Trans-Pacific Aerospace Company, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - Trans-Pacific Aerospace Company, Inc.	v199442_ex32-1.htm
EX-10.1 - Trans-Pacific Aerospace Company, Inc.	v199442_ex10-1.htm
EX-31.1 - Trans-Pacific Aerospace Company, Inc.	v199442_ex31-1.htm
EX-10.2 - Trans-Pacific Aerospace Company, Inc.	v199442_ex10-2.htm
EX-31.2 - Trans-Pacific Aerospace Company, Inc.	v199442_ex31-2.htm

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 July 31, 2010

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

For the transition period from _____to______

Commission file 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.)

2975 Huntington Drive, Suite 107 San Marino, CA	91108
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number: (626) 755-1211

30950 Ranch Viejo Road, Suite 120 , San Juan

Capistrano, CA 92675

(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 ¨

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 October 20, 2010: 29,393,586 shares of common stock, par value $0.001 per share.

TRANS-PACIFIC AEROSPACE COMPANY, INC.

		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Balance Sheets – July 31, 2010 (Unaudited) and October 31, 2009	1

	Statements of Operations - (Unaudited) Three and Nine Months Ended July 31, 2010 and 2009 and for the period of inception, from June 5, 2007 through July 31, 2010	2

	Statements of Cash Flows - (Unaudited) Nine Months Ended July 31, 2010 and 2009 and for the period of inception, from June 5, 2007 through July 31, 2010	3

	Statements of Stockholders Equity (Unaudited) – For the Period Ended July 31, 2010	4

	Notes to Unaudited Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Financial Condition and Results	[__]

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4T.	Controls and Procedures	23

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	[Removed and Reserved]	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

Signatures		26

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(A Development Stage Company)

Balance Sheets

(Unaudited)

	July 31,			October 31,
	2010			2009
ASSETS
Current assets
Cash and cash equivalents	$	61		$	7,417
Cash - restricted (Godfrey)		883,768			-
Due from related party		66,400			-
Total current assets		950,229			7,417

Tooling		82,500			-
Intangible assets - intellectual property		2,469,404			-
Assets of discontinued operations, net		-			1,000,000
Total assets	$	3,502,133		$	1,007,417

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	53,959		$	27,557
Accounts payable - related party		49,500			10,000
Accrued expenses - related party		11,500			-
Accrued salary and payroll taxes		7,958			66,948
Accrued interest payable		1,017			93,335
Convertible note payable - related party, net of debt discount
of $74,046 and $0, respectively		14,809			-
Convertible note payable, net of debt discount of $11,892
and $0, respectively		248,108			-
Total current liabilities		386,851			197,840

Notes payable, related to discontinued operations		-			1,000,000

Total liabilities		386,851			1,197,840

Stockholders' equity (deficit)
Preferred stock, 5,000,000 shares authorized. No shares issued
and outstanding at July 31, 2010 and October 31, 2009		-			-
Common stock, par value $0.001, 150,000,000 shares authorized.
26,729,937 shares issued and outstanding at July 31, 2010 and
11,192,083 shares issued and outstanding at October 31, 2009		26,730			11,192
Additional paid-in capital		3,733,759			749,591
Non-controlling interest		1,642,102			-
Common stock payable		298,650			-
Deficit accumulated during the development stage		(2,585,959	)		(951,206	)

Total stockholders' equity (deficit)		3,115,282			(190,423	)

Total liabilities and stockholders' equity (deficit)	$	3,502,133		$	1,007,417

See accompanying notes to financial statements

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(A Development Stage Company)

Statements of Operations

(Unaudited)

													For the Period
													of Inception,
	For the						For the						from June 5,
	Three Months Ended						Nine Months Ended						2007, through
	July 31,						July 31,						July 31,
	2010			2009			2010			2009			2010

Operating expenses
Professional fees	$	29,125		$	-		$	62,611		$	-		$	91,467
Consulting		36,000			-			96,000			-			136,000
Other general and administrative		619,067			379,500			1,596,850			390,448			2,057,146

Total operating expenses		684,192			379,500			1,755,461			390,448			2,284,613

Operating loss from continuing operations		(684,192	)		(379,500	)		(1,755,461	)		(390,448	)		(2,284,613	)

Interest expense, net		(149,057	)		(20,000	)		(178,743	)		(60,000	)		(272,076	)

Net loss from continuing operations	$	(833,249	)	$	(399,500	)	$	(1,934,204	)	$	(450,448	)	$	(2,556,689	)

Discontinued operations
Net gain (loss) from discontinued operations		-			(314,963	)		115,527			(333,848	)		(213,194	)

Net loss including non-controlling interests	$	(833,249	)	$	(714,463	)	$	(1,818,677	)	$	(784,296	)	$	(2,769,883	)
Net loss attributable to non-controlling interests		(183,924	)		-			(183,924	)		-			(183,924	)
Net loss attributable to Trans-Pacific Aerospace Company, Inc.	$	(649,325	)	$	(714,463	)	$	(1,634,753	)	$	(784,296	)	$	(2,585,959	)

