shall, when present, preside at all meetings of the stockholders, the Board of Directors and any committee appointed by the Board of Directors. The President shall sign such contacts, documents or instruments in writing as require such signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to the President by resolution of the Board of Directors or as are incident to the office of president.
(b) SECRETARY. The Secretary shall:
i. keep the minutes of the stockholder's and of the Board of Directors meetings in one or more books provided for that purpose;
ii. ensure that all notices are duly given in accordance with the provisions of these bylaws or as required by law;
iii. act as custodian of the corporate records and of the seal of the Corporation and affix the seal of the Corporation to all documents as may be required;
iv. keep a register of the post office address of each stockholder which shall be furnished to the Secretary by such stockholder;
v. sign with the President, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors;
vi. have general charge of the stock transfer books of the Corporation; and,
vii. in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to the Secretary by the President or by the Board of Directors.
(c) TREASURER. The Treasurer is the Chief Financial Officer of the Corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and financial-transactions of the Corporation, and shall send or cause to be sent to the stockholders of the Corporation such financial statements and reports as are by law or these bylaws required to be sent to them. The Treasurer shall deposit all funds and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and the Board of Directors, whenever they request it, an account of all transactions as Treasurer and of the financial conditions of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors.
04. REMOVAL. The Board of Directors shall have the right to remove any officer whenever in its judgment the best interest of the Corporation will be served thereby.
05. VACANCIES. The Board of Directors shall fill any office that becomes vacant with a successor who shall hold office for the unexpired term and until a successor is duly elected and qualified.
06. SALARIES. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.
07. AGENTS. The President or Treasurer may appoint agents with power and authority, as defined or limited in their appointment, for and on behalf of the Corporation to execute and deliver, and affix the seal of the Corporation thereto, to bonds, undertakings, recognizance, consents of surety or other written obligations in the nature thereof and any said officers may remove any such agent and revoke the power and authority given to him.
ARTICLE IV
SHARE CERTIFICATES AND CAPITAL STOCK
01. FORM AND EXECUTION OF CERTIFICATES. Certificates for shares of the capital stock of the Corporation shall be in such form as is consistent with the provisions of the Nevada Revised Statutes. They shall be signed by the President and by the Secretary, and the seal of the Corporation shall be affixed thereto. The Corporation shall not issue certificates for a fraction of a share, but shall instead issue such additional fraction of a share as is necessary to increase the fractional share to a full share. If the Corporation is authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative participating, optional or other special rights of the various classes of shares or series thereof and the qualifications, limitations or restrictions of such rights, shall be set forth in full or summarized on the face or the back of the certificate, which the Corporation shall issue to represent such shares.
02. TRANSFERS. Shares may be transferred by delivery of the certificates therefor, accompanied either by an assignment in writing on the back of the certificates or by a written power of attorney to assign and transfer the same signed by the record holder of the certificate. Except as otherwise specifically provided in these bylaws, no shares shall be transferred on the books of the Corporation until the outstanding certificate therefor has been surrendered to the Corporation.
03. LOSS OR DESTRUCTION OF CERTIFICATES. If any certificate of shares is lost or destroyed, another certificate may be issued in its place upon proof of such loss or destruction and upon the giving of a satisfactory bond of indemnity to the Corporation. A new certificate may be issued without requiring any bond, when in the judgment of the Board of Directors it is proper to do so.
04. FACSIMILE SIGNATURES. If a certificate is signed by a transfer agent other than the Corporation or its employees, the signatures of the officers of the Corporation may be facsimiles. If any officer who has signed or whose facsimile signature has been placed upon a certificate ceases to be such officer before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer. The seal of the Corporation, or a facsimile thereof, may, but need not be, affixed to certificates of shares.
05. REGISTERED OWNER. The Corporation shall be entitled to recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and distribution, and the Corporation shall not be bound to recognize any equitable or other claim or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE V
BOOKS AND RECORDS
01. BOOKS OF ACCOUNTS, MINUTES AND SHARE REGISTER. The Corporation shall keep complete books and records of accounts and minutes of the proceedings of the Board of Directors and stockholders and shall keep at its registered office, principal place of business, or at the office of its transfer agent or registrar a share register giving the names of the stockholders in alphabetical order and showing their respective addresses and the number of shares held by each.
