Trans-Pacific Aerospace (TPAC) 10-Q 2010 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[Mark One]

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

For the quarterly period ended January 31, 2010

or

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

For the transition period from _____to______

Commission file number: 333-148447

Trans-Pacific Aerospace Company, Inc.

(Exact name of registrant as specified in its charter)

Nevada	36-4613360
(State of Incorporation)	(IRS Employer Ident. No.)

30950 Rancho Viejo Road, Suite 120 San Juan Capistrano, CA	92675
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number: (949) 373-7282

                                Pinnacle Energy Corp.                               

(Former name or former address, if changed since last

report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such reports) .

Yes x  No  ¨      

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

¨  Large accelerated filer ¨  Accelerated filer  ¨  Non-accelerated filer x  Smaller reporting company

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

The number of shares outstanding of each of the issuer’s classes of equity as of March 12, 2010: 23,293,937shares of common stock, par value $0.001 per share.

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(FORMERLY PINNACLE ENERGY CORP.)

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Balance Sheets – January 31, 2010 (Unaudited) and October 31, 2009	1
	Statements of Operations - (Unaudited) Three Months Ended January 31, 2010 and 2009 and for the period of inception, from June 5, 2007 through January 31, 2010	2
	Statements of Cash Flows - (Unaudited) Three Months Ended January 31, 2010 and 2009 and for the period of inception, from June 5, 2007 through January 31, 2010	3
	Statements of Stockholders Equity (Unaudited) – For the Period Ended January 31, 2010	4
	Notes to Unaudited Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Financial Condition and Results	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4T.	Controls and Procedures	18
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
Item 5.	Other Information	19
Item 6.	Exhibits	20
Signatures		21

ii

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(Formerly Pinnacle Energy Corp.)

(A Development Stage Company)

Balance Sheets

	January 31,			October 31,
	2010			2009
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	10,068		$	7,417
Note receivable		26,000			-
Total current assets		36,068			7,417
Assets of discontinued operations, net		1,000,000			1,000,000
Total assets	$	1,036,068		$	1,007,417
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	6,790		$	37,557
Accrued salary and payroll taxes		-			66,948
Accrued interest payable		113,335			93,335
Total current liabilities		120,125			197,840
Notes payable, related to discontinued operations		1,000,000			1,000,000
Total liabilities		1,120,125			1,197,840
Stockholders' equity (deficit)
Preferred stock, 5,000,000 shares authorized.  No shares issued and outstanding at January 31, 2010 and October 31, 2009		-			-
Common stock, par value $0.001, 150,000,000 shares authorized 12,793,937 shares issued and outstanding at January 31, 2010 and, 11,192,083 shares issued and outstanding at October 31, 2009		12,794			11,192
Additional paid-in capital		1,138,706			749,591
Deficit accumulated during the development stage		(1,235,557	)		(951,206	)
Total stockholders' equity (deficit)		(84,057	)		(190,423	)
Total liabilities and stockholers' equity (deficit)	$	1,036,068		$	1,007,417

See accompanying notes to financial statements

1

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(Formerly Pinnacle Energy Corp.)

(A Development Stage Company)

Statements of Operations

(Unaudited)

							For the Period
							of Inception,
	For the						from June 5,
	Three Months Ended						2007, through
	January 31,						January 31,
	2010			2009			2010
Operating expenses
Professional fees		13,061			-			41,917
Consulting		30,000			-			70,000
Stock based compensation		182,735			-			562,235
Other general and administrative		38,555			6,506			119,576
Total operating expenses		264,351			6,506			793,728
Operating loss from continuing operations		(264,351	)		(6,506	)		(793,728	)
Interest expense		(20,000	)		(20,000	)		(113,333	)
Net loss from continuing operations	$	(284,351	)	$	(26,506	)		(907,061	)
Discontinued operations
Net loss from discontinued operations		-			(14,256	)		(328,496	)
Net loss	$	(284,351	)	$	(40,762	)	$	(1,235,557	)
Basic and dilutive net loss from continuing operations per share	$	(0.025	)	$	(0.002	)
Basic and dilutive net loss from discontinued operations per share	$	-		$	(0.001	)
Weighted average number of common  shares outstanding, basic and diluted		11,290,404			15,840,000

See accompanying notes to financial statements

2

TRANS-PACIFIC AEROSPACE COMPANY, INC.

 (Formerly Pinnacle Energy Corp.)

 (A Development Stage Company)

 Statements of Cash Flows

 (Unaudited)

							For the Period
							of Inception
	Three Months Ended						from June 5,
	January 31,						2007, through
	2010			2009			January 31, 2010
Cash flows from operating activities:
Net loss from continuing operations	$	(284,351	)	$	(26,506	)	$	(907,061	)
Loss from discontinued operations		-			(14,256	)		(328,496	)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Stock based compensation		182,735			-			562,235
Depreciation expense		-			2,500			17,500
Impairment of fixed assets		-			-			82,500
Impairment of oil & gas interests		-			-			190,000
Change in operating assets and liabilities:
Accounts receivable		-			19,006			-
Accounts payable and accrued expenses		19,233			-			56,790
Accrued salary and payroll taxes		38,052			-			105,000
Accrued interest payable		20,000			20,000			113,335
Net cash provided by (used in) operating activities		(24,331	)		744			(108,197	)
Cash flows from investing activities
Notes receivable		(26,000	)		-			(26,000	)
Equipment		-			-			(100,000	)
Oil & gas working interest		-			-			(100,000	)
Net cash used in investing activities		(26,000	)		-			(226,000	)
Cash flows from financing activities:
Common stock issued for cash		52,982			-			344,265
Net cash provided by financing activities		52,982			-			344,265
Net increase (decrease) in cash		2,651			744			10,068
Cash, beginning of the period		7,417			9,368			-
Cash, end of the period	$	10,068		$	10,112		$	10,068
Supplemental cash flow disclosure:
Interest paid		-			-			-
Taxes paid		-			-			-
Supplemenatal disclosure of non-cash transactions:
Common stock issued for payment on outstanding liabilities	$	50,000		$	-		$	50,000
Common stock issued for payment on outstanding wages	$	105,000		$	-		$	105,000
Retirement of common shares	$	-		$	-		$	5,250
Acquisition of oil and gas properties in exchange for note payable	$	-		$	-		$	1,000,000