Basic and dilutive net loss from continuing operations per share	$	(0.033	)	$	(0.03	)	$	(0.10	)	$	(0.03	)

Basic and dilutive net loss from discontinued operations per share	$	-		$	(0.02	)	$	0.01		$	(0.02	)

Basic and dilutive net loss attributable to Trans-Pacific Aerospace Company, Inc. per share	$	(0.026	)	$	(0.05	)	$	(0.08	)	$	(0.05	)

Weighted average number of common shares outstanding, basic and diluted		25,418,850			14,205,217			19,971,325			15,289,084

See accompanying notes to financial statements

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

							For the Period
							of Inception
	Nine Months Ended						from June 5,
	July 31,						2007, through
	2010			2009			July 31, 2010
Cash flows from operating activities:
Net loss from continuing operations	$	(1,934,204	)	$	(450,448	)	$	(2,556,689	)
Gain (loss) from discontinued operations		115,527			(333,848	)		(213,194	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock based compensation		1,198,385			379,500			1,577,885
Amortization of debt discount		150,850			-			150,850
Gain on disposal of discontinued assets		(115,527	)		-			(115,527	)
Depreciation expense		-			7,500			17,500
Loss from settlment with common stock		22,460			-			22,460
Impairment of fixed assets		-			82,500			82,500
Impairment of oil & gas interests		-			190,000			190,000
Change in operating assets and liabilities:
Accounts receivable		-			19,006			-
Due from related party		(66,400	)		-			(66,400	)
Accounts payable and accrued expenses		115,902			19,685			153,459
Accrued expenses - related party		11,500			-			11,500
Accrued salary and payroll taxes		46,010			16,737			112,958
Accrued interest payable		27,927			60,000			121,262
Net cash used in operating activities		(427,570	)		(9,368	)		(511,436	)

Cash flows from investing activities
Restricted cash acquired in acquisition		1,200,000						1,200,000
Notes receivable		(26,000	)		-			(26,000	)
Equipment		-			-			(100,000	)
Oil & gas working interest		-			-			(100,000	)
Net cash provided by investing activities		1,174,000			-			974,000

Cash flows from financing activities:
Common stock issued for cash		129,982			-			421,265
Net cash provided by financing activities		129,982			-			421,265

Net increase (decrease) in cash		876,412			(9,368	)		883,829
Cash, beginning of the period		7,417			9,368			-

Cash, end of the period	$	883,829		$	-		$	883,829

Supplemental cash flow disclosure:
Interest paid		-			-			-
Taxes paid		-			-			-

Supplemental 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
Common stock issued for conversion of notes payable	$	127,600		$	-		$	127,600
Retirement of common shares	$	-		$	-		$	5,250
Acquisition of oil and gas properties in exchange for note payable	$	-		$	-		$	1,000,000
Acquisition of tooling assets	$	82,500		$	-		$	82,500
Acquisition of intellectual property	$	2,469,404		$	-		$	2,469,404
Acquisition of Godfrey interests	$	1,200,000		$	-		$	1,200,000
Beneficial conversion feature of convertible note payable	$	216,455		$	-		$	216,455

See accompanying notes to financial statements

TRANS-PACIFIC AEROSPACE COMPANY, INC.

(A Development Stage Company)

Statement of Stockholders' Equity (Deficit)

(Unaudited)

													Deficit
													Accumulated
					Additional								during the
	Common Stock				Paid-In			Non-Controlling			Common Stock		Development
	Shares		Amount		Capital			Interest			Payable		Stage			Total

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
Common stock issued for services on February 1, 2010		2,500,000		2,500		620,000			-			-		-			622,500
Common stock issued for acquisition of aerospace assets on February 1, 2010		8,000,000		8,000		1,984,000			-			-		-			1,992,000
Common stock issued for cash on February 16, 2010 at $0.25 per share		80,000		80		19,920			-			-		-			20,000
Common stock issued for cash on March 24, 2010 at $0.25 per share		60,000		60		14,940			-			-		-			15,000
Acquisition of 25% interest in Godfrey (China) Limited on March 30, 2010		-		-		1,200,000			-			-		-			1,200,000
Non-controlling interest resulting from acquisition of 25% interest in Godfrey (China) Limited on March 30, 2010		-		-		(1,826,026	)		1,826,026			-		-			-
Common stock issued for cash on April 5, 2010 at $0.25 per share		168,000		168		41,832			-			-		-			42,000
Common stock issued for employment services on April 30, 2010		300,000		300		49,200			-			-		-			49,500
Beneficial conversion feature of convertible note payable		-		-		216,455			-			-		-			216,455
Common stock issued on June 9, 2010 for acquisition of tooling asset		328,000		328		104,632			-			-		-			104,960
Common stock issued for conversion of note payable on June 9, 2010		1,200,000		1,200		68,400			-			-		-			69,600
Common stock issued for services on June 9, 2010		300,000		300		44,700			-			-		-			45,000
Common stock issued for conversion of notes payable on on June 15, 2010		1,000,000		1,000		57,000			-			-		-			58,000
Common stock payable for Board of Directors services on July 31, 2010				-		-			-			21,750		-			21,750
Common stock payable for employment services on July 31, 2010		-		-		-			-			74,700		-			74,700
Common stock payable for services on July 31, 2010		-		-		-			-			202,200		-			202,200
Net loss from continuing operations for the nine months ended July 31, 2010		-		-		-			(183,924	)		-		(1,634,753	)		(1,818,677	)
Balances, July 31, 2010		26,729,937	$	26,730	$	3,733,759		$	1,642,102		$	298,650	$	(2,585,959	)	$	3,115,282

