PINX:TVER Terrace Ventures Inc Quarterly Report 10-Q Filing - 7/31/2012

Effective Date 7/31/2012

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

xQuarterly Report Pursuant to Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

 

For the quarterly period ended July 31, 2012

 

¨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 000-50569

 

TERRACE VENTURES INC.

(Exact name of registrant as specified in its charter)

 

NEVADA   91-2147101
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
     
Suite 201, 810 Peace Portal Drive,    
Blaine, WA   98230
(Address of principal executive offices)   (Zip Code)
 
(360) 220-5218
(Registrant’s telephone number, including area code)
 
Not Applicable
(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 website, 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 to 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

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of September 11, 2012, the Registrant had 33,160,660 shares of common stock outstanding.

 

 
 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended July 31, 2012 are not necessarily indicative of the results that can be expected for the year ended April 30, 2013.

 

As used in this Quarterly Report, the terms “we,” “us,” “our,” “Terrace,” and the “Company” mean Terrace Ventures Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

 

2
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

BALANCE SHEET

 

   (Unaudited)   (Audited) 
   JULY 31,   April 30, 
   2012   2012 
         
ASSETS
Current Assets:          
Cash  $54,675   $69,157 
Prepaid Expense   5,377    8,519 
Total Current Assets   60,052    77,676 
Investment in Mineral Rights   20,000    22,500 
TOTAL ASSETS  $80,052   $100,176 
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
           
Current Liabilities:          
Accounts Payable and Accrued Expenses  $106,378   $84,656 
Loans Payable   7,000    7,000 
Note Payable   20,000    25,000 
Stock Subscriptions Outstanding   -0-    184,500 
           
Total Current Liabilities   133,378    301,156 
           
Stockholders' Equity:          
Common Stock, $0.001 par value 400,000,000 shares authorized, 33,160,660 and 29,470,660 shares issued, respectively   33,161    29,471 
Additional Paid in Capital   2,172,234    1,991,424 
Deficit Accumulated During the Exploration Stage   (2,258,721)   (2,221,875)
           
Total Stockholders' Equity (Deficit)   (53,326)   (200,980)
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)  $80,052   $100,176 

 

See Notes to Financial Statements.

 

3
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

 

   THREE MONTHS ENDED   INCEPTION to 
   JULY 31, 2012   JULY 31, 2011   JULY 31, 2012 
             
Revenues  $-0-   $-0-   $-0- 
                
Operating Expenses   (36,846)   (19,912)   (1,244,232)
                
Loss Before Other Income               
And Expenses   (36,846)   (19,912)   (1,244,232)
                
Other Income               
Interest Income   -0-    -0-    14,491 
                
Other Expense               
Loss on Investment   -0-    -0-    (1,028,980)
                
Loss Before Provision for               
Income Taxes   (36,846)   (19,912)   (2,258,721)
                
Provision for Income Taxes   -0-    -0-    -0- 
                
Net Loss   (36,846)   (19,912)   (2,258,721)
                
Accumulated Deficit, Beginning of Period   (2,221,875)   (2,076,253)   -0- 
                
Accumulated Deficit, End of Period  $(2,258,721)  $(2,096,165)  $(2,258,721)
                
Net Loss per Share  $(0.00)  $(0.00)  $(0.23)
                
Weighted Average Shares Outstanding   31,930,654    29,470,660    9,645,861 

 

See Notes to Financial Statements.

 

4
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

 

               Deficit     
               Accumulated     
   Common Stock   Additional   During the   Total 
       Dollar   Paid in   Exploration   Stockholders' 
   Shares   Amount   Capital   Stage   Equity (Deficit) 
                     
Inception, February 20, 2001                
                          
Common Stock Issued $0.001 per share April 9, 2001   4,000,000    400    3,600        4,000 
                          
Net Loss, Period Ended April 30, 2001               (1,410)   (1,410)
                          
Balances, April 30, 2001   4,000,000    400    3,600    (1,410)   2,590 
                          
Common Stock Issued $0.01 per share August 15, 2001   2,500,000    250    24,750        25,000 
                          
