PART I -- FINANCIAL INFORMATION PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS <TABLE> <CAPTION> THRUST ENERGY CORP. (An Exploration Stage Company) Balance Sheets May 31, 2008 (Unaudited - prepared by management) (EXPRESSED IN U.S. DOLLARS) ----------------------------------------------------------------------------------------- MAY 31 AUGUST 31 2008 2007 ----------------------------------------------------------------------------------------- <S> <C> <C> ASSETS CURRENT ASSETS Cash and cash equivalents $291,618 $300,123 Prepaid Expenses 603 2,235 ----------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 292,221 302,358 ----------------------------------------------------------------------------------------- OIL & GAS PROPERTY - UNPROVED 13,894 13,894 ----------------------------------------------------------------------------------------- EQUIPMENT, net of accumulated amortization of $1,884 269 1,077 ----------------------------------------------------------------------------------------- TOTAL ASSETS $306,384 $317,329 ========================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 358 $ - ----------------------------------------------------------------------------------------- Total current liabilities 358 - CONTINGENCIES AND COMMITMENTS (NOTE 5) STOCKHOLDERS' EQUITY PREFERRED STOCK 5,000,000 preferred shares at a par value of $0.0001 per share Issued and outstanding: None - - COMMON STOCK 100,000,000 common shares at a par value of $0.0001 per share Issued and outstanding: 13,603,950 common shares 860 860 ADDITIONAL PAID-IN CAPITAL 361,493 361,493 (DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (56,327) (45,024) ----------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 306,026 317,329 ----------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $306,384 $317,329 ========================================================================================= </TABLE> THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. <TABLE> <CAPTION> THRUST ENERGY CORP. (An Exploration Stage Company) Statements of Stockholders' Equity For the period from September 15, 2004 (inception) to May 31, 2008 (Unaudited - prepared by management) (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) ------------------------------------------------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> Issuance of common stock for cash July 5, 2005, $0.00005 per share - $ - 10,000,000 $ 500 $ - $ - $ - $ 500 Imputed interest from a shareholder - - - - 21 - - 21 Loss and comprehensive loss for the period - - - - - - (1,800) (1,800) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2005 - $ - 10,000,000 $ 500 $ 21 $ - $ (1,800) $ (1,279) ------------------------------------------------------------------------------------------------------------------------------------ Share subscription received - $ - - $ - $ - $ 165,000 $ - $ 165,000 Imputed interest from a shareholder - - - - 750 - - 750 Loss and comprehensive loss for the period - - - - - - (20,021) (20,021) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2006 - $ - 10,000,000 $ 500 $ 771 $ 165,000 $ (21,821) $ 144,450 ------------------------------------------------------------------------------------------------------------------------------------ Share subscription received - $ - 3,603,950 $ 360 $ 360,035 $ (165,000) $ - $ 195,395 Imputed interest from a shareholder - - - - 687 - - 687 Loss and comprehensive loss for the period - - - - - - (23,203) (23,203) ------------------------------------------------------------------------------------------------------------------------------------ Balance, August 31, 2007 - $ - 13,603,950 $ 860 $ 361,493 $ - $ (45,024) $ 317,329 ------------------------------------------------------------------------------------------------------------------------------------ Loss and comprehensive loss for the period - - - - - - (11,303) (11,303) ------------------------------------------------------------------------------------------------------------------------------------ Balance, May 31, 2008 - $ - 13,603,950 $ 860 $ 361,493 $ - $ (56,327) $ 306,026 ==================================================================================================================================== </TABLE> THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. <TABLE> <CAPTION> THRUST ENERGY CORP. (An Exploration Stage Company) Statements of Operations (Unaudited - prepared by management) (EXPRESSED IN U.S. DOLLARS) ---------------------------------------------------------------------------------------------------------------------------------- Cumulative from September 15, 2004 Nine months ended Three months ended (inception) to May 31 May 31 May 31 May 31 May 31, 2008 2008 2007 2008 2007 ---------------------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> EXPENSES Accounting fees $ 23,627 $ 7,307 $ 7,420 $ 903 $ 954 Amortization 1,884 808 808 269 269 Bank charges 320 24 166 12 28 Filing fees 2,171 - 79 - 79 Interest 1,458 - 561 - 187 Leases 3,547 - - - - Legal 12,716 - 6,992 - 80 Office 4,791 2,563 1,807 785 274 Transfer agent 5,813 601 1,712 276 258 ---------------------------------------------------------------------------------------------------------------------------------- OPERATING LOSS 56,327 11,303 19,545 2,245 2,129 ---------------------------------------------------------------------------------------------------------------------------------- NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (56,327) $ (11,303) $ (19,545) $ (2,245) $ (2,129) ================================================================================================================================== BASIC AND DILUTED LOSS PER SHARE - $ (0.00) $ (0.00) $ (0.00) $ (0.00) ================================================================================================================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - basic and diluted - 13,603,950 13,027,318 13,603,950 13,603,950 ================================================================================================================================== </TABLE> The accompanying notes are an integral part of these financial statements <TABLE> <CAPTION> THRUST ENERGY CORP. (An Exploration Stage Company) Statements of Cash Flows (Unaudited - prepared by management) (EXPRESSED IN U.S. DOLLARS) ------------------------------------------------------------------------------------------------------------------ Cumulative from September 15, 2004 Nine months ended (inception) to May 31 May 31 May 31, 2008 2008 2007 ------------------------------------------------------------------------------------------------------------------ <S> <C> <C> <C> CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Net Income (Loss) $ (56,327) $(11,303) $ (19,545) Adjustments for items not involving cash: - amortization 1,884 808 808 - imputed interest 1,458 - 561 Changes in operating assets and liabilities - oil and gas property lease (13,894) - - - (increase) decrease in prepaid expenses (603) 1,632 - - increase (decrease) in accounts payable and accrued liabilities 358 358 (1,948) ------------------------------------------------------------------------------------------------------------------ NET CASH USED IN OPERATING ACTIVITIES (67,124) (8,505) (20,124) ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES Purchase equipment (2,153) - (2,153) ------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Share subscription received - - (165,000) Proceeds from issuance of common stock 360,895 - 360,395 ------------------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 360,895 - 195,395 ------------------------------------------------------------------------------------------------------------------ INCREASE IN CASH AND CASH EQUIVALENTS 291,618 (8,505) 173,118 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 300,123 157,647 ------------------------------------------------------------------------------------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 291,618 $291,618 $ 330,765 ================================================================================================================== </TABLE> 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 Vancouver, British Columbia, 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 May 31, 2008, 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 May 31, 2008, 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. As of May 31, 2008, we had approximately $190,000 (August 31, 2007: $205,872) in a bank beyond insured limits. Fair Value of Financial Instruments The carrying amount of our financial instruments, which includes cash and cash equivalents and accounts payable and accrued liabilities, approximate their fair value due to the short period to maturity of these instruments. Revenue Recognition We record revenue when title passes, delivery occurs to our customers and the customer assumes the risks and rewards of ownership, when the price is fixed and determinable, and when collectibility is reasonably assured. 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 Statement of Financial Accounting Standards No. 128, Earnings Per Share. Statement 128 requires the reporting of basic and diluted earnings/loss per share. We calculate basic loss per share by dividing net loss by the weighted average number of outstanding common shares during the period. Comprehensive Loss We apply Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. Statement 130 establishes standards for the reporting and display of comprehensive income or loss, requiring its components to be reported in a financial statements. For the period ended May 31, 2008 our only component of comprehensive income or loss was the net loss reported in the operations statement. Foreign Currency Translation We maintain our accounting records in U.S. Dollars. At the transaction date, each asset, liability, revenue and expense involves foreign currencies is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities involving foreign currencies are remeasured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. Our currency exposure is insignificant and immaterial and we do not use derivative instruments to reduce our potential exposure to foreign currency risk. Oil and Gas Activity We follow the successful-efforts method of accounting for oil and gas property. Under this method of accounting, we capitalize all property acquisition cost and cost of exploratory and development wells when incurred, pending determination of whether the well has found proved reserves. If an exploratory well does not find proved reserves, we charge to expense the cost of drilling the well. We include exploratory