See accompanying notes to financial statements

Trans-Pacific Aerospace Company, Inc.

(A Development Stage Company)

Notes to Unaudited Financial Statements

NOTE 1 – BACKGROUND AND ORGANIZATION

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 assets 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 11 – 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.

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 11 – Discontinued Operations for further discussion.

The Company’s aircraft component business commenced on February 1, 2010. To date, its operations have focused on product design and engineering. The Company has not commenced commercial manufacture or sales of our products.

The Company designs, manufactures and sells 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. The Company’s initial products are self-lubricating spherical bearings that help with several flight-critical tasks, including aircraft flight controls and landing gear.

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 $1,934,204 and a gain from discontinued operations of $115,527 during the nine months ended July 31, 2010, and an accumulated deficit of $2,585,959 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

Basis of Presentation and Principles of Consolidation

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP").

On March 30, 2010, the Company acquired 25% of the outstanding share capital of Godfrey (China) Limited, a Hong Kong corporation (“Godfrey”), in exchange for the Company’s technology used for the design and production of SAE-AS81820, 81934 and 81935 self-lubricated spherical bearings, bushings and rod-end bearings. The Company legally owns 25% of Godfrey. See Note 4 for further discussion. The consolidated financial statements include the accounts of Trans-Pacific Aerospace Company, Inc. and its controlled variable interest entity, Godfrey. All significant intercompany balances and transactions have been eliminated. The Company records net income attributable to non-controlling interest in the consolidated statements of operations for any non-owned portion of its consolidated VIE. Non-controlling interest is recorded in owners' equity on the consolidated balance sheet.

Unaudited Interim Financial Information

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.

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 July 31, 2010 or October 31, 2009.

As of July 31, 2010, the variable interest entity (Godfrey) is consolidated into the Company’s consolidated financial statements. Godfrey had $883,768 of cash on hand as of July 31, 2010. These cash balances are not available to Trans-Pacific Aerospace Company, Inc. and accordingly have been classified as restricted on the consolidated balance sheets.

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.

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.

Indefinite-lived Intangible Assets

The Company has an indefinite-lived intangible asset relating to purchased blueprints, formulas, designs and processes for manufacturing and production of self-lubricated spherical bearings, bushings and rod-end bearings. The indefinite-lived intangible asset is not amortized; rather, it is tested for impairment at least annually by comparing the carrying amount of the asset with the fair value. An impairment loss is recognized if the carrying amount is greater than fair value.

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.

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.

Beneficial conversion features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

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 losses of $2,585,959. 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 6,000,000 Series A Warrants and 6,000,000 Series B Warrants outstanding as of July 31, 2010 that are not included in the calculation of Diluted EPS as their impact would be anti-dilutive. There were no potential dilutive securities as of July 31, 2009.

	For the						For the
	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2010			2009			2010			2009

Net loss from continuing operations	$	(833,249	)	$	(399,500	)	$	(1,934,204	)	$	(450,448	)

Discontinued operations
Net gain (loss) from discontinued operations		-			(314,963	)		115,527			(333,848	)

Net loss including non-controlling interests	$	(833,249	)	$	(714,463	)	$	(1,818,677	)	$	(784,296	)
Net loss attributable to non-controlling interests		(183,924	)		-			(183,924	)		-
Net loss attributable to Trans-Pacific Aerospace Company, Inc.	$	(649,325	)	$	(714,463	)	$	(1,634,753	)	$	(784,296	)

Basic and dilutive net loss from continuing
operations per share	$	(0.033	)	$	(0.03	)	$	(0.10	)	$	(0.03	)

Basic and dilutive net loss from discontinued
operations per share	$	-		$	(0.02	)	$	0.01		$	(0.02	)

Basic and dilutive net loss attributable to Trans-Pacific
Aerospace Company, Inc. per share	$	(0.026	)	$	(0.05	)	$	(0.08	)	$	(0.05	)

Weighted average number of common
shares outstanding, basic and diluted		25,418,850			14,205,217			19,971,325			15,289,084

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

Recently Adopted and Recently Enacted Accounting Pronouncements

In December 2007, the FASB amended its existing standards for a parent's noncontrolling interest in a subsidiary and the accounting for future ownership changes with respect to the subsidiary. The new standard defines a noncontrolling interest, previously called a minority interest, as the portion of equity in a subsidiary that is not attributable, directly or indirectly, to a parent. The new standard requires, among other things, that a noncontrolling interest be clearly identified, labeled and presented in the consolidated balance sheet as equity, but separate from the parent's equity; that the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income; and that if a subsidiary is deconsolidated, the parent measure at fair value any noncontrolling equity investment that the parent retains in the former subsidiary and recognize a gain or loss in net income based on the fair value of the non-controlling equity investment. The Company adopted the new standard effective July 1, 2009.