Net Loss, Period Ended April 30, 2002               (19,196)   (19,196)
                          
Balances, April 30, 2002   6,500,000    650    28,350    (20,606)   8,394 
                          
Common Stock Issued $0.10 per share September 30, 2002   142,500    14    14,236        14,250 
                          
Net Loss, Period Ended April 30, 2003               (17,632)   (17,632)
                          
Balances, April 30, 2003   6,642,500    664    42,586    (38,238)   5,012 
                          
Common Stock Issued $0.10 per share November 6, 2003   400,000    40    39,960        40,000 
                          
Net Loss, Period Ended April 30, 2004               (58,708)   (58,708)
                          
Balances, April 30, 2004   7,042,500    704    82,546    (96,946)   (13,696)
                          
Net Loss, Period Ended April 30, 2005               (37,532)   (37,532)
                          
Balances, April 30, 2005   7,042,500    704    82,546    (134,478)   (51,228)

 

See Notes to Financial Statements.

 

5
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - CONTINUED

 

               Deficit     
               Accumulated     
   Common Stock   Additional   During the   Total 
       Dollar   Paid in   Exploration   Stockholders' 
   Shares   Amount   Capital   Stage   Equity (Deficit) 
                     
Balances, April 30, 2005   7,042,500    704    82,546    (134,478)   (51,228)
                          
Common Stock Issued $1.00 per share November 23,2005   500,000    50    499,950        500,000 
                          
4-for-1 Stock Split, December 19, 2005   22,627,500    29,416    (29,416)        
                          
Common Stock Issued $0.25 per share February 3, 2006   400,000    400    99,600        100,000 
Common Stock Issued $0.25 per share March 13, 2006   380,000    380    94,620        95,000 
                          
Common Stock Issued $0.25 per share March 31, 2006   999,920    1,000    248,980        249,980 
                          
Net Loss, Period Ended April 30, 2006              (987,633)   (987,633)
                          
Balances April 30, 2006   31,949,920    31,950    996,280    (1,122,111)   (93,881)
                          
Common Stock Issued $0.25 per share May 24, 2006   220,080    220    54,800        55,020 
                          
Common Stock Issued $0.30 per share June 5, 2006   335,000    335    100,165        100,500 
                          
Common Stock Issued $0.10 per share January 23, 2007   1,678,200    1,678    166,142        167,820 
                          
Net Loss, Period Ended April 30, 2007               (301,060)   (301,060)
                          
Balances April 30, 2007   34,183,200   $34,183   $1,317,387   $(1,423,171)  $(71,601)
Common Stock Issued $0.10 per share July 12, 2007   2,570,000    2,570    254,755        257,325 
                          
Net Loss, Period Ended April 30, 2008               (100,450)   (100,450)
                          
Balances April 30, 2008   36,753,200   $36,753   $1,572,142   $(1,523,621)  $85,274 

 

See Notes to Financial Statements.

 

6
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - CONTINUED

 

               Deficit     
               Accumulated     
   Common Stock   Additional   During the   Total 
       Dollar   Paid in   Exploration   Stockholders' 
   Shares   Amount   Capital   Stage   Equity (Deficit) 
                     
Balances April 30, 2008   36,753,200   $36,753   $1,572,142   $(1,523,621)  $85,274 
                          
Common Stock Issued $0.10 per share October 10, 2008   10,000,000    10,000    190,000        200,000 
                          
Common Stock Issued $0.20 per share April 8, 2009   600,000    600    11,400        12,000 
                          
Net Loss, Period Ended April 30, 2009               (355,923)   (355,923)
                          
Balances April 30, 2009   47,353,200    47,353    1,773,542    (1,879,544)   (58,649)
                          
1-for-5 Reverse Stock Split, October 1, 2009   (37,882,540)   (37,882)   37,882         
                          
Net Loss, Period Ended April 30, 2010               (99,514)   (99,514)
                          
Balances April 30, 2010   9,470,660    9,471    1,811,424    (1,979,058)   (158,163)
                          