dry hole cost in cash flow from investing activities within the cash flow statement. We capitalize the cost of development wells whether productive or nonproductive. We expense as incurred geological and geophysical cost and the cost of carrying and retaining unproved property. We will provide depletion, depreciation and amortization (DD&A) of capitalized cost of proved oil and gas property on a field-by-field basis using the units-of-production method based upon proved reserves. In computing DD&A we will take into consideration restoration, dismantlement and abandonment cost and the anticipated proceeds from equipment salvage. When applicable, we will apply the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, which provides guidance on accounting for dismantlement and abandonment cost. We review our long-lived assets for impairment when events or changes in circumstances indicate that an impairment may have occurred. In the impairment test we compare the expected undiscounted future net revenue on a field-by-field basis with the related net capitalized cost at the end of each period. Should the net capitalized cost exceed the undiscounted future net revenue of a property, we will write down the cost of the property to fair value, which we will determine using discounted future net revenue. We will provide an impairment allowance on a property-by-property basis when we determine that the unproved property will not be developed. Stock-Based Compensation The Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. SFAS No. 123(revised) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. We did not grant any stock options during the period ended May 31, 2008. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recent Accounting Pronouncements In March 2008, the FASB issued FASB Statement No. 161 ("SFAS 161"), "Disclosures about Derivative Instruments and Hedging Activities". SFAS 161 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations. In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - An amendment of ARB No. 51".SFAS 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity but separate from the parent's equity. The noncontrolling interest's portion of net income must also be clearly presented on the Income Statement. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations. In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141,(revised 2007), "Business Combinations". SFAS 141 (R) applies the acquisition method of accounting for business combinations established in SFAS 141 to all acquisitions where the acquirer gains a controlling interest, regardless of whether consideration was exchanged. Consistent with SFAS 141, SFAS 141 (R) requires the acquirer to fair value the assets and liabilities of the acquiree and record goodwill on bargain purchases, with main difference the application to all acquisitions where control is achieved. SFAS 141 (R) is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations The FASB has additionally issued SFAS No. 155 to SFAS No. 159 and FIN No. 48 but they will not have any relationship to the current operations of the Company. Therefore, a description and its impact on the Company's operations and financial position for each have not been disclosed. NOTE 3 - OIL AND GAS PROPERTY La Vaca Prospect By an Oil, Gas and Mineral Lease Agreement ("Lease Agreement") dated July 31, 2005, we were granted the exclusive right of exploring, drilling, mining and operating for, producing and owning oil, gas, sulfur and all other minerals on a 346.16 undeveloped acres of land located in the county of Jim Wells, Texas, USA for a term of five years by the payment of $10,000. We capitalized the amount for the acquisition of the Lease Agreement and the related acquisition costs (legal and broker fees) for a total of $13,894. Pursuant to the Lease Agreement, we are required to commence our operations on the above said land before the first anniversary date or tender the sum of $1,730.75 as the delay rental to cover the privilege of deferring operations for one year from said date. The Lease Agreement is subject to a royalty payment equal to one-fourth (1/4) of the gross proceeds of sale of all oil and/or gas and saved in any combination from the leased premises as further set out in the Lease Agreement. Further, the Lease Agreement is also subject to a minimum guaranteed royalty in the event of production, which will be in a sum not less than the annual delay rental, or Twenty Five Dollars ($25.00) per acre, whichever is greater, multiplied by the number of acres allocated to proration unit(s), as set out in the Lease Agreement, for producing well(s) located on or pooled with the leased premises. During the period, the Company did not incur any delay rental expense. Title on mineral properties and mining rights involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising for the frequently ambiguous conveyancing history characteristic of many mining properties. The Company relied on the judgment of oil and gas lease brokers or landmen who perform the filed work in examining records in the appropriate governmental office before attempting to place under lease a specific mineral interest. The Company cannot give any assurance that title to such mineral interest will not be challenged or impugned and cannot be certain that it will have valid