See accompanying notes to financial statements

3

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(Formerly Pinnacle Energy Corp.)

(A Development Stage Company)

Statement of Shareholders' Equity (Deficit) 

									Deficit
									Accumulated
							Additional		during the
	Common Stock						Paid-In		Development
	Shares			Amount			Capital		Stage			Total
Inception, June 5, 2007		-		$	-		$	-	$	-		$	-
Common stock issued for cash on September 5, 2007 at $0.032 per share		7,740,000			7,740			240,561		-			248,301
Common stock issued for cash on September 5, 2007 at $0.003 per share		5,400,000			5,400			12,600		-			18,000
Common stock issued for oil and gas working interest on September 5, 2007 at $0.033 per share		2,700,000			2,700			87,300		-			90,000
Net loss for the period ended October 31, 2007		-			-			-		(13,363	)		(13,363	)
Balances, October 31, 2007		15,840,000		$	15,840		$	340,461	$	(13,363	)	$	342,938
Net loss for the year ended October  31, 2008		-			-			-		(47,897	)		(47,897	)
Balances, October 31, 2008		15,840,000		$	15,840		$	340,461	$	(61,260	)	$	295,041
Retirement of common shares on June 29, 2009		(5,250,000	)		(5,250	)		5,250		-			-
Common stock issued for services on June 29, 2009 at $0.69 per share		500,000			500			344,500		-			345,000
Common stock issued for services on June 29, 2009 at $0.69 per share		50,000			50			34,450		-			34,500
Common stock issued for cash on September 11, 2009 at $0.48 per share		52,083			52			24,930		-			24,982
Net loss from continuring operations for the year ended October 31, 2009		-			-			-		(606,809	)		(606,809	)
Net loss from discontinued operations for the year ended October 31, 2009		-			-			-		(283,137	)		(283,137	)
Balances, October 31, 2009		11,192,083		$	11,192		$	749,591	$	(951,206	)	$	(190,423	)
Common stock issued for cash on December 24, 2009 at $0.25 per share		72,000			72			17,928		-			18,000
Common stock issued for cash on January 15, 2010 at $0.25 per share		120,000			120			29,862		-			29,982
Common stock issued for cash on January 20, 2010 at $0.25 per share		20,000			20			4,980		-			5,000
Common stock issued for payment on outstanding liabilities		448,340			448			108,499		-			108,947
Common stock issued for payment on outstanding wages		941,514			942			227,846		-			228,788
Net loss from continuring operations for the three months ended January 31, 2010		-			-			-		(284,351	)		(284,351	)
Balances, January 31, 2010 (unaudited)		12,793,937		$	12,794		$	1,138,706	$	(1,235,557	)	$	(84,057	)

See accompanying notes to financial statements

4

Trans-Pacific Aerospace Company, Inc.

(Formerly Pinnacle Energy Corp.)

(A Development Stage Company)

Notes to Unaudited Financial Statements

NOTE 1 – BACKGROUND, ORGANIZATION, AND BASIS OF PRESENTATION

Basis of Presentation

The unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Item 8-03 of Regulation S-X.  Accordingly, they do not include all footnote disclosures required by accounting principles generally accepted in the United States of America.  These financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended October 31, 2009 included in our Form 10-K filed with the SEC on February 12, 2010.  The accompanying financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods in accordance with accounting principles generally accepted in the United States of America.  The results for any interim period are not necessarily indicative of the results for the entire fiscal year.

Organization

The Company was incorporated in the State of Nevada on June 5, 2007, as Gas Salvage Corp. for the purpose of engaging in the exploration and development of oil and gas.  In July 2008, the Company changed its name to Pinnacle Energy Corp.  On February 1, 2010, the Company completed the acquisition of the aircraft component part design, engineering and manufacturing business of Harbin Aerospace Company, LLC (“HAC”).  The transaction was structured as an asset acquisition.  Following completion of the HAC acquisition, our Board of Directors decided to dispose of our oil and gas business interests and focus on the aircraft component market.   On February 10, 2010, we completed the sale of all of our oil and gas business interests in exchange for cancellation of all obligations under an outstanding promissory note having a principal amount of $1,000,000.  Pursuant to FASB standards, the Company has retro-actively presented its oil and gas business as discontinued operations.  See Note 9 – Discontinued Operations for further discussion.

In March 2010, the Company changed its name to Trans-Pacific Aerospace Company, Inc.

On July 27, 2008, the Company completed a three-for-one stock split of the Company’s common stock.  The share and per-share information disclosed within this Form 10-Q reflect the completion of this stock split.

