Statement of Allegations: In the Matter of Thomas Hinke

STATEMENT OF ALLEGATIONS
OF STAFF OF THE ONTARIO SECURITIES COMMISSION

1. Thomas Hinke (“Hinke”) is an individual residing in Ontario. During the time period April 11, 2005 to January 3, 2006 (the “Material Period”), Hinke held in excess of 10% of the shares of Thermal Energy International Inc. (“TEI”). In addition to holding in excess of 10% of the shares of TEI, during the material period, Hinke held the position of Chief Technical Officer until his termination on June 23, 2005.

2. TEI was incorporated pursuant to the laws of Ontario and is a reporting issuer, as defined in the Securities Act, R.S.O. 1990 c. S.5.

3. Prior to the Material Period Hinke held a number of senior officer and director positions at TEI. During the period March 11, 2005 to March 17, 2005 Hinke resigned as Chief Compliance Officer, Chief Financial Officer, Director and Co-Chair of the Board.

4. During the Material Period Hinke executed trades over 32 time periods in TEI, which resulted in the reduction of Hinke’s holdings in TEI from 16.1% to 11.5%. The trades resulted in the sale of 870,050 shares valued at a total of $188,518.40 in TEI during the Material Period. The sales were executed through the following accounts:

• account no. BC 12346C held by Hinke at Bolder Investment Partners (“Bolder”)
• account no. 04306160 held by Hinke at Global Securities Corporation (“Global”)
• account no. 5650471013 held by Hinke at CIBC World Markets Inc. (“CIBC”)

5. For each of the above-noted trades in TEI, Hinke failed to file an insider report as required by the Act.

6. On December 12, 2005, Hinke was notified by Staff of the Commission of the failure to file reports as noted above. Notwithstanding this notice, Hinke continued to trade in shares of TEI and continued to file insider reports on a delinquent basis, as more particularly detailed in Schedule “A” attached hereto. Subsequently, Hinke brought current all insider reports for the Material Period.

7. Section 107(2) of the Ontario Securities Act, R.S.O. 1990, c.S.5, as amended requires Hinke to file a report of each change in his direct or indirect beneficial ownership of the reporting issuer, TEI. Section 107(2) required Hinke to file the reports within 10 days from the day the change in ownership took place.

8. Pursuant to a an Executive Director’s Settlement Agreement dated April 9, 2002 between Hinke and the Executive Director of the Commission (the “Agreement”), Hinke acknowledged that he had contravened Ontario Securities law by failing to file insider reports pursuant to s. 107(2) for trades of shares in TEI. Pursuant to the terms of the Agreement, Hinke undertook to comply with all regulatory filing requirements in relation to TEI and was ordered to pay $8,000 to the Ontario Securities Commission’s Investor Education Fund.

9. The failure to file insider trading reports was a failure to comply with his Agreement and undertaking.

10. By failing to file insider trading reports as required by section 107(2) and by breaching the express terms of the Agreement, Hinke has repeatedly breached Ontario securities law and engaged in conduct contrary to the public interest.