Common Stock Issued $0.01 per share March 24, 2011   20,000,000    20,000    180,000        200,000 
                          
Net Loss, Period Ended April 30, 2011               (97,195)   (97,195)
                          
Balances April 30, 2011   29,470,660    29,471    1,991,424    (2,076,253)   (55,358)
                          
Net Loss, Period Ended April 30, 2012               (145,622)   (145,622)
                          
Balances April 30, 2012   29,470,660    29,471    1,991,424    (2,221,875)   (200,980)
                          
Common Stock Issued $0.05 per share May 22, 2012   3,690,000    3,690    180,810        184,500 
                          
Net Loss, Period Ended July 31, 2012               (36,846)   (36,846)
                          
Balances July 31, 2012   33,160,660    33,161    2,172,234    (2,258,721)   (53,326)

 

See Notes to Financial Statements.

 

7
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CASH FLOWS

 

   THREE MONTHS ENDED   INCEPTION to 
   JULY 31, 2012   JULY 31, 2011   JULY 31, 2012 
Cash Flows from Operating Activities:               
                
Net Loss  $(36,846)  $(19,912)  $(2,258,721)
Adjustments to Reconcile Net Loss To Net Cash Provided/(Used) by Operating Activities:               
Amortization Expense   5,642    -0-    7,123 
Impairment Expense   -0-    -0-    2,500 
Prepaid expense   -0-    -0-    (10,000)
Unrealized Loss on Investment   -0-    -0-    1,028,980 
(Increase)/Decrease in:               
Increase/(Decrease) in:               
Accounts Payable   21,722    17,872    106,378 
Loan Payable   -0-    -0-    7,000 
                
Net Cash Used in               
Operating Activities   (9,482)   (2,040)   (1,116,740)
                
Cash Flows from Investing Activities:               
                
Investment in Stock   -0-    -0-    (1,028,980)
Investment in Mineral Rights   -0-    -0-    (25,000)
                
Net Cash Used in Investing Activities   -0-    -0-    (1,053,980)
                
Cash Flows from               
Financing Activities:               
                
Note Payable   (5,000)   -0-    20,000 
Loans from Shareholders   -0-    -0-    157,395 
Payments on Loans   -0-    -0-    (157,395)
Proceeds from Issuance of Common Stock   -0-    -0-    2,205,395 
                
Net Cash (Used in) Provided by Financing Activities   (5,000)   -0-    2,225,395 
                
Net Increase (Decrease) in Cash   (14,482)   (2,040)   54,675 
                
Cash at Beginning of Period   69,157    2,459    -0- 
                
Cash at End of Period  $54,675   $419   $54,675 

 

On May 31, 2012 the company issued 3,690,000 shares of stock. Stock Subscriptions Outstanding was reduced with a corresponding increase to common stock

 

See Notes to Financial Statements.

 

8
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

General

 

Terrace Ventures Inc. was incorporated on February 20, 2001 in the state of Nevada. The Company acquires and develops certain mineral rights in Canada.

 

Basis of Presentation

 

The Company reports revenue and expenses using the accrual method of accounting for financial and tax reporting purposes.

 

Use of Estimates

 

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.

 

Exploration Stage Company

 

In accordance with FASB ASC 915, the Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for using the Equity-Based Payments to Non-Employees Topic of the FASB ASC (FASB ASC Topic 718), which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. The Company determines the value of stock issued at the date of grant. It also determines at the date of grant, the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.

 

Shares issued to employees are expensed upon issuance.

 

9
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

 

Stock-Based Compensation - CONTINUED

 

The Company uses the fair value method for equity instruments granted to employees and will use the Black Scholes model for measuring the fair value of options, if issued. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

 

No stock options have been issued by Terrace Ventures, Inc.

 

Depreciation, Amortization and Capitalization

 

The Company records depreciation and amortization when appropriate using both straight-line and declining balance methods over the estimated useful life of the assets (five to seven years).

Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation, is removed from the appropriate accounts and the resultant gain or loss is included in net income.