Business Overview

The Company was in the business of acquiring and developing oil and gas properties until February 2010.

In September 2007, the Company acquired a 44.5% leasehold interest (35.6% net revenue interest) in a producing gas well on 40 acres in Lincoln County, Oklahoma, known as Holmes #1.  The gas well drilled was put into production in November, 2007.  At the time the Company acquired its interest in Holmes #1, the Company also acquired, for $100,000, a 50% interest in a portable nitrogen rejection unit.

The Holmes #1 well has been shut down awaiting repairs to its nitrogen rejection unit.  A geologist’s report dated December 18, 2007 indicated that the lease was selling between 85 and 100 MCF per day, however volumetric calculations of the Holmes #1 reservoir have not yet been performed.  The unamortized acquisition cost remained on the balance sheet during the production period, since volumetric calculations were not completed.    The well dried up in 2009 and the Company determined this well was fully impaired as of July 31, 2009, and accordingly, the Company recorded an impairment charge of $190,000 on the Holmes well and an impairment charge on equipment of $82,500 during the fiscal year ended October 31, 2009 which is reflected in the statement of operations as part of the net loss from discontinued operations.

5

On September 1, 2008 the Company acquired working interests in six oil and gas wells located in Pawnee County, Oklahoma for $1,000,000, payable September 1, 2013.  Interest at an annual rate of 8% is due monthly. The working interests consist of a 25.5% working interest (20.4% net revenue interest) in two wells, a 20% working interest (16% net revenue interest) in three wells and a 17% working interest (13.6% net revenue interest) in the remaining well.  Volumetric calculations of the wells have not yet been performed.  An examination as to whether the wells warrant impairment based on expected revenue hinges upon performance of volumetric calculations.  On February 10, 2010, we completed the sale of all of our oil and gas business interests in exchange for cancellation of all obligations under an outstanding promissory note having a principal amount of $1,000,000.  Pursuant to FASB standards, the Company has retro-actively presented its oil and gas business as discontinued operations.  See Note 9 – Discontinued Operations for further discussion.

Going Concern

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.  The Company incurred a net loss from continuing operations of $284,351 and a loss from discontinued operations of $0 during the three months ended January 31, 2010, and an accumulated deficit of $1,235,557 since inception.   The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.

In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources.  Management’s plans to continue as a going concern include raising additional capital through sales of common stock and or a debt financing.  However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  Actual results could differ from those estimates.

Cash and equivalents

Cash and equivalents include investments with initial maturities of three months or less.  The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000.  There were no cash equivalents at January 31, 2010 or October 31, 2009.

Concentration of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk are cash and cash equivalents.  The Company places its cash and temporary cash investments with credit quality institutions.  At times, such investments may be in excess of FDIC insurance limits.  As of January 31, 2010 and October 31, 2009, there were no deposits in excess of federally insured limits.

6

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.

Fair Value of Financial Instruments

Effective October 1, 2008, the Company adopted Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company’s financial position, results of operations or cash flows. The carrying value of cash and cash equivalents, accounts payable, accrued expenses and notes payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.

Income Taxes

The Company accounts for income taxes under standards issued by the FASB.  Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.

Equipment

Equipment is recorded at cost and depreciated using straight line methods over the estimated useful lives of the related assets.  The Company reviews the carrying value of long-term assets to be held and used when events and circumstances warrant such a review.  If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair market value.  Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved.  The cost of normal maintenance and repairs is charged to operations as incurred.  Major overhaul that extends the useful life of existing assets is capitalized.  When equipment is retired or disposed, the costs and related accumulated depreciation are eliminated and the resulting profit or loss is recognized in income.

Issuance of Shares for Non-Cash Consideration

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably determinable.  The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB.  The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete.  In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

7

Stock-Based Compensation

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments.  For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts.  Prior periods presented are not required to be restated.  We adopted the standard as of inception and applied the standard using the modified prospective method.  The Company has not issued any stock options.

Development-Stage Company

The Company is considered a development-stage company, with limited operating revenues during the periods presented, as defined by the FASB..  The FASB requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things.  Management has defined inception as June 5, 2007. Since inception, the Company has incurred an operating loss of $1,235,557. The Company’s working capital has been primarily generated through the sales of common stock as well as revenue from its wells.  Management has provided financial data since June 5, 2007, “Inception”, in the financial statements.

Net Loss Per Share

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share.  Basic income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share (“Diluted EPS”) is similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised. There were no potential dilutive securities as of January 31, 2010 and 2009.

8

	For the Three Months Ended
	January 31,
	2010			2009
Net loss from continuing operations	$	(284,351	)	$	(26,506	)
Discontinued operations
Net loss from discontinued operations		-			(14,256	)
Net loss	$	(284,351	)	$	(40,762	)
Basic and dilutive net loss from continuing operations per share	$	(0.025	)	$	(0.002	)
Basic and dilutive net loss from discontinued operations per share	$	-		$	(0.001	)
Weighted average number of common  shares outstanding, basic and diluted		11,290,404			15,840,000

The weighted average number of shares included in the calculation above are post-split.

Accounting for Oil and Gas Producing Activities

The company uses the successful efforts method of accounting for oil and gas producing activities.  Under this method, acquisition costs for proved and unproved properties are capitalized when incurred.