Schedule A
Hinke		Bolder Acct. BC12346C
Date	Buy/Sell	Quanity	Price	Cdn/USD	Report Filed	Date of Filing	Late Filing	Value
4/11/2005	Sell	8,500	0.330	C	Yes	12/29/2005	Yes	2,805.00
4/11/2005	Sell	32,000	0.325	C	Yes	12/29/2005	Yes	10,400.00
4/11/2005	Sell	1,500	0.330	C	Yes	12/29/2005	Yes	495.00
4/15/2005	Sell	9,000	0.320	C	Yes	12/29/2005	Yes	2,880.00
4/19/2005	Sell	6,500	0.350	C	Yes	12/29/2005	Yes	2,275.00
4/21/2005	Sell	500	0.325	C	Yes	12/29/2005	Yes	162.50
4/25/2005	Sell	24,000	0.325	C	Yes	12/29/2005	Yes	7,800.00
4/25/2005	Sell	4,000	0.330	C	Yes	12/29/2005	Yes	1,320.00
5/18/2005	Sell	500	0.300	C	Yes	12/29/2005	Yes	150.00
5/19/2005	Sell	10,000	0.300	C	Yes	12/29/2005	Yes	3,000.00
5/24/2005	Sell	10,000	0.300	C	Yes	12/29/2005	Yes	3,000.00
5/24/2005	Sell	10,000	0.315	C	Yes	12/29/2005	Yes	3,150.00
5/24/2005	Sell	10,000	0.310	C	Yes	12/29/2005	Yes	3,100.00
5/25/2005	Sell	15,000	0.320	C	Yes	12/29/2005	Yes	4,800.00
5/27/2005	Sell	20,500	0.305	C	Yes	12/29/2005	Yes	6,252.50
5/27/2005	Sell	10,000	0.295	C	Yes	12/29/2005	Yes	2,950.00
5/30/2005	Sell	19,000	0.290	C	Yes	12/29/2005	Yes	5,510.00
6/10/2005	Sell	20,000	0.280	C	Yes	12/29/2005	Yes	5,600.00
6/13/2005	Sell	5,000	0.335	C	Yes	12/29/2005	Yes	1,675.00
6/16/2005	Sell	3,000	0.280	C	Yes	12/29/2005	Yes	840.00
6/16/2005	Sell	3,500	0.270	C	Yes	12/29/2005	Yes	945.00
6/16/2005	Sell	10,000	0.275	C	Yes	12/29/2005	Yes	2,750.00
6/24/2005	Sell	11,000	0.270	C	Yes	12/29/2005	Yes	2,970.00
Total Volume 243,500						Total Value		74,830.00
		Bolder Acct BC12346C
7/4/2005	Sell	8,500	0.280	C	Yes	1/4/2006	Yes	2,380.00
7/4/2005	Sell	10,000	0.275	C	Yes	1/4/2006	Yes	2,750.00
7/4/2005	Sell	10,000	0.280	C	Yes	1/4/2006	Yes	2,800.00
7/13/2005	Sell	17,000	0.250	C	Yes	1/4/2006	Yes	4,250.00
Total Volume 45,500						Total Value		12,180.00
		Global Acct. 04306160
9/6/2005	Sell	32,000	0.270	C	Yes	1/4/2006	Yes	8,640.00
10/13/2005	Sell	20,000	0.250	C	Yes	1/4/2006	Yes	5,000.00
Total Volume 52,000						Total Value		13,640.00
		CIBC Wood Acct. 5002066123
11/10/2005	Sell	550	0.19	C	Yes	2/28/2006	Yes	103.40
Total Volume 550						Total Value		103.40
		Global Acct. 04306160
11/10/2005	Sell	11,500	0.200	C	Yes	1/4/2006	Yes	2,300.00
11/11/2005	Sell	13,000	0.180	C	Yes	1/4/2006	Yes	2,340.00
11/28/2005	Sell	10,000	0.260	C	Yes	1/4/2006	Yes	2,600.00
11/28/2005	Sell	10,000	0.250	C	Yes	1/4/2006	Yes	2,500.00
Total Volume 44,500						Total Value		9,740.00
		CIBC Wood Acct. 5650471013
12/9/2005	Sell	3,000	0.185	C	Yes	1/16/2006	Yes	555.00
12/14/2005	Sell	54,000	0.160	C	Yes	1/16/2006	Yes	8,640.00
12/14/2005	Sell	36,500	0.165	C	Yes	1/16/2006	Yes	6,022.50
12/14/2005	Sell	1,500	0.170	C	Yes	1/16/2006	Yes	255.00
12/15/2005	Sell	46,500	0.160	C	Yes	1/16/2006	Yes	7,440.00
12/15/2006	Sell	23,500	0.165	C	Yes	1/16/2006	Yes	3,877.50
12/15/2005	Sell	1,000	0.185	C	Yes	1/16/2006	Yes	185.00
Total Volume 166,000						Total Value		26,975.00
		CIBC Wood Acct. 5650471013
12/15/2005	Sell	4,000	0.185	C	Yes	2/28/2006	Yes	740.00
Total Volume 4,000						Total Value		740.00
		CIBC Wood Acct. 5650471013
12/16/2005	Sell	4,500	0.185	C	Yes	1/16/2006	Yes	832.50
12/19/2005	Sell	38,000	0.150	C	Yes	1/16/2006	Yes	5,700.00
12/19/2005	Sell	12,000	0.160	C	Yes	1/16/2006	Yes	1,920.00
12/22/2005	Sell	32,500	0.155	C	Yes	1/16/2006	Yes	5,037.50
12/22/2005	Sell	22,500	0.160	C	Yes	1/16/2006	Yes	3,600.00
12/22/2005	Sell	5,000	0.170	C	Yes	1/16/2006	Yes	850.00
12/23/2005	Sell	42,500	0.150	C	Yes	1/16/2006	Yes	6,375.00
12/23/2005	Sell	7,500	0.155	C	Yes	1/16/2006	Yes	1,162.50
Total Volume 164,500						Total Value		25,477.50
		Global Acct. 04306160
12/29/2005	Sell	10,000	0.180	C	Yes	1/16/2006	Yes	1,800.00
12/29/2005	Sell	25,000	0.170	C	Yes	1/16/2006	Yes	4,250.00
12/30/2005	Sell	14,500	0.185	C	Yes	1/16/2006	Yes	2,682.50
Total Volume 49,500						Total Value		8,732.50
		CIBC Wood Acct. 5650471013
1/3/2006	Sell	95,000	0.160	C	Yes	1/16/2006	Yes	15,200.00
1/3/2006	Sell	5,000	0.180	C	Yes	1/16/2006	Yes	900.00
Total Volume 100,000						Total Value		16,100.00