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 consolidated 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.

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 – ACQUISITION OF INTANGIBLE ASSETS

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

8,000,000 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 $260,000 of obligations under a convertible note. 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. As the convertible note does not bear interest, the Company recorded the present value of the convertible note obligation at $239,667 and accordingly recorded a convertible note payable for $260,000 and a corresponding debt discount of $20,333. Under the effective interest method, the Company accretes the note obligation to the face amount of the convertible note over the remaining term of the note. Debt discount expense totaled $4,327 and $8,441 for the three and nine months ended July 31, 2010, respectively. See Note 8 for further discussion.

The assumption by the Company of $200,000 of obligations under a note payable plus $11,737 of accrued interest. The holder of the note payable is the mother-in-law of William McKay, the Chairman of the Company’s Board of Directors and Chief Executive Officer. See Note 6 and 8 for further discussion.

Cancellation of $26,000 of HAC's secured promissory notes due to the Company.

The Company acquired intangible intellectual property including blueprints, formulas, designs and processes for manufacturing and production of self-lubricated spherical bearings, bushings and rod-end bearings. The transaction was deemed to be an asset acquisition of research and development pursuant to the FASB standards.

The following table summarizes the entry recorded for the intangible assets acquired:

Intangible assets - intellectual property	$	2,469,404
Debt discount on convertible note		20,333
Common stock		(8,000	)
Additional paid in capital		(1,984,000	)
Convertible note payable		(260,000	)
Note payable - related party		(200,000	)
Accrued interest on note payable		(11,737	)
Cancellation of HAC note receivable		(26,000	)
	$	-

These intellectual property assets are deemed to be indefinite-lived and accordingly are not amortized. The Company does perform an annual review for impairment. There were no impairment indicators during the three and nine months ended July 31, 2010.

NOTE 4 – ACQUISITION OF INTEREST IN GODFREY (CHINA) LIMITED

Godfrey was determined to be a variable interest entity (“VIE”) with the Company being the primary beneficiary of the VIE. The Company was determined to be the primary beneficiary of the VIE as Mr. McKay’s position and Godfrey’s (VIE) dependence on the Company’s technical expertise enable the Company to influence the daily operations and financial affairs of Godfrey (VIE). Additionally, the Company would participate in any losses or returns of the VIE and the VIE is structured whereby a significant portion of its activities either involve or are conducted on behalf of the Company. Pursuant to FASB standards, the Company consolidates the VIE since it is deemed to be the primary beneficiary.

The consolidated financial statements include the accounts of Trans-Pacific Aerospace Company, Inc. and its controlled variable interest entity, Godfrey. All significant intercompany balances and transactions have been eliminated. The Company records net income attributable to non-controlling interest in the consolidated statements of operations for any non-owned portion of its consolidated VIE. Non-controlling interest is recorded in owners' equity on the consolidated balance sheet.

It was determined that 50% or $1,234,702 of the intellectual property assets acquired on February 1, 2010 (as discussed in Note 3) were contributed to Godfrey. The non-controlling interest balance of $1,642,102 at July 31, 2010 is comprised of the following:

75% (or $900,000) of the $1,200,000 restricted cash initially held by Godfrey at the time of the acquisition;

75% (or $926,026) of the $1,234,702 of the intellectual property contributed to Godfrey

Less 75% (or $183,924) of the net loss of Godfrey for the three months ended July 31, 2010

William McKay, the Company’s Chief Executive Officer and Chairman, is the Chief Executive Officer of Godfrey.

The Company determined that the fair value of the restricted cash and intangible assets involved in the transaction approximated their carrying values due to their nature (restricted cash) and recent acquisition (intangible assets). Further, due to the common management of both entities, a step-up in basis was not deemed appropriate under current accounting guidance.

NOTE 5 – 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.

On April 12, 2010, the Company purchased $82,500 of tooling for its proprietary bearings. The Company and the vendor agreed that 328,000 shares of common stock would be issued as payment in full for the tooling assets. As the value of the common stock obligation totaled $104,960 at April 12, 2010 (the closing stock price was $0.32 per share on April 12, 2010), the Company recorded in equity $104,960 and recorded a corresponding loss on settlement with stock for $22,460 for the difference between the value of the common stock to be issued and the value of the tooling asset acquired. On June 9 2010, the Company issued 328,000 shares of common stock to pay the obligation in full. In May 2010, the Company sold the tooling to Godfrey. Gains from the sale of the tooling assets are eliminated in consolidation. See Note 6, 10 and Note 12 for further discussion.