Acquisition costs are capitalized when incurred pending the determination of whether a well has found proved reserves.  A determination of whether a well has found proved reserves is made within a year of acquisition.

If after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired, and its costs are charged to expense.  It’s costs can however, continue to be capitalized if a sufficient quantity of reserves are discovered in the well to justify its completion as a producing well and sufficient progress is made assessing the reserves and the well’s economic and operating feasibility.  The impairment of unamortized capital costs is measured at a lease level and is reduced to fair value if it is determined that the sum of expected future net cash flows is less than the net book value.

The company determines if impairment has occurred through either adverse changes or as a result of the annual review of all fields.  During the fiscal year ended October 31, 2008 the company did not record any impairment charges. During the year ended October 31, 2009, the Company determined the Holmes well was impaired as of July 31, 2009 and accordingly, the Company recorded an impairment charge of $190,000 on the Holmes well and an impairment charge on equipment of $82,500 during the fiscal year ended October 31, 2009 which is reflected in the statement of operations.  During the three months ended January 31, 2010, the company did not record any impairment charges.

9

Development costs of proved oil and gas properties, including estimated dismantlement, restoration and abandonment costs and acquisition costs, are depreciated and depleted on a field basis by the units-of-production method using proved reserves, respectively.

The costs of unproved oil and gas properties are generally combined and impaired over a period that is based on the average holding period for such properties and the company’s experience of successful operations.

Oil and Gas Revenue Recognition

The company applies the sales method of accounting for natural gas revenue.  Under thus method, revenues are recognized based on the actual volume of natural gas sold to purchasers.  Revenue from the sale of gas is reported by the gas gathering company monthly and paid two months in arrears.

Recently Adopted and Recently Enacted Accounting Pronouncements

In April 2008, the FASB issued ASC 350-10, “Determination of the Useful Life of Intangible Assets.” ASC 350-10 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350-10, “Goodwill and Other Intangible Assets.” ASC No. 350-10 is effective for fiscal years beginning after December 15, 2008. The adoption of this ASC did not have a material impact on the Company’s financial statements.

In April 2009, the FASB issued ASC 805-10, “Accounting for Assets Acquired and Liabilities assumed in a Business Combination That Arise from Contingencies — an amendment of FASB Statement No. 141 (Revised December 2007), Business Combinations”. ASC 805-10 addresses application issues raised by preparers, auditors and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination. ASC 805-10 is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. ASC 805-10 will have an impact on the Company’s accounting for any future acquisitions and its financial statements.

In May 2009, the FASB issued ASC Topic 855, Subsequent Events. ASC Topic 855 established principles and requirements for evaluating and reporting subsequent events and distinguishes which subsequent events should be recognized in the financial statements versus which subsequent events should be disclosed in the financial statements. ASC Topic 855 also requires disclosure of the date through which subsequent events are evaluated by management. ASC Topic 855 was effective for interim periods ending after June 15, 2009 and applies prospectively. Because ASC Topic 855 impacts the disclosure requirements, and not the accounting treatment for subsequent events, the adoption of ASC Topic 855 did not impact the Company’s results of operations or financial condition. See Note 9 for disclosures regarding our subsequent events.

Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout these financials have been updated for the Codification.

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In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value, which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, an entity may use the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value measurements. This ASU is effective October 1, 2009. The adoption of this standard did not have a material impact on the Company’s results of operations or financial condition.

NOTE 3 – PROPERTY AND EQUIPMENT

The Company purchased a 50% interest in a skid mounted nitrogen rejection unit in October, 2005 for $100,000. The unit strips out excessive nitrogen and oxygen from gas wells to an acceptable level of contaminants in the gas stream.  The unit was used on the Company’s gas wells commencing November, 2007.  As of July 31, 2009, the equipment was determined to be inoperable and an impairment charge on equipment of $82,500 was recorded during the fiscal year ended October 31, 2009.

NOTE 4 - RELATED PARTY TRANSACTIONS

Nolan Weir, former sole officer and director of the Company, returned 5,250,000 common shares to the Company on June 29, 2009.  The shares were then cancelled.   The transaction was recorded at par value.

On June 29, 2009, the Company entered into a Support Services Agreement with Cardiff Partners, LLC (formerly Strands Management Company, LLC) (the “Cardiff Agreement”).  Matt Szot, our Chief Financial Officer and Secretary, is the Chief Financial Officer of Cardiff.  David Walters, a director, owns a 50% interest and is a managing member of Cardiff.   Pursuant to the Cardiff Agreement, in consideration for providing certain services to the Company, Cardiff is entitled to a monthly fee in the amount of $10,000.   The Company also issued 50,000 shares of the Company’s common stock to Mr. Szot pursuant to the Cardiff Agreement.  The initial term of the Cardiff Agreement expires June 28, 2010. The Company incurred $30,000 in consulting fees under the terms of the agreement for the three months ended January 31, 2010 which is included in consulting expenses.  No amounts were incurred for the fiscal quarter ended January 31, 2009.  On January 28, 2010, the Company issued 448,340 shares of common stock as payment in full of $50,000 of outstanding balances due to Cardiff.  As of January 31, 2010, no amounts were outstanding under the agreement.

