TRANSACT ENERGY CORP - Quarter Report: 2010 March (Form 10-Q)

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 March 31, 2010.

or

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

For the transition period from _______________________ to ___________________________

Commission File Number: 333-139746

TRANSACT ENERGY CORP.

(Exact name of registrant as specified in its charter)

Nevada	98-0515445
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
105-5119 Beckwith Blvd., San Antonio, TX	78249
(Address of principal executive offices)	(Zip Code)

210-561-6015

(Registrant’s telephone number, including area code)

_______________________________________________________

(Former name, former address and former fiscal year, 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.  X . Yes      . 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 (§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 files).       . Yes      . 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 the 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	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.      . Yes      . No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of March 31, 2010: 10,502,000

---

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2010 and 2009 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2009 audited financial statements. The results of operations for the periods ended March 31, 2010 and 2009 are not necessarily indicative of the operating results for the full year.

2

---

TRANSACT ENERGY CORP.

[A Development Stage Company]

INTERIM FINANCIAL STATEMENTS

MARCH 31, 2010

______________

(Unaudited)

3

---

TRANSACT ENERGY CORP.

 [A Development Stage Company]

(Unaudited)

CONTENTS

	PAGE
Interim Balance Sheets	5
Interim Statements of Operations	6
Interim Statements of Cash Flows	7
Notes to Interim Financial Statements	8

4

---

TRANSACT ENERGY CORP.

(A Development Stage Company)

__________________________

INTERIM BALANCE SHEETS

		(Unaudited)		(Audited)
		March 31,		December 31,
		2010		2009
ASSETS
Current
Cash	$	9	$	3,800
Interest receivable		21,296		11,770
Loans receivable - related party		248,521		248,521
Total Current Assets		269,826		264,091
Investment In Lease		12,684		12,684
Software		3,093		3,383
	$	285,603	$	280,158
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable	$	146,191	$	83,053
Accrued interest		6,927		3,094
Notes payable - Related parties		114,246		92,964
Total Current Liabilities		267,364		179,111
Stockholders' Equity
Preferred stock, $.001 par value,
10,000,000 shares authorized no shares issued and outstanding
Common Stock, $.001 par value,
100,000,000 shares authorized
10,502,000 shares issued and outstanding		10,502		10,502
Capital in excess of par value		370,699		370,699
Deficit accumulated during the development stage		(362,962)		(280,154)
Total Stockholders' Equity		18,239		101,047
	$	285,603	$	280,158

The accompanying notes are an integral part of these financial statements.

5

---

TRANSACT ENERGY CORP.

(A Development Stage Company)

__________________________

INTERIM STATEMENTS OF OPERATIONS

(Unaudited)

		Cumulative
		from inception
		March 15, 2006		Three months ended		Three months ended
		March 31,		March 31,		March 31,
		2010		2010		2009
REVENUE	$	-	$	-	$	-
EXPENSES
General and administrative		293,193		88,500		9,855
Unsuccessful lease purchases		18,673		-		-
Total Expenses		311,866		88,500		9,855
LOSS BEFORE OTHER INCOME (EXPENSE)		(311,866)		(88,500)		(9,855)
Interest income		21,295		9,525		-
Interest expense		(72,391)		(3,833)		(247)
LOSS FROM OPERATIONS BEFORE INCOME TAXES		(362,962)		(82,808)		(10,102)
CURRENT TAX EXPENSE		-		-		-
DEFERRED TAX EXPENSE		-		-		-
NET LOSS	$	(362,962)	$	(82,808)	$	(10,102)
LOSS PER COMMON SHARE			$	(0.01)	$	(0.00)

The accompanying notes are an integral part of these financial statements.

6

---

TRANSACT ENERGY CORP.

(A Development Stage Company)

__________________________

INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of these financial statements.

7

---

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO INTERIM FINANCIAL STATEMENTS

MARCH 31, 2010

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – TransAct Energy Corp. (“the Company”) was organized under the laws of the State of Nevada on March 15, 2006. The Company is in the business of developing and managing power production facilities globally primarily using alternative/sustainable energy sources. The Company has not generated significant revenues and is considered a development stage company as defined in Accounting Standards Codification (“ASC”) Topic No. 915. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.

Interim Condensed Financial Statements - The accompanying interim financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2010 and 2009 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2009 audited financial statements. The results of operations for the periods ended March 31, 2010 and 2009 are not necessarily indicative of the operating results for the full year.

Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.

Software and related amortization - Software is recorded at cost and the Company provides for amortization using the straight line method over 3 years.

Income Taxes - The Company accounts for income taxes in accordance with ASC Topic No. 740, “Accounting for Income Taxes”.

The Company adopted the provisions of ASC Topic No. 740, “Accounting for Income Taxes”, on January 1, 2007. As a result of the implementation of ASC Topic No. 740, the Company recognized approximately no increase in the liability for unrecognized tax benefits.

The Company has no tax positions at March 31, 2010 and 2009 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the periods ended March 31, 2010 and 2009 and years ended December 31, 2009 and 2008, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at March 31, 2010 and 2009.

Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with ASC Topic No. 260, “Earnings Per Share” [See Note 9].

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

8

---

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO INTERIM FINANCIAL STATEMENTS

MARCH 31, 2010

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Enacted Accounting Standards – In June 2009 the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2010-18 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

Investment in leases – All costs such as bid fees and lease rental payments related to the acquisition of oil and gas leases are deferred and amortized on a straight-line basis over the term of the lease. (See Note 3)

Foreign currency translation - Transactions in foreign currencies are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the weighted average exchange rate for each period for revenues, expenses, gains and losses. Translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) when material and foreign currency transaction gains and losses are recorded in other income and expense.

Stock offering costs – Costs incurred in connection with stock offerings will be deferred and offset against the proceeds of the stock offering. Costs incurred in connection with unsuccessful offerings will be expensed.

NOTE 2 – LOANS RECEIVABLE – RELATED PARTY

The $212,000, $12,521, $12,000, $5,000 and $7,000 loans receivable from a company with common ownership, are unsecured and are due on June 7, June 17, November 1, November 10 and November 29, 2010 respectively. The loans are secured by certain assets and equipment of the company and bear interest at rates between 15% and 18% per annum for the terms of the loans. At March 31,2010 and 2009 Interest receivable was $ 21,296 and $ 0 respectively.

NOTE 3 - INVESTMENT IN LEASE

On September 7, 2006 the Company acquired a 100% interest in a Petroleum and Natural Gas Lease from the province of Alberta, Canada for $12,051 cash. To date the Company has paid annual lease payments of $633 for a total capitalized cost of $ 12,684. The lease is for a 5 year term and calls for annual rental and royalty payments in accordance with the Mines and Mineral Act of Alberta.

NOTE 4 – SOFTWARE

		Cost		Accumulated Amortization		Net Book Mar 31, 2010		Value Dec 31,2009
Software	$	3,480	$	387	$	3,093	$	3,383

9

---

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO INTERIM FINANCIAL STATEMENTS

MARCH 31, 2010

(Unaudited)

NOTE 5 – NOTES PAYABLE – RELATED PARTIES

a) The $10,000 convertible promissory note payable to a company with common ownership is unsecured, bears interest at 10% per annum and was due and payable on March 31, 2010. The payee had the option to convert the entire principal amount on or before March 31, 2010 into common shares of the Company based on a conversion rate of $.00345 per share and no interest was due if the principal is converted to shares of the Company. No shares were converted and the Company is currently negotiating with the lender to repay the loan with interest.

b) The $17,500 promissory note payable to a company with common ownership is unsecured, bears interest at 10% per annum and is due on demand.

c) The $12,000, $5,000, $7,000 and $41,464 promissory notes payable to an officer and shareholder are secured by certain assets and equipment of the Company, bear interest at 18% and 8% per annum and are due on November 1, November 10, November 29, and December 10, 2010 respectively. The notes are convertible into common stock at $.01 per share at the option of the note holder. A beneficial conversion feature was recorded in the amount of $65,464 and charged to interest expense during 2009.

d) The $ 18,281 promissory notes payable to an officer and shareholder and $3,000 promissory note payable to a former officer are secured by certain assets and equipment of the Company, bear interest at 8% per annum and are due on demand.

Accrued interest for the notes at March 31,2010 was $6,927 and at December 31, 2009 was $3,094.

NOTE 6 - CAPITAL STOCK

Preferred Stock - The Company has authorized 10,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares are issued and outstanding at December 31, 2009.

Common Stock – The Company has authorized 100,000,000 shares of common stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors.

During April 2006, the Company issued 8,500,000 shares of its previously authorized, but unissued common stock. Total proceeds from the sale of stock amounted to $8,500 (or $.001 per share).

During August 2006, the Company issued 900,000 shares of its previously authorized, but unissued common stock. Total proceeds from the sale of stock amounted to $45,000 (or $.05 per share).

During September 2009, the Company issued 1,102,000 shares of its previously authorized, but unissued common stock. Total proceeds from the sale of stock amounted to $275,500 (or $.25 per share). Offering costs of $ 13,263 were netted against the proceeds.

NOTE 7 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company was only recently formed and has incurred losses since its inception. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans and/or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

10

---

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO INTERIM FINANCIAL STATEMENTS

MARCH 31, 2010

(Unaudited)

NOTE 8 - RELATED PARTY TRANSACTIONS

Management Compensation - For the three month period ended March 31, 2010 the Company has paid $ 22,500 and accrued $30,242 of compensation to officers of the Company. ( see Note 10). The Company has also agreed to issue 25,000 shares of common stock to a former officer which has been accrued as a liability in the amount of $6,250 at March 31, 2010.