NOTE 6 - RELATED PARTY TRANSACTIONS

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 former Chief Financial Officer and former Secretary, is the Chief Financial Officer of Cardiff. Keith Moore and David Walters, former members of our board of directors, each own 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 expired June 28, 2010. The Company incurred $90,500 and $10,000 in consulting fees under the terms of the agreement for the nine months ended July 31, 2010 and 2009, respectively, which is included in consulting expenses. 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 July 31, 2010, $49,500 was 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. The Series A warrant has an exercise price of $0.50 and 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. The Series B warrant has an exercise price of $1.00 and 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.

On June 29, 2009, the Company entered into an Employment Agreement with David Walters, its former Chief Executive Officer and former member of its Board of Directors. 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 had 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 is 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 $15,000 under the terms of the agreement for the nine months ended July, 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 July 31, 2010, no amounts were outstanding under the agreement. On October 19, 2010 the Placement Agency and Advisory Services Agreement was terminated by mutual agreement of the parties.

As part of the acquisition of intellectual property assets from HAC, the Company assumed $200,000 of obligations under a note payable plus $11,737 of accrued interest. The holder of the note payable (Theodora Kobal) is the mother-in-law of William McKay, the Chairman of the Company’s Board of Directors and Chief Executive Officer. On June 4, 2010, the Company entered into an amended and restated convertible promissory note with Theodora Kobal which amended and restated in its entirety the Promissory Note in the original principal amount of $200,000 issued by HAC to Theodora Kobal on March 16, 2009, and assumed by the Company on February 1, 2010 in connection with its acquisition of the assets of HAC. The amended and restated note has a principal amount of $216,455 which included all outstanding interest due on the note. The amended and restated note includes a fixed conversion price of $0.058 per share, 7% interest rate per annum and is due and payable on June 3, 2011. In June 2010, the Company issued 2,200,000 shares of common stock to the note holder reducing its principal obligation by $127,600 pursuant to conversion requests.

On February 15, 2010, the Company entered into a Placement Agency and Advisory Services Agreement with Monarch Bay Associates, LLC (“MBA”). MBA is a FINRA registered firm. Keith Moore and David Walters, former members of the Company’s board of directors, are members of (and each owns 50% of the ownership interests in) MBA. Under the agreement, MBA acts as the Company’s placement agent on an exclusive basis with respect to private placements of its capital stock and as its 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 the Company in any private placement (plus warrants to purchase 8% of the number of shares of common stock issued or issuable by the Company in connection with the private placement) and (b) up to 5% of the total consideration paid or received by the Company or its 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. On October 19, 2010 the Placement Agency and Advisory Services Agreement was terminated by mutual agreement of the parties.

In May, 2010, Harbin Aerospace Company, LLC received a payment of $132,880 from Godfrey (China) Limited in respect of the purchase price for equipment tooling that the Company provided to Godfrey. Harbin Aerospace is 100% owned by our Chief Executive Officer and his wife. Under the terms of our Asset Purchase Agreement with Harbin Aerospace, the payment from Godfrey was properly payable to us and not Harbin Aerospace. Harbin Aerospace has since applied the full amount received from Godfrey in payment of expenses on our behalf. As of July 31, 2010, our balance sheet reflects an amount due from Harbin Aerospace of $66,400 in respect of these funds.

On October 19, 2010, the Company entered into a settlement and release agreement with Cardiff Partners, LLC, Monarch Bay Associates, LLC, David Walters, Keith Moore and Matt Szot (collectively, the "Cardiff Parties") . Under the settlement and release agreement, the Company terminated the Cardiff Agreement, the MBA Placement Agency and Advisory Services Agreement and all of the other agreements and arrangements with the Cardiff Parties in exchange for issuing 1,838,649 shares of the Company’s common stock to Cardiff Partners. The Company also agreed to a mutual release of claims with the Cardiff Parties.

NOTE 7 - 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 3- Acquisition of Intangible Assets.

NOTE 8 – NOTES 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 11 – Discontinued Operations for further discussion.

As part of the acquisition of intellectual property assets from HAC, the Company assumed $260,000 of obligations under a convertible note. 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. As the convertible note does not bear interest, the Company recorded the present value of the convertible note obligation at $239,667 and accordingly recorded a convertible note payable for $260,000 and a corresponding debt discount of $20,333. Under the effective interest method, the Company accretes the note obligation to the face amount of the convertible note over the remaining term of the note. Debt discount expense totaled $4,327 and $8,441 for the three and nine months ended July 31, 2010, respectively. The Company performed an evaluation and determined that the anti-dilution clause did not require derivative treatment.