On January 12, 2010, the Company amended the Cardiff Agreement.  Under the amended Cardiff Agreement, Cardiff has the option to accept payment of outstanding cash compensation owed to it under its agreements with the Company in the form of shares of our common stock.  The number of shares to be issued will be calculated by dividing the outstanding balance to be paid by 50% of the average of the closing prices for the Company’s common stock during the 20 trading day period ending one trading day prior to the date that notice accepting shares in payment is sent to us.  In addition, under the amended Cardiff Agreement, Cardiff has provided and will provide the Company with transaction execution support services in connection with the HAC transaction, including due diligence, business review of relevant transaction documentation and audit support.   As compensation for the additional services, in February 2010 the Company issued to Cardiff 2,500,000 shares of the Company’s common stock, a Series A common stock purchase warrant to purchase 2,000,000 shares of the Company’s common stock and a Series B common stock purchase warrant to purchase 2,000,000 shares of the Company’s common stock.

On June 29, 2009, the Company entered into an Employment Agreement with David Walters, the Chairman of the Company’s Board of Directors and its former Chief Executive Officer.  Under the agreement, which had a term of one year, Mr. Walters received a base salary of $180,000, plus 500,000 shares of the Company’s common stock.  On January 12, 2010, the Company amended the Employment Agreement with Mr. Walters.  Under the amended agreement, Mr. Walters has the option to accept payment of outstanding cash compensation owed to him under the agreement in the form of shares of the Company’s common stock.  The number of shares to be issued will be calculated by dividing the outstanding balance to be paid by 50% of the average of the closing prices for our common stock during the 20 trading day period ending one trading day prior to the date that notice accepting shares in payment is sent to the Company.    The Company incurred $45,000 and $0 under the terms of the agreement for the three months ended January 31, 2010 and 2009, respectively.  On January 28, 2010, the Company issued 941,514 shares of common stock as payment in full of outstanding balances due to Mr. Walters totaling $105,000.  As of January 31, 2010, no amounts were outstanding under the agreement.

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NOTE 5 - NOTES RECEIVABLE

In December 2009 and January 2010, the Company advanced a total of $26,000 to Harbin Aerospace Company, LLC ("HAC") in exchange for HAC's secured promissory notes.  Upon completion of the Company's acquisition of HAC, the notes were cancelled.   See Note 10- Subsequent Events.

NOTE 6 – NOTE PAYABLE

The Company issued a promissory note to Futures Investment Corporation on September 1, 2008 for $1,000,000 as payment for an oil and gas working interest in Pawnee County, Oklahoma.  The note is payable on September 1, 2013.  Interest is payable monthly at the rate of 8% simple interest.  As of January 31, 2010, the Company was in default on the note, as the Company has not made the monthly interest payments.

On February 10, 2010, the Company completed the sale of all of its oil and gas business interest in exchange for cancellation of all obligations under the promissory note.  See Note 9 – Discontinued Operations for further discussion.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Consulting Agreements

The Company has entered into consulting agreements for services to be provided to the Company in the ordinary course of business.  These agreements call for expense reimbursement and various payments upon performance of services.  See Note 4 for further discussion.

Legal

There were no legal proceedings against the Company with respect to matters arising in the ordinary course of business.

NOTE 8 – CAPITAL STOCK TRANSACTIONS

The Company is authorized to issue up to 150,000,000 shares of its $0.001 common stock.  At January 31, 2010, there were 12,793,937 shares issued and outstanding.  At October 31, 2009, there were 11,192,083 shares issued and outstanding.

In July 2008, the Company completed a three-for-one stock split of the Company’s common stock.

On December 22, 2009, the Company entered into a stock purchase agreement with an accredited investor for the sale of 400,000 shares of its common stock at a purchase price of $0.25 per share.  The sale of 72,000 shares of common stock pursuant to this agreement closed on December 24, 2009.  The sale of an additional 20,000 shares of common stock pursuant to this agreement closed on January 20, 2010.

On January 15, 2010, the Company entered into a stock purchase agreement with an accredited investor for the sale of 120,000 shares of its common stock at a purchase price of $0.25 per share.  The sale closed on January 15, 2010.

On January 28, 2010, the Company issued 448,340 shares of common stock as payment in full of $50,000 of outstanding balances due to Cardiff.   The Company recorded a stock based compensation charge of $58,947 for the difference between the fair value of the common stock issued on this date and the $50,000 obligation it settled.

On January 28, 2010, the Company issued 941,514 shares of common stock as payment in full of outstanding balances due to Mr. Walters totaling $105,000.  The Company recorded a stock based compensation charge of $123,788 for the difference between the fair value of the common stock issued on this date and the $105,000 obligation it settled.

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NOTE 9 – DISCONTINUED OPERATIONS

On February 10, 2010, the Company completed the sale of all of its oil and gas business interests in exchange for cancellation of all obligations under an outstanding promissory note having a principal amount of $1,000,000.  Pursuant to FASB standards, the Company has retro-actively presented its oil and gas business as discontinued operations.

The following schedule shows the assets of the discontinued operations as of January 31, 2010:

Pawnee County Lease	$	1,000,000
Total	$	1,000,000

The following schedule shows the liabilities of the discontinued operations as of January 31, 2010:

Notes payable	$	1,000,000
Total	$	1,000,000

The Company’s loss from discontinued operations, for the fiscal quarter ended January 31, 2010 and 2009, totaled $0 and $14,256, respectively.  The Company’s loss from discontinued operations since inception through January 31, 2010, totaled $328,496.  Prior year financial statements have been restated to present the discontinued operations.