 

Income Taxes

 

The Company accounts for its income taxes in accordance with FASB ASC 740, “Accounting for Income Taxes". Under this statement, a liability method is used whereby deferred tax assets and liabilities are determined based on temporary differences between basis used for financial reporting and income tax reporting purposes. Income taxes are provided based on tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not, that the Company will not realize the tax assets through future operations.

 

Fair Value of Financial Instruments

 

FASB ASC 825, “Financial Instruments”, requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The Company's financial instruments consist primarily of cash and certain investments.

 

10
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

 

Investments

 

Investments that are purchased in other companies are valued at cost less any impairment in the value that is other than temporary in nature.

 

Per Share Information

 

The Company follows FASB ASC 260 “Earnings Per Share” which establishes standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as convertible notes, stock options, and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

 

NOTE 2 – PREPAID EXPENSE

 

Prepaid expense at July 31, 2012 consists of the remainder of the unamortized amount of the original $10,000 paid to renegotiate the Pengram notes. These prepaid fees are fully amortized at December 31, 2012.

 

NOTE 3 – INVESTMENT IN MINERAL RIGHTS

 

On April 26, 2011, we entered into an agreement with Pengram Corporation (“Pengram”) dated April 26, 2011, as amended on June 29, 2011, (the “Earn-In Agreement”). Under the terms of the Earn-In Agreement, the Company will earn up to a 75% interest in Pengram’s agreement with Scoonover Exploration LLC and JR Exploration LLC (the “Underlying Agreement”) to acquire the Golden Snow Property, by paying to Pengram up to $175,000 in a promissory note and direct payments, and expending up to $1,750,000 in exploration work. The Golden Snow project consists of 111 mineral claims located in the Eureka Mining District in Eureka County, Nevada.

 

NOTE 4 – LOANS PAYABLE

 

Loans payable consist of short term monies advanced. These loans are unsecured; bear no interest rate and no specified maturity date.

 

11
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 5 – NOTE PAYABLE

 

Note payable consists of short term monies due to Pengram Corporation. The company has agreed to pay Pengram Corporation by way of a series of promissory notes (see Note 3), bearing no interest, payable per schedule detailed in Note 7.

 

NOTE 6 - PROVISION FOR INCOME TAXES

 

The provision for income taxes for the periods ended July 31, 2012 and July 31, 2011 represents the minimum state income tax expense of the Company, which is not considered significant.

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Pengram Corporation Agreement – Golden Snow Project

 

The Company is obligated to Pengram Corporation for up to $175,000 in a promissory note and direct payments, and $1,750,000 in exploration expenses as follows:

 

(i)The first 25% interest in the Underlying Agreement upon the Company:
a.Paying Pengram $25,000 by way of a promissory note, bearing interest at a rate of 10% per annum, due on September 27, 2011;
b.Completing exploration expenditures on the Property totaling $250,000 by December 31, 2012.
(ii)An additional 25% interest in the Underlying Agreement upon the Company:
a.Paying Pengram $50,000 on or before May 31, 2013;
b.Completing cumulative exploration expenditures on the Property totaling $500,000 by December 31, 2013:

(iii) An additional 25% interest in the Underlying Agreement upon the Company:

c.Paying Pengram $100,000 on or before May 31, 2014;
d.Completing cumulative exploration expenditures on the Property totaling $1,000,000 by December 31, 2014.

 

12
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES - CONTINUED

 

Pengram Corporation Agreement – Golden Snow Project - Continued

 

The Company is also obligated to pay all advance royalties, county and BLM claim fees and Nevada state taxes during the currency of the Earn-In Agreement.

 

On December 31, 2011, Pengram, in consideration of $5,000 (which has been paid), agreed to accept, in substitution for the $25,000 promissory note set out above, a series of non-interest bearing promissory notes totaling $30,000 payable on the following dates:

 

March 31, 2012  $5,000 
June 30, 2012   5,000 
September 30, 2012   10,000 
December 31, 2012   10,000 
TOTAL   30,000 
Less: Amount Paid   (10,000)
Note Payable,     
Balance at July 31, 2012  $20,000 

 

Operating Leases

 

The Company currently rents administrative office space under a monthly renewable contract.