Office Space - The Company shares office space with a related company of an officer/shareholder on a month to month basis. During the three month period ended March 31, 2010 the Company has accrued $ 3,150 for the use of office space, telephone, fax and office equipment. During the year ended December 31, 2009 the Company had a payable of $ 11,610 for the use of telephone, fax and office equipment ( See also Notes 2 and 5)

NOTE 9 - LOSS PER SHARE

The following data show the amounts used in computing loss per share for the periods presented:

		Three months ended		Three months ended
		March 31,		March 31,
		2010		2009
Loss from operations available to common shareholders
(numerator)	$	( 82,808)	$	(10,102)
Weighted average number of common shares
outstanding during the period used in loss per
share (denominator)		10,502,000		9,400,000

Dilutive loss per share was not presented, as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share.

NOTE 10 – COMMITMENTS

Effective October 1, 2009 through September 30, 2011, the Company entered into a compensation agreement with Shahhid Shafiq Vohra to assist the Company with business development in Asia for consideration of $90,000 annually for the contract period plus 100,000 common shares of the Company valued at $0.25 per share. The value of $25,000 regarding the unissued common shares has been reflected as a liability in the financial statements at this time.

During January 2010 the Company entered into an agreement with an outside consultant to serve as the Chief Financial Officer of the Company through December 31, 2010 with continuing one month extensions until cancelled. Compensation for the services will be $12,500 per month and is payable in common stock of the Company until such time as the Company secures its first $500,000. Compensation valued at $30,242 has been accrued as a liability at March 31, 2010.

In February, 2010, the Board of Directors of TransAct Energy appointed Rod Bartlett as the new President, Chief Executive Officer and as an independent director. The Company is currently in the process of finalizing the terms of a compensation agreement with its new President and Chief Executive Officer.

NOTE 11 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued.

11

---

ITEM 2. PLAN OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

FORWARD-LOOKING STATEMENT NOTICE

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

OUR BUSINESS

We formed as a Nevada corporation on March 15, 2006 as TransAct Energy Corp. Our activities have been limited to developing and writing our business plan and the purchase of an oil and gas lease. On September 7, 2006 we acquired 100% interest in a Petroleum and Natural Gas Lease from the province of Alberta, Canada for $12,051 cash, the MedHat Project. As of the date of this report, the Company has not commenced operations on its oil and gas lease in favor of actively seeking other opportunities in the sustainable energy sector.

PLAN OF OPERATION

We anticipate we will divest ourselves of our only oil and gas lease and instead focus our efforts on acquiring alternative energy companies primarily producing power from clean sustainable energy sources. These sources will include but will not be limited to geothermal, solar and wind. Our revenues will be generated by selling power under power purchase agreements with public and private electrical utilities. The Company will focus its efforts on long-term projects with immediate access to development capital and a market to sell the clean power.

RESULTS OF OPERATIONS

During the three months ended March 31, 2010, the Company has engaged in no significant operations other than maintaining its reporting status with the SEC.

Results of Operations – Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

No revenues were received by the Company during the three months ended March 31, 2010 or 2009. Our general and administrative expenses were $88,500 for the three months ended March 31, 2010 compared to $9,855 for the same period in 2009.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2010, we have $9 in cash, $12,684 investment in oil and gas lease, interest receivable of $21,296, and loans receivable of $248,521. Our current liabilities consist of accounts payable in the amount of $146,191 and notes payable of $114,246 with accrued interest of $6,927.

NEED FOR ADDITIONAL FINANCING

Proposed Public Offering of Common Stock - The Company made a public offering of up to 2,000,000 shares of common stock. The Company filed a registration statement with the United States Securities and Exchange Commission on Form S-1. The offering was declared effective on December 12, 2008. An offering price of $.25 per share had arbitrarily been determined by the Company. The offering was managed by the Company without any underwriter. The shares were offered and sold by officers and directors of the Company, who received no sales commissions or other compensation in connection with the offering, except for reimbursement of expenses actually incurred on behalf of the Company in connection with the offering. The Company filed a post-effective amendment to its registration statement which was declared effective on July 17, 2009. The offering was closed at August 31, 2009. The Company raised a total of $275,500 and subsequently issued 1,102,000 common shares.

12

---

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required by smaller reporting companies.

ITEM 4T. CONTROLS AND PROCEDURES.

(a)

Evaluation of Disclosure Controls and Procedures. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). We are committed to maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures and implementing controls and procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2010, the end of the period covered by this report.

(b)

Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls or procedures over financial reporting, known to the chief executive officer or the chief financial officer that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

No legal proceedings are threatened or pending against TransAct Energy Corp. or any of our officers or directors. Further, none of our officers, directors or affiliates are parties against TransAct Energy Corp., or have any material interests in actions that are adverse to our own.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The Company did not sell or issue any securities during the period covered by this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. (REMOVED AND RESERVED)

 

ITEM 5. OTHER INFORMATION.

None

13

---

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

(b) Reports on Form 8-K

None

*

The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

14

---

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.

TRANSACT ENERGY CORP.

 

Date: May 11, 2010

By: /s/ Rod Bartlett       

Rod Bartlett

President,

Chief Executive Officer

15