NOTE 10 – SUBSEQUENT EVENTS

On February 1, 2010, the Company completed its acquisition of the aircraft component part design, engineering and manufacturing business of Harbin Aerospace Company, LLC.  The transaction was structured as an asset acquisition in exchange for:

· 8,000,000 million shares of the Company’s common stock.

· A Series A common stock purchase warrant to purchase 4,000,000 shares of the Company’s common stock at an exercise price of $0.50 per share.   The Series A warrant becomes exercisable on the date that the Company recognizes revenue equal to or exceeding $50,000,000 for any consecutive twelve-month period and expires on January 31, 2015.

· A Series B common stock purchase warrant to purchase 4,000,000 shares of the Company’s common stock at an exercise price of $1.00 per share.   The Series B warrant becomes exercisable on the date that the Company recognizes revenue equal to or exceeding $100,000,000 for any consecutive twelve-month period and expires on January 31, 2018.

· The assumption by the Company of (a) $260,000 of obligations under a convertible note and (b) other obligations and liabilities in the amount of approximately $200,000.    The convertible note assumed by the Company does not bear interest and becomes payable on March 12, 2011.   The note is convertible into shares of the Company’s common stock at an initial conversion price of $0.25 per share.  The conversion price is subject to adjustment for stock splits and combinations; certain dividends and distributions; reclassification, exchange or substitution; reorganization, merger, consolidation or sales of assets.

William McKay, the Company’s new Chief Executive Officer and Director, was the Chief Executive officer of HAC and his wife, Nikki Lynn McKay, is the sole member of HAC.

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Following completion of the HAC acquisition, our Board of Directors decided to dispose of our oil and gas business interests and focus on the aircraft component market.   On February 10, 2010, we completed the sale of all of our oil and gas business interests in exchange for cancellation of all obligations under an outstanding promissory note having a principal amount of $1,000,000.  Pursuant to FASB standards, the Company has retro-actively presented its oil and gas business as discontinued operations.  See Note 9 – Discontinued Operations for further discussion.

On February 1, 2010, we entered into an Employment Agreement with William McKay, the Chairman of our Board of Directors and our Chief Executive Officer.  Under the agreement, Mr. McKay will receive a base salary of $180,000, plus an initial bonus of 1,200,000 shares of our common stock (to be issued in 300,000 share blocks on a quarterly basis). The initial term of the Employment Agreement will expire on January 31, 2011 and will automatically renew for additional one-year terms unless either party provides notice of non-renewal prior to July 31 in any term.

In February 1, 2010, the Company issued to Cardiff 2,500,000 shares of the Company’s common stock, a Series A common stock purchase warrant to purchase 2,000,000 shares of the Company’s common stock and a Series B common stock purchase warrant to purchase 2,000,000 shares of the Company’s common stock.  See Note 4 for further discussion.

On February 15, 2010, we entered into a Placement Agency and Advisory Services Agreement with Monarch Bay Associates, LLC (“MBA”).  MBA is a FINRA registered firm.  David Walters, our director, is a member of (and owns 50% of the ownership interests in) MBA. Under the agreement, MBA acts as our placement agent on an exclusive basis with respect to private placements of our capital stock and as our exclusive advisor with respect to acquisitions, mergers, joint ventures and similar transactions.   MBA will receive fees equal to (a) 8% of the gross proceeds raised by us in any private placement (plus warrants to purchase 8% of the number of shares of common stock issued or issuable by us in connection with the private placement) and (b) up to 5% of the total consideration paid or received by us or our stockholders in an acquisition, merger, joint venture or similar transaction.  The initial term of the Placement Agency and Advisory Services Agreement will expire on February 15, 2011.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operation

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, “we,” “us” and “our” refer to Trans-Pacific Aerospace Company, Inc., a Nevada corporation.  The following Management’s Discussion and Analysis of Financial Condition and Results of Operation provide information that we believe is relevant to an assessment and understanding of our financial condition and results of operations.  The following discussion should be read in conjunction with our financial statements and notes thereto included with this Quarterly Report on Form 10-Q, and all our other filings, including Current Reports on Form 8-K, filed with the Securities and Exchange Commission (“SEC”) through the date of this report.

Forward Looking Statements

This Quarterly Report on Form 10-Q includes both historical and forward-looking statements, which include information relating to future events, future financial performance, strategies, expectations, competitive environment and regulations.  Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.  Such statements are intended to operate as “forward-looking statements” of the kind permitted by the Private Securities Litigation Reform Act of 1995, incorporated in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  That legislation protects such predictive statements by creating a “safe harbor” from liability in the event that a particular prediction does not turn out as anticipated. Forward-looking statements should not be read as a guarantee of future performance or results and will probably not be accurate indications of when such performance or results will be achieved.  Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.  You should review carefully the section entitled “Risk Factors” beginning on page 4 of our Annual Report on Form 10-K for a discussion of certain of the risks that could cause our actual results to differ from those expressed or suggested by the forward-looking statements.

The inclusion of the forward-looking statements should not be regarded as a representation by us, or any other person, that such forward-looking statements will be achieved.  You should be aware that any forward-looking statement made by us in this Quarterly Report on Form 10-Q, or elsewhere, speaks only as of the date on which we make it. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise.  In light of the foregoing, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Quarterly Report on Form 10-Q.

Overview

We design, manufacture and sell aerospace quality component parts for commercial and military aircraft, space vehicles, power plants and surface and undersea vessels.  These parts have applications in both newly constructed platforms and as spares for existing platforms.  Our initial products are self-lubricating spherical bearings that help with several flight-critical tasks, including aircraft flight controls and landing gear.   To date, our operations have focused on product design and engineering.  We have not commenced commercial manufacture or sales of our products.