02. COPIES OF RESOLUTIONS. Any person dealing with the Corporation may rely upon a copy of any of the records of the proceedings, resolutions, or votes of the Board of Directors or stockholders, when certified by the President or the Secretary.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
01. INDEMNIFICATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, trustee, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgment, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action proceeding, had reasonable cause to believe that such person's conduct was unlawful.
02. DERIVATIVE ACTION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in the Corporation's favor by reason of the fact that such person is or was a director, trustee, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees) and amount paid in settlement actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to amounts paid in settlement, the settlement of the suit or action was in the best interests of the Corporation; provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence or willful misconduct in the performance of such person's duty to the Corporation unless and only to the extent that, the court in which such action or suit was brought shall determine upon application that, despite circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper. The termination of any action or suit by judgment or settlement shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation.
03. SUCCESSFUL DEFENSE. To the extent that a director, trustee, officer, employee or agent of the Corporation has been successful on the merits or otherwise, in whole or in part in defense of any action, suit or proceeding referred to in Sections 01 or 02 of this Article, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.
04. AUTHORIZATION. Any indemnification under Sections 01 and 02 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, trustee, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Sections 01 and 02 of this Article. Such determination shall be made (a) by the Board of Directors of the Corporation by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) is such a quorum is not obtainable, by a majority vote of the directors who were not parties to such action, suit or proceeding, or (c) by independent legal counsel (selected by one or more of the directors, whether or not a quorum and whether or not disinterested) in a written opinion, or (d) by the stockholders. Anyone making such a determination under this Section 04 may determine that a person has met the standards therein set forth as to some claims, issues or matters but not as to others, and may reasonably prorate amounts to be paid as indemnification.
05. ADVANCES. Expenses incurred in defending civil or criminal action, suit or proceeding shall be paid by the Corporation, at any time or from time to time in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in Section 04 of this Article upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee or agent to repay such amount unless it shall ultimately be by the Corporation as authorized in this Section.
06. NONEXCLUSIVITY. The indemnification provided in this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any law, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
07. INSURANCE. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, trustee, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability assessed against such person in any such capacity or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability.
08. FURTHER BYLAWS. The Board of Directors may from time to time adopt further bylaws with specific respect to indemnification and may amend these and such bylaws to provide at all times the fullest indemnification permitted by the Nevada Revised Statutes.
ARTICLE VII
AMENDMENT
These bylaws may only be amended, altered, or repealed by the affirmative vote of a majority of the entire Board of Directors at any regular or special meeting of the Board of Directors.
ARTICLE VIII
GENERAL PROVISIONS
01. REGISTERED OFFICE. The registered office of the Corporation shall be in Carson City, State of Nevada. The Corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the Corporation may require.
02. FISCAL YEAR. The fiscal year of the Corporation shall be set by resolution of the Board of Directors.
03. DISTRIBUTIONS. Subject to applicable law and the Articles of Incorporation, distributions upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting thereof and paid in cash, in property or in shares of capital stock.
04. RESERVES. Before payment of any distribution, there may be set aside out of any funds of the Corporation available for distributions such sum or sums as the Board of Directors may from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing distributions or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors deems conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
05. CHECKS AND NOTES. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
06. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The President or any other officer expressly authorized by the Board of Directors or the President are authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation standing in the name of the Corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by said officer.
Exhibit 31.1
CERTIFICATION
I, Thomas E. Mills, certify that:
1. I have reviewed this annual report on Form 10-K of Thrust Energy Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the small business issuer's board of directors:
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
November 27, 2010
By /s/ Thomas Mills Thomas E. Mills President, Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer |
Exhibit 32.1
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Thrust Energy Corp. on Form 10-K for the
year ended August 31, 2010 as filed with the Securities and Exchange Commission
on the date hereof (the Report), I, Thomas E. Mills, President, Chief Executive
Officer, Chief Financial Officer and Principal Accounting Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 27, 2010 By /s/ Thomas Mills Thomas E. Mills Chief Executive Officer, President, Chief Financial Officer and Principal Accounting Officer |