 

Litigation

 

The Company is not presently involved in any litigation.

 

NOTE 8 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

Recently issued accounting pronouncements will have no significant impact on the Company and its reporting methods.

 

NOTE 9 – GOING CONCERN

 

Future issuances of the Company’s equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company’s present revenues are insufficient to meet operating expenses.

 

13
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 9 – GOING CONCERN - Continued

 

The financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of $2,258,721 since its inception and requires capital for its contemplated operational and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 10 – REVERSE STOCK SPLIT

 

On September 2, 2009, the Board of Directors approved a one-for-five reverse split of the Company’s common stock. Upon the completion of the reverse stock split, which was effective on October 1, 2009, the Company’s authorized shares of common stock was decreased from 400,000,000 shares, par value $0.001 per share, to 80,000,000 shares, par value $0.001 per share. Issued and outstanding common stock was reduced from 47,353,200 shares to approximately 9,470,660 shares. Weighted Average Shares Outstanding and Net Loss per Share have been restated on the Statements of Operations and Accumulated Deficit for the effect of the reverse stock split.

 

NOTE 11 – STOCK ISSUANCES

 

On June 8, 2010 our Board of Directors terminated the convertible notes offering approved on March 16, 2010 and approved two private placement offerings for up to an aggregate of 10,000,000 Units for proceeds of up to $100,000 as follows:

 

14
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 11 – STOCK ISSUANCES - CONTINUED

Foreign Private Placement

 

On June 8, 2010, our Board of Directors approved a private placement offering of up to 5,000,000 Units at a price of $0.01 US per unit, with each Unit consisting of one share of our common stock and one share purchase warrant (the Foreign Private Placement”). Each share purchase warrant entitled the holder to purchase an additional share of common stock exercisable for a period of two years at a price of $0.01 US per share. The private placement offering was made to persons who are not “U.S. Persons” as defined in Regulation S. Subsequent to the offering, the corporation received subscriptions for an aggregate of 14,700,000 shares and payment in full of the subscription proceeds. In order to allow for the oversubscriptions to the Foreign Offering, on March 24, 2011, the Corporation increased the number of Shares being issued under the Offering to 14,700,000 Shares. Upon the issuance of the Shares, the Corporation terminated this Foreign Offering.

 

U.S. Private Placement

 

Also, on June 8, 2010, our Board of Directors approved a private placement offering of up to 5,000,000 Units at a price of $0.01 US per Unit, with each Unit consisting of one share of our common stock and one share purchase warrant (the “U.S. Private Placement”). Each share purchase warrant entitled the holder to purchase an additional share of common stock exercisable for a period of two years at a price of $.01 US per share. The private placement offering was made to persons who are “Accredited Investors” as defined in Regulation D. Subsequent to the offering, the corporation received subscriptions for an aggregate of 5,300,000 shares and payment in full of the subscription proceeds. In order to allow for the oversubscriptions to the US Offering, on March 24, 2011, the Corporation increased the number of Shares being issued under the Offering to 5,300,000 Shares. Upon the issuance of the Shares, the Corporation terminated this US Offering.

 

On April 26, 2011 our Board of Directors approved two concurrent private placements as follows:

 

Foreign Private Placement

 

On April 26, 2011, our Board of Directors approved a private placement offering of up to 2,500,000 shares of our common stock at a price of $0.10 US per share to persons who are not “US Persons” as defined in Regulation S if the Securities Act of 1933.

 

15
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

NOTE 11 – STOCK ISSUANCES - CONTINUED

 

U.S. Private Placement

 

Also, on April 26, 2011, our Board of Directors approved a private placement offering of up to 2,500,000 shares of our common stock at a price of $0.10 US per share. The offering was made in the United States to persons who are accredited investors as defined in Regulation D of the Securities Act of 1933.

 

On May 22, 2012, the Company issued 3,690,000 shares of common stock at a price of $0.05 per share.