As part of the acquisition of intellectual property assets from HAC, the Company assumed $200,000 of obligations under a note payable plus $11,737 of accrued interest. The holder of the note payable (Theodora Kobal) is the mother-in-law of William McKay, the Chairman of the Company’s Board of Directors and Chief Executive Officer. The note bears interest at 7% per annum and principal and interest are due and payable on March 31, 2011. On June 4, 2010, the Company entered into an amended and restated convertible promissory note with Theodora Kobal which amended and restated in its entirety the Promissory Note in the original principal amount of $200,000 issued by HAC to Theodora Kobal on March 16, 2009, and assumed by the Company on February 1, 2010 in connection with its acquisition of the assets of HAC. The amended and restated note has a principal amount of $216,455 which included all outstanding interest due on the note. The amended and restated note includes a fixed conversion price of $0.058 per share, 7% interest rate per annum and is due and payable on June 3, 2011. The Company has evaluated the conversion feature of the notes and determined that there was a $216,455 beneficial conversion feature on certain notes as the fixed conversion price of $0.058 was less than the fair value of the common stock at the time of issuance. The beneficial conversion feature was recorded as a debt discount on the accompanying balance sheet. During the three and nine months ended July 31, 2010, debt discount expense totaled $142,409.

In June 2010, the Company issued 2,200,000 shares of common stock to the note holder reducing its principal obligation by $127,600 pursuant to conversion requests.

NOTE 9 - 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 6 for further discussion.

Employment Agreements

On February 1, 2010, the Company entered into an Employment Agreement with William McKay. Under the agreement, Mr. McKay will receive a base salary of $180,000, plus an initial bonus of 1,200,000 shares of the Company’s 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.

Legal

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

NOTE 10 – CAPITAL STOCK TRANSACTIONS

The Company is authorized to issue up to 150,000,000 shares of its $0.001 common stock. At July 31, 2010, there were 26,729,937 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 20,000 shares of common stock pursuant to this agreement closed on January 20, 2010. The sale 80,000 shares of common stock pursuant to this agreement closed on February 16, 2010. The sale 60,000 shares of common stock pursuant to this agreement closed on March 24, 2010. The sale of 168,000 shares of common stock pursuant to this agreement closed on April 5, 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.

On February 1, 2010, the Company issued 8,000,000 shares of the Company’s common stock as part of the acquisition of intellectual property from HAC. The shares were valued based on the closing stock price on the date of grant. Pursuant to this agreement, the Company also issued (i) 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 and (ii) 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.

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. The shares were valued based on the closing stock price on the date of grant.

During the nine months ended July 31, 2010, the Company issued 300,000 shares of the Company’s common stock to Mr. McKay pursuant to his employment agreement. The shares were valued based on the closing stock price on the date of the agreement. At July 31, 2010, the Company recorded a common stock payable totaling $74,700 for shares issuable pursuant to the agreement.

In June 2010, the Company issued 2,200,000 shares of common stock to the note holder reducing its principal obligation by $127,600 pursuant to conversion requests.

On June 5, 2010, the Company hired Equiti-trend as the Company’s public and investor relations, to perform public and investor relations under the terms set forth in the engagement letter. Pursuant to the engagement letter, the Company agreed to issue Equiti-trend up to 1,800,000 shares of the Company’s restricted common stock as sole compensation for its services for a six-month service period. The Company issued 300,000 restricted common shares upon execution of the agreement and will issue the remaining shares ratably over the remaining term of the agreement. At July 31, 2010, the Company has a common stock payable of $90,000 for the 600,000 shares of common issuable pursuant to the agreement. The shares were valued based on the closing stock price on the date of the agreement.

On June 9 2010, the Company issued 328,000 shares of common stock which was valued at $104,960 for the tooling assets it acquired in April 2010.

As of July 31, 2010, the Company recorded a common stock payable of $87,000 for shares issuable to principals of Cardiff. The shares were valued based on the closing stock price on the date of the restricted stock grant.

As of July 31, 2010, the Company recorded a common stock payable of $21,750 for the 75,000 common shares issuable to the Company’s Board of Directors for services. The shares were valued based on the closing stock price on the date of the restricted stock grant.

NOTE 11 – 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 and accrued interest of $115,527. The Company recorded a gain on disposal of assets totaling $115,527 for the three and nine months ended July 31, 2010. Pursuant to FASB standards, the Company has retro-actively presented its oil and gas business as discontinued operations.

The Company’s gain from discontinued operations for the three and nine months ended July 31, 2010 totaled $115,527. The Company’s loss from discontinued operations for the three and nine months ended July 31, 2009, totaled $314,963 and $333,848, respectively. The Company’s loss from discontinued operations since inception through July 31, 2010, totaled $213,194. Prior year financial statements have been restated to present the discontinued operations.

NOTE 12 – SUBSEQUENT EVENTS

On October 19, 2010, the Company entered into a settlement and release agreement with the Cardiff Parties. Under the settlement and release agreement, the Company terminated the Cardiff Agreement, the MBA Placement Agency and Advisory Services Agreement and all of the other agreements and arrangements with the Cardiff Parties in exchange for issuing 1,838,649 shares of the Company’s common stock to Cardiff Partners. The Company also agreed to a mutual release of claims with the Cardiff Parties.