Our strategy is to leverage our product design and engineering expertise and assets to form joint venture or other business relationships with local partners in markets outside the United States who will provide manufacturing, sales and distribution capabilities.  Our initial target markets are China, India and the Middle East.  Additionally, we plan to establish a small manufacturing facility in the United States to provide component parts to military weapon systems and small quantities of products with accelerated delivery schedules to commercial aerospace end users.

Our aircraft component business was acquired on February 1, 2010 and is not reflected in our historical financial statements for the fiscal quarters ended January 31, 2010 and 2009.

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As we execute our business strategy in the fiscal year ending October 31, 2010, we expect to incur a substantial amount of operating expenses that have not been incurred or reflected in our historical results of operations, including: expenses for personnel, operations, and professional fees. We also expect that we will continue to incur stock based compensation charges in future periods as we will likely issue equity awards as a form of compensation to management, vendors and other professional service providers.

Results of Operations

Three Months Ended January 31, 2010, Compared to Three Months Ended January 31, 2009

Revenues

We have only recently entered the aerospace component business. Accordingly, we have not generated any revenues from continuing operations.  We do not expect to generate any revenues until at least the third quarter of fiscal year 2010.  Revenues from our oil and gas business have been retroactively reclassified to the loss from discontinued operations on the statement of operations.

Operating Expenses

Operating expenses from continuing operations totaled $264,351 for the fiscal quarter ended January 31, 2010 compared to $6,506 for the comparable period in the prior year.  The current period operating expenses primarily consist of a non-cash stock based compensation charge recorded of $182,735 for the 448,340 shares of our common stock issued for payment on outstanding liabilities pursuant to our Amended Support Services Agreement with Cardiff Partners, LLC and 941,514 shares of our common stock issued for payment on outstanding wages pursuant to an employment agreement with David Walters, our Director and former Chief Executive Officer. Operating expenses for the quarter year ended January 31, 2010 also include $30,000 of consulting fees, $13,061 of other professional fees, and $38,555 of other general and administrative expenses.

We recently changed our principal business to the aerospace component business, and expect to continue to incur operating expenses to pursue our business plan.

Loss from Discontinued Operations

Following completion of the HAC acquisition, our Board of Directors decided to dispose of our oil and gas business interests and focus on the aircraft component market.   On February 10, 2010, we completed the sale of all of our oil and gas business interest in exchange for cancellation of all obligations under an outstanding promissory note.

Pursuant to FASB standards, we have retro-actively presented our oil and gas business as discontinued operations.  We incurred losses from discontinued operations of $0 and $14,256 for the fiscal quarter ended January 31, 2010 and 2009, respectively.  Our loss from discontinued operations since inception through January 31, 2010, totaled $328,496.  Prior year financial statements have been restated to present the discontinued operations.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that we will continue as a going concern. As shown in the accompanying financial statements, we incurred losses from continuing operations of $284,351 and $26,506 for the quarters ended January 31, 2010 and 2009, respectively and have an accumulated deficit of $1,235,557 at January 31, 2010.  At January 31, 2010, we had cash and cash equivalents of $10,068.

We have not yet established a source of revenues to cover our operating costs and to allow us to continue as a going concern.  We do not expect to generate any revenues until at least the third quarter of fiscal year 2010.  In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations, we will need, among other things, significant additional capital resources.  Accordingly, management’s plans to continue as a going concern include raising additional capital through sales of common stock and other securities.

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The aircraft component part business is capital intensive.  Execution of our business strategywill require substantial capital investment in the short-term and in future periods.  We require capital for, among other purposes, designing and engineering our products and establishing joint venture or other business relationships for the manufacture and distribution of our products.

Because cash generated internally is not sufficient to fund capital requirements in 2010, we will require additional debt and/or equity financing. However, this type of financing may not be available or, if available, may not be available on attractive terms.

Our current funding is not sufficient to continue our operations for the remainder of the fiscal year ending October 31, 2010.  We cannot provide any assurances that additional financing will be available to us or, if available, may not be available on acceptable terms.

If we are unable to obtain adequate capital, we could be forced to cease or delay development of our operations, sell assets or our business may fail.   In each such case, the holders of our common stock would lose all or most of their investment.

Off-Balance Sheet Arrangements

As of January 31, 2010, we did not have any significant off-balance sheet arrangements, as defined in Item 303 of Regulation S-K.

Critical Accounting Policies and Estimates

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States.  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses.  These estimates and assumptions are affected by management’s application of accounting policies.  We believe that understanding the basis and nature of the estimates is critical to an understanding of our financials.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  Actual results could differ from those estimates.

Issuance of Shares for Non-Cash Consideration

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably determinable.

The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of the standards issued by FASB.  The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete.  In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

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Recently Issued Accounting Pronouncements

In June 2009, the FASB established the FASB Accounting Standards Codification (the "Codification") as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP.  Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  The introduction of the Codification does not change GAAP and other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the our consolidated financial statements.

In May 2009, the FASB issued a standard on subsequent events.  This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). It requires an entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009.  The Company has adopted the standard.