 

NOTE 12 – SUBSEQUENT EVENTS

 

As of September 10, 2012, all stock had been issued in accordance with the stock subscription agreements in effect at July 31, 2012.

 

16
 

 

SUPPLEMENTAL STATEMENT

 

17
 

 

TERRACE VENTURES INC.

(AN EXPLORATION STAGE COMPANY)

STATEMENT OF OPERATING EXPENSES

 

   THREE MONTHS ENDED   INCEPTION to 
   JULY 31, 2012   JULY 31, 2011   JULY 31, 2012 
Operating Expenses:               
Accounting  $8,100   $4,840   $189,600 
Amortization Expense   5,642    -0-    7,123 
Bad Debt Expense   -0-    -0-    214,892 
Bank Charges   -0-    30    1,420 
Cancelled Merger Costs   -0-    -0-    8,300 
Consulting   -0-    -0-    121,150 
Exploration Expense   -0-    -0-    28,116 
Foreign Exchange Loss   -0-    -0-    905 
Impairment Expense   -0-    -0-    2,500 
Interest Expense   -0-    664    2,656 
Legal   11,890    6,090    332,121 
Office Administration   7,743    7,500    212,343 
Office Expenses   -0-    -0-    4,271 
Property Maintenance   -0-    -0-    29,572 
Regulatory Expenses/Fees   2,581    188    48,016 
Rent   375    375    28,200 
Telephone   515    225    8,146 
Travel & Entertainment   -0-    -0-    4,901 
                
Total Operating Expenses  $36,846   $19,912   $1,244,232 

 

See Notes to Financial Statements.

 

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ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II – Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and Current Reports, that we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

 

OVERVIEW

 

We were incorporated on February 20, 2001 under the laws of the State of Nevada.

 

Our business plan is to assemble a portfolio of mineral properties with gold potential and to engage in the exploration and development of these properties. We currently have an earn-in agreement to acquire 75% interest in Pengram Corporation's agreement with Scoonover Exploration LLC and JR Exploration LLC (the “Underlying Agreement”) to acquire the Golden Snow Property (as described below).

 

Golden Snow Project

 

Earn-in Agreement

 

On April 26, 2011, we entered into an agreement with Pengram Corporation ("Pengram") as amended on June 29, 2011 and July 31, 2012 (the "Earn-In Agreement") whereby we will earn up to a 75% interest in Pengram's agreement with Scoonover Exploration LLC and JR Exploration LLC (the “Underlying Agreement”) to acquire the Golden Snow Property by issuing a promissory note to Pengram of $25,000, paying to Pengram up to $150,000 and expending up to $1,750,000 of exploration work on the Golden Snow Property. Under the terms of the Earn-In Agreement, we will exercise our interest in the Underlying Agreement as follows:

 

(i)The first 25% interest in the Underlying Agreement upon us:

 

a.issuing Pengram a $25,000 promissory note, bearing interest at a rate of 10% per annum, due on September 27, 2011 (which was issued); and

 

b.completing cumulative exploration expenditures on the Golden Snow Property totalling $250,000 by December 31, 2012.

 

(ii)An additional 25% interest in the Underlying Agreement upon us:

 

a.paying Pengram $50,000 on or before May 31, 2013; and

 

b.completing cumulative exploration expenditures on the Golden Snow Property totalling $500,000 by December 31, 2013;

 

(iii)An additional 25% interest in the Underlying Agreement upon us:

 

a.paying Pengram $100,000 on or before May 31, 2014; and

 

b.completing cumulative exploration expenditures on the Golden Snow Property totalling $1,000,000 by December 31, 2014.

 

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We are also obligated to pay all advance royalties, county and BLM claim fees and Nevada state taxes during the currency of the Earn-In Agreement. There is no assurance that we be able to perform our obligations under the Earn-In Agreement.