As of July 31, 2010, our balance sheet reflects an amount due from Harbin Aerospace of $66,400. Harbin Aerospace has since applied the full amount received from Godfrey in payment of expenses on our behalf. See Note 6 for further discussion of related party transactions.

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.

Our aircraft component business commenced on February 1, 2010. 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.

As we execute our business strategy in the fiscal years ending October 31, 2010 and October 31, 2011, 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.

Interest in Godfrey (China)

On March 30, 2010, we acquired 25% of the outstanding share capital of Godfrey (China) Limited, a Hong Kong corporation (“Godfrey”), in exchange for our technology used for the design and production of SAE-AS81820, 81934 and 81935 self-lubricated spherical bearings, bushings and rod-end bearings. To date, Godfrey has raised $1.2 million to fund operating expenses and the establishment of a manufacturing facility in mainland China. Godfrey has formed a Wholly Foreign Owned Enterprise (WFOE) in China through which it intends to do

business in the domestic China market and export its goods globally.

In September 2010, Godfrey opened a production facility, in Guangzhou, Guangdong. That facility is currently preparing to enter the “qualification” process for approval by the United States Navy. If approved, the Guangzhou facility would be placed on the Society of Automotive Engineers (SAE) Qualified Producers List, allowing all Chinese and international airframe manufacturers, sub-tier suppliers, MRO facilities, airlines and distributors to purchase parts produced there. The Guangzhou facility, located in close proximity to Hong Kong and Guangzhou would be the first facility in China qualified for the production of SAE-AS81820, SAE-AS81934 and SAE-As81935 spherical bearings, bushings and rod end bearings, components used extensively in commercial aircraft.

We currently anticipate the Guangzhou facility will enter the qualification process in October 2010 and will complete qualification in late November or early December 2010. The current schedule would enable the Guangzhou facility to commence commercial deliveries in early 2011.

William McKay, our Chief Executive Officer and Chairman, is the President of Godfrey.

The consolidated financial statements include the accounts of Trans-Pacific Aerospace Company, Inc. and its controlled variable interest entity, Godfrey. All significant intercompany balances and transactions have been eliminated. The Company records net income/loss attributable to non-controlling interest in the consolidated statements of operations for any non-owned portion of its consolidated VIE. Non-controlling interest is recorded in owners' equity on the consolidated balance sheet.

Results of Operations

Three and Nine Months Ended July 31, 2010, Compared to Three and Nine Months Ended July 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 second quarter of fiscal year 2011. 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 $684,192 for the fiscal quarter ended July 31, 2010 compared to $379,500 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 $343,650 for the (i) 300,000 shares of our common stock issued and 600,000 shares payable for public and investor relation services pursuant to our Agreement with Equiti-trend (ii) 300,000 shares of our common stock payable pursuant to an employment agreement with William Reed McKay, our Chairman and Chief Executive Officer, (iii) 75,000 shares of our common stock payable for Board of Director services, and (iv) 300,000 shares of our common stock payable for chief financial officer services. Operating expenses for the quarter ended July 31, 2010 also include $36,000 of consulting fees, $29,125 of other professional fees, and $275,417 of other general and administrative expenses including $245,232 specific to our VIE Godfrey. Operating expenses in the comparable period in the prior year consist of $379,500 of stock based compensation charges for the issuance of common stock to our former Chief Executive Officer and former Chief Financial Officer.

Operating expenses from continuing operations totaled $1,755,461 for the nine months ended July 31, 2010 compared to $390,448 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 $1,198,385. The stock based compensation charges are for the following: (i) 2,500,000 shares of our common stock issued for services pursuant to our Amended Support Services Agreement with Cardiff Partners, LLC, (ii) 300,000 shares of our common stock issued and an additional 300,000 shares payable pursuant to an employment agreement with William Reed McKay, our Chairman and Chief Executive Officer, (iii) 448,340 shares of our common stock issued for payment on outstanding liabilities pursuant to our Amended Support Services Agreement with Cardiff Partners, LLC, (iv) 941,514 shares of our common stock issued for payment on outstanding wages pursuant to an employment agreement with David Walters, our former Director and former Chief Executive Officer, (v) 300,000 shares of our common stock issued and 600,000 shares payable for public and investor relation services pursuant to our Agreement with Equiti-trend, (vi) 75,000 shares of our common stock payable for Board of Director services, and (vii) 300,000 shares of our common stock payable for chief financial officer services. Operating expenses for the nine months ended July 31, 2010 also include $96,000 of consulting fees, $62,611 of other professional fees, and $398,465 of other general and administrative expenses including $245,232 specific to our VIE Godfrey. Operating expenses in the comparable period in the prior year consist of $379,500 of stock based compensation charges for the issuance of common stock to our former Chief Executive Officer and former Chief Financial Officer.

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 asset 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. We recorded a gain on disposal of assets totaling $0 and $115,527 for the three and nine months ended July 31, 2010, respectively. Pursuant to FASB standards, we have retro-actively presented our oil and gas business as discontinued operations.

Our gain from discontinued operations for the three and nine months ended July 31, 2010 totaled $0 and $115,527, respectively. Our loss from discontinued operations for the three and nine months ended July 31, 2009, totaled $314,963 and $333,848, respectively. Our loss from discontinued operations since inception through July 31, 2010, totaled $213,194. 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 $1,755,461 and $390,448 for the nine months ended July 31, 2010 and 2009, respectively and have an accumulated deficit of $2,585,959 at July 31, 2010. At July 31, 2010, we had cash balances of $61. At July 31, 2010, our variable interest entity (Godfrey) is consolidated into our consolidated financial statements. Godfrey had $883,768 of cash on hand as of July 31, 2010. These cash balances are not available to Trans-Pacific Aerospace Company, Inc. and accordingly have been classified as restricted on our consolidated balance sheets.

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 second quarter of fiscal year 2011. 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.

The aircraft component part business is capital intensive. Execution of our business strategy will 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 and the fiscal year ending October 31, 2011. 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 July 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

Issuance of Shares for Non-Cash Consideration

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.

Consolidation of Variable Interest Entities

Recently Issued 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 consolidated financial statements.

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 July , 2010.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk.

None.

Item 4T.

Controls and Procedures.

Evaluation of Disclosure and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports made pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). is recorded, processed, summarized and reported within the timelines specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter covered by this report.

Based on the foregoing, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of period covered by this report due to the identification of the material weaknesses in internal control over financial reporting described below. Notwithstanding the material weaknesses described below, management believes the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Material Weaknesses in Internal Control Over Financial Reporting

A material weakness is a control deficiency, or combination of control deficiencies, that results in a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. In connection with the preparation of our consolidated financial statements for the fiscal quarter ended July 31, 2010, we have identified the following control deficiencies, which represent material weaknesses in the Company's internal control over financial reporting as of July 31, 2010:

We did not have sufficient access to the books and records of Godfrey (China) Limited to permit us to prepare our consolidated financial statements, including the results of operations and financial condition of Godfrey as a variable interest entity. As a result, we did not timely file with the Securities and Exchange Commission this Quarterly Report on Form 10-Q and we were not compliant with the periodic reporting requirements under the Exchange Act.

We did not maintain effective controls with respect to reviewing and authorizing related party transactions. Specifically, our control procedures did not prevent Godfrey from making payments to related parties. Accordingly, management has concluded that this control deficiency constitutes a material weakness.

Management's Remediation Initiatives

During the fourth quarter of fiscal year 2010, we plan to remediate these material weaknesses as follows:

We have assessed the information that we require from Godfrey to prepare our consolidated financial statements, and will implement policies and procedures designed to provide us sufficient access to such information to meet our periodic reporting requirements on a timely basis.

We will implement policies and procedures that will require independent director approval of all related party transactions prior to occurring and ensure appropriate preventative controls are in place.

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. However, we intend to implement the remedial initiatives described above in the fourth quarter of fiscal year 2010.

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

None.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Removed and Reserved

Item 5.

Other Information.

Pursuant to an agreement, dated January 19, 2010, regarding the formation of Godfrey (China) Limited, William Reed McKay, our Chairman and Chief Executive Officer, receives $10,000 per month from Godfrey as compensation for serving as president of Godfrey.

On October 19, 2010, Keith Moore and David Walters resigned as members of our Board of Directors. The resignations of Messrs. Moore and Walters were not because of a disagreement with us regarding our operations, policies or practices.

On October 19, 2010, Matt Szot resigned as our Chief Financial Officer. Our Chief Executive Officer, William Reed McKay, has assumed the position on an interim basis.

On October 19, 2010, our Support Services Agreement with Cardiff Partners, LLC and our Placement Agency and Advisory Services Agreement with Monarch Bay Associates, LLC were both terminated by mutual agreement of the parties. In connection with the termination, we entered into a settlement and release agreement with Cardiff Partners, LLC, Monarch Bay Associates, LLC, David Walters, Keith Moore and Matt Szot (collectively, the "Cardiff Parties") . Under the settlement and release agreement, we terminated the Support Services Agreement, the Placement Agency and Advisory Services Agreement and all of the other agreements and arrangements with the Cardiff Parties in exchange for issuing 1,838,649 shares of the Company’s common stock to Cardiff Partners. We also agreed to a mutual release of claims with the Cardiff Parties.

Item 6.

Exhibits.

No.		Description

Exhibit 10.1		Agreement dated January 19, 2010 regarding formation of Godfrey (China) Limited*
Exhibit 10.2		Cardiff Settlement and Release Agreement*
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 and 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

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:

October 20,

2010

Trans-Pacific Aerospace

Company, Inc.

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

EXHIBIT INDEX

No.		Description

Exhibit 10.1		Agreement dated January 19, 2010 regarding formation of Godfrey (China) Limited*

Exhibit 10.2		Cardiff Settlement and Release Agreement*

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 and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

Attached files

Trans-Pacific Aerospace Company, Inc. Reports

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