title to its leased mining properties. NOTE 4 - PREFERRED AND COMMON STOCK We have 5,000,000 shares of preferred stock authorized and none issued. NOTE 4 - PREFERRED AND COMMON STOCK - CONTINUED We have 100,000,000 shares of common stock authorized. All shares of stock are non-assessable and non-cumulative, with no preemptive rights. In connection with our initial public offering, we sold a total 3,603,950 common shares at $0.10 per share for cash proceeds of $360,395. NOTE 5 - CONTINGENCIES AND COMMITMENTS Due to the nature of practice in the oil and gas industry and pursuant to the Lease Agreement (Note 3), the title of said land is not warranted either expressed or implied by the lessor. Further, we are required to make a minimum guaranteed royalty of $1,730.75 per annum for the duration of the lease term. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN 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. To date, we have only acquired a 100% working interest, and a corresponding 75% net revenue interest in a single property comprised of 346.16 undeveloped acres in Jim Wells County, Texas, that has not been explored to determine if it contains producible oil or natural gas. Our capital has been obtained via issuance of common stock and shareholder loans. On April 19, 2006, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-130922) effective. Our offering commenced on the effective date and terminated on October 18, 2006. We sold 3,603,950 shares through the offering at a price of $0.10 per share, for gross proceeds of $360,395. As of May 31, 2008, we had total assets of $306,384 comprised of $291,618 in cash, $603 in prepaid expenses, $269 in equipment and $13,894 in unproved oil and gas property. This reflects a decrease of $10,945 of the value of our total assets from $317,329 on August 31, 2007. As of May 31, 2008, our total liabilities increased to $358 from $nil as of August 31, 2007. We have not generated revenue since the date of inception. We presently have sufficient working capital to satisfy our cash requirements for the next twelve months of operations. We do not expect to purchase or sell any significant equipment nor do we expect any significant changes in the number of our employees. RESULTS OF OPERATIONS We posted an operating loss of $2,245 for the quarter ending May 31, 2008, due primarily to accounting fees and office expenses. This was an increase from the operating loss of $2,129 for the quarter ending May 31, 2007. ITEM 3. CONTROLS AND PROCEDURES As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures as of the end of the period covered by this quarterly report, being May 31, 2008. This evaluation was carried out under the supervision and with the participation of our management, including our president and chief executive officer. Based upon that evaluation, our president and chief executive officer concluded that our disclosure controls and procedures are effective. There have been no significant changes in our internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any material legal proceedings and to its knowledge, no such proceedings are threatened or contemplated. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS At present, our common stock is quoted on the NASD over-the-counter bulletin board under the trading symbol TEGC. As of May 31, 2008 there were 42 owners of record of our common stock. DIVIDEND POLICY Our Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available therefor in our sole discretion; however, to date no dividends have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future. USE OF PROCEEDS FROM REGISTERED SECURITIES On April 19, 2006, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-130922) effective. Our offering commenced on the effective date and terminated on October 18, 2006. We sold 3,603,950 shares through the offering at a price of $0.10 per share, for gross proceeds of $360,395. Our total offering expenses were $25,290. Of this amount, $14,523 was paid from the offering proceeds. The remainder ($10,767) was paid from the proceeds of a non-interest bearing loan of $25,000 from our President, Thomas Mills, which was convertible into shares of our common stock at the rate of $0.25 per share. On July 31, 2007, we repaid the convertible loan in full. We did not intend to repay the loan from the proceeds of our initial public offering, but in light of our lack of revenue, the convertibility of the loan and the fact that the loan proceeds were primarily used to pay for offering and startup expenses, the directors resolved (Mr. Mills abstaining) that it was in the best interests of the corporation to repay the loan from the proceeds. After paying offering expenses and repaying the loan from our director, the net offering proceeds were $322,872. As of May 31, 2008, we have used the net proceeds to pay $1,775 for delay rental on the La Vaca Prospect, $2,153 for equipment, $34,797 for professional services and office expenses. ITEM 3. DEFAULT UPON SENIOR NOTES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS EXHIBIT DESCRIPTION 31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.1 Officers' Certification SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THRUST ENERGY CORP. Date: June 25, 2008 /s/ Thomas Mills Thomas E. Mills President & Chief Financial Officer </TEXT> </DOCUMENT>