 

On December 31, 2011, Pengram, in consideration of $5,000 (which has been paid), agreed to accept, in substitution for the $25,000 promissory note set out above, a series of non-interest bearing promissory notes totaling $30,000 payable on the following dates:

 

Payment Due Date  Amount 
     
March 31, 2012  $5,000.00 
June 30, 2012   5,000.00 
September 30, 2012   10,000.00 
December 31, 2012   10,000.00 
Total  $30,000.00 

 

PLAN OF OPERATION

 

Over the next twelve months, our plan of operation is to focus our resources on the exploration of the Gold Snow Property. Subject to obtaining sufficient financing, we plan to conduct a drill program on the Golden Snow Property. The proposed drill program would cost approximately $175,000, summarized as follows:

 

Exploration Program Costs   Estimate     Rate ($)     Cost ($)
                 
Geology-Senior     10     $ 650.00         $ 6,500
Geology-Junior     10     $ 350.00         $ 4,000
Travel and Related Expenses (includes mileage)                       $ 2,700
                           
                    Subtotal   $ 13,200
                           
Drilling                       $ 115,472
Drill Sample Assaying                       $ 27,030
Drill Supervision (Senior)     2     $ 650         $ 1,300
Drill Geologist     13     $ 400         $ 5,200
Review of Results                       $ 0
Travel and Related Expenses (includes mileage)                       $ 2,700
Drill Site Preparation and Reclamation                       $ 10,200
                    Subtotal   $ 161,902
                           
                    Total   $ 175,102

 

During the next twelve months, we must complete the following in order to maintain our interest under the Earn-In Agreement and keep the Golden Snow Property in good standing:

 

(a)complete cumulative exploration expenditures on the Golden Snow Property totaling $250,000 by December 31, 2012; and

 

(b)pay the Bureau of Land Management maintenance and claim fees of approximately $17,165 by September 1, 2012.

 

As the agreement is an option, we may decide at any time not to proceed in which case we would not be liable to pay any funds beyond the amounts due at the time we provide notice that we are not proceeding. There is no assurance that we will exercise the option.

 

20
 

 

As at July 31, 2012, we had $54,675 cash on hand. Accordingly, we have insufficient cash on hand to satisfy the exploration expenditure requirements under the Earn-In Agreement and meet our ongoing operating costs. As such, we will require substantial financing in order to meet our obligations. There is no assurance that we will be able to acquire such financing on terms that are acceptable to us, or at all.

 

RESULTS OF OPERATIONS

 

Three Months Summary

 

   Three Months Ended   Percentage 
   July 31, 2012   July 31, 2011   Increase / (Decrease) 
Revenue  $-   $-    n/a 
Operating Expenses   (36,846)   (19,912)   85.0%
Net Loss  $(36,846)  $(19,912)   85.0%

 

Revenues

 

We have not earned any revenues since our inception and we do not anticipate earning revenues in the near future. We are an exploration stage company and are presently seeking and evaluating alternative business opportunities.

 

Expenses

 

The major components of our expenses for the three months ended July 31, 2012 and 2011 are outlined in the table below:

 

   Three Months Ended July 31   Percentage 
   2012   2011   Increase / (Decrease) 
Accounting  $8,100   $4,840    67.4%
Amortization   5,642    -    100.0%
Bank Charges   -    30    (100.0)%
Interest Expense   -    664    (100.0)%
Legal   11,890    6,090    95.2%
Office Administration   7,743    7,500    3.2%
Regulatory Expenses/Fees   2,581    188    1272.9%
Rent   375    375    0.0%
Telephone   515    225    128.9%
Total Operating Expenses  $36,846   $19,912    85.0%

 

Our operating expenses increased from $19,912, during the three months ended July 31, 2011, to $36,846, during the three months ended July 31, 2012. The increase in our operating expenses is due to increases in accounting, amortization, legal, office administration, regulatory expenses and telephone. The increase was partially offset by decreases in bank charges and interest expense.

 

Accounting and legal expenses primarily relate to expenses incurred in connection with meeting our ongoing reporting obligations under the Exchange Act.

 

Amortization, exploration, impairment and property maintenance expenses primarily relate to expenses incurred in connection with the Earn-In Agreement with Pengram.

 

Office administration expenses consist of amounts incurred to our sole executive officer and director for his management consulting services.

 

21
 

 

LIQUIDITY AND CAPITAL RESOURCES

 

Working Capital

   At July 31, 2012   At April 30, 2012   Percentage
Increase / (Decrease)
 
Current Assets  $60,052   $77,676    (22.7)%
Current Liabilities   (133,378)   (301,156)   (55.7)%
Working Capital Deficit  $(73,326)  $(223,480)   (67.2)%

 

Cash Flows

   Three Months Ended 
   July 31, 2012   July 31, 2011 
Net Cash Used by Operating Activities  $(9,482)  $(2,040)
Net Cash From Investing Activities   -    - 
Net Cash Provided By Financing Activities   (5,000)   - 
Net Decrease in Cash During Period  $(14,482)  $(2,040)

 

We had cash on hand of $54,675 and a working capital deficit of $73,326 as of July 31, 2012 compared to a working capital deficit of $223,480 as of April 30, 2012. The decrease in our working capital deficit is due to a decrease in stock subscriptions outstanding and notes payable. The decrease was partially offset by a decrease in cash and prepaid expenses and an increase in accounts payable and accrued expenses.

 

Financing Requirements

 

Currently, we do not have sufficient financial resources to meet our ongoing operating expenditures. As such, our ability to complete our plan of operation is dependent upon our ability to obtain additional financing in the near term.

 

On May 22, 2012, we issued 3,290,000 shares of our common stock at a price of $0.05 per share for proceeds of $164,500 pursuant to Regulation S of the Securities Act. Each subscriber represented that they were not a “U.S. Person” as that term is defined in Regulation S of the Act.

 

On May 22, 2012, we issued 400,000 shares of our common stock a price of $0.05 per share for proceeds of $20,000 pursuant to Regulation D of the Securities Act. The subscriber represented that it was an “accredited investor” as defined in Regulation D of the Securities Act.

 

The proceeds of the private placement offerings will be used to retire corporate indebtedness, complete work on our mineral properties and for general corporate purposes.

 

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our business operations.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

CRITICAL ACCOUNTING POLICIES

 

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure 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 estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

 

22
 

 

Our significant accounting policies are disclosed in Note 1 to the interim financial statements included in this Quarterly Report.

 

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not Applicable.

 

ITEM 4.CONTROLS AND PROCEDURES.

 

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of July 31, 2012 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed in our Annual Report on Form 10-K for the year ended April 30, 2012 (the “2012 Annual Report”).

 

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in our 2012 Annual Report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended July 31, 2012 fairly present our financial condition, results of operations and cash flows in all material respects.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the quarter ended July 31, 2012 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

23
 

 

PART II - OTHER INFORMATION

 

Item 1.Legal Proceedings.

 

We are not a party to any other legal proceedings and, to our knowledge, no other legal proceedings are pending, threatened or contemplated.

 

ITEM 1A.RISK FACTORS.

 

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

 

If we do not obtain additional financing, our business will fail.

 

As of July 31, 2012, we had $54,675 cash on hand and a working capital deficit of $73,326. Our plan of operation calls for significant expenses in order to meet our obligations under the Earn-In Agreement. There is no guarantee that we will exercise our option.

 

We do not have other financing arrangements in place. We will require additional financing to meet out our obligations under the Earn-in Agreement. Obtaining financing would be subject to a number of factors outside of our control, including market conditions and additional costs and expenses that might exceed current estimates. These factors may make the timing, amount, terms or conditions of financing unavailable to us in which case we will be unable to complete our plan of operation on our mineral property and to meet our obligations under our Earn-In Agreement

 

We have yet to earn revenue and our ability to sustain our operations is dependent on our ability to raise financing. As a result, our accountants believe there is substantial doubt about our ability to continue as a going concern.

 

We have a cumulative net loss of $2,258,721 for the period from our inception to July 31, 2012, and have no revenues to date. Our future is dependent upon our ability to obtain financing. Our auditors have expressed substantial doubt