In September 2006, the FASB adopted a standard for fair value measurements.  This standard establishes a framework for measuring fair value and expands disclosure about fair value measurements. Specifically, this standard establishes that fair value is a market-based measurement, not an entity specific measurement.  As such, the value measurement should be determined based on assumptions the market participants would use in pricing an asset or liability, including, but not limited to assumptions about risk, restrictions on the sale or use of an asset and the risk of nonperformance for a liability.  The expanded disclosures include disclosure of the inputs used to measure fair value and the effect of certain of the measurements on earnings for the period.  The adoption of this standard related to financial assets and liabilities did not have a material impact on the Company's financial statements.  We are currently evaluating the impact, if any, that this standard may have on our future financial statements related to non-financial assets and liabilities.

In October 2008, the FASB issued a standard for determining the fair value of a financial asset when the market for that asset is not active.  We have concluded that the application of this standard did not have a material impact on our financial position and results of operations as of and for the three months ended January 31, 2010.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

None.

Item 4T.  Controls and Procedures.

Evaluation of Disclosure and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Control Over Financial Reporting 

During our most recent fiscal quarter, there has not occurred any change in our internal control over financial reporting (as such term is defined in Rule 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

On December 22, 2009, we entered into a stock purchase agreement with an accredited investor for the sale of 400,000 shares of our common stock at a purchase price of $0.25 per share.  The sale of 72,000 shares closed on December 24, 2009.  The sale of an additional 20,000 shares closed on January 20, 2010.  Our securities were offered and sold solely to an accredited investor in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended since the issuances did not involve a public offering, the recipient took the shares for investment and not resale and we took appropriate measures to restrict transfer.

On January 15, 2010, the Company entered into a stock purchase agreement with an accredited investor for the sale of 120,000 shares of its common stock at a purchase price of $0.25 per share.  The sale closed on January 15, 2010. Our securities were offered and sold solely to an accredited investor in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended since the issuances did not involve a public offering, the recipient took the shares for investment and not resale and we took appropriate measures to restrict transfer.

On January 28, 2010, we issued 448,340 shares of common stock to Cardiff Partners, LLC as payment in full of $50,000 of outstanding balances due to Cardiff under our support services agreement with Cardiff.Our securities were offered and sold solely to an accredited investor in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended since the issuances did not involve a public offering, the recipient took the shares for investment and not resale and we took appropriate measures to restrict transfer.

On January 28, 2010, we issued 941,514 shares of common stock to David Walters, our director and former chief executive officer, as payment in full of outstanding balances due to Mr. Walters totaling $105,000 under his employment agreement with us.  Our securities were offered and sold solely to an accredited investor in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended since the issuances did not involve a public offering, the recipient took the shares for investment and not resale and we took appropriate measures to restrict transfer.

Item 3.  Defaults Upon Senior Securities.

��

None.

Item 4.  Submission of Matters to a Vote of Security Holders.

On February 12, 2010, stockholders holding a majority of our outstanding voting power gave their signed written consent to action without a meeting to approve an amendment to our Articles of Incorporation to change our corporate name from “Pinnacle Energy Corp.” to “Trans-Pacific Aerospace Company, Inc.”  The corporate name change became effective on February 17, 2010.

Item 5. Other Information.

On February 1, 2010, we entered into an Employment Agreement with William McKay, the Chairman of our Board of Directors and our Chief Executive Officer.  Under the agreement, Mr. McKay will receive a base salary of $180,000, plus an initial bonus of 1,200,000 shares of our common stock (to be issued in 300,000 share blocks on a quarterly basis). The initial term of the Employment Agreement will expire on January 31, 2011 and will automatically renew for additional one-year terms unless either party provides notice of non-renewal prior to July 31 in any term.

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On February 15, 2010, we entered into a Placement Agency and Advisory Services Agreement with Monarch Bay Associates, LLC (“MBA”).  MBA is a FINRA registered firm.  David Walters, our director, is a member of (and owns 50% of the ownership interests in) MBA. Under the agreement, MBA acts as our placement agent on an exclusive basis with respect to private placements of our capital stock and as our exclusive advisor with respect to acquisitions, mergers, joint ventures and similar transactions.   MBA will receive fees equal to (a) 8% of the gross proceeds raised by us in any private placement (plus warrants to purchase 8% of the number of shares of common stock issued or issuable by us in connection with the private placement) and (b) up to 5% of the total consideration paid or received by us or our stockholders in an acquisition, merger, joint venture or similar transaction.  The initial term of the Placement Agency and Advisory Services Agreement will expire on February 15, 2011.

Item 6. Exhibits.

No.	Description
Exhibit 10.1	Employment Agreement with William McKay, the Chairman of our Board of Directors and our Chief Executive Officer, Dated February 1, 2010*
Exhibit 10.2	Placement Agency and Advisory Services Agreement with Monarch Bay Associates, LLC, Dated February 15, 2010*
Exhibit 31.1	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Exhibit 3.1	Certificate of Amendment to Articles of Incorporation*
Exhibit 31.2	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Exhibit 32.1	Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
Exhibit 32.2	Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

*Filed herewith

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SIGNATURES

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

Dated: March 12, 2010 Trans-Pacific Aerospace Company, Inc.

By:	/s/ William Reed McKay
	William Reed McKay, Chief Executive Officer

By:	/s/ Matt Szot
	Matt Szot, Chief Financial Officer

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EXHIBIT INDEX

No.	Description
Exhibit 31.1	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Exhibit 31.2	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Exhibit 32.1	Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
Exhibit 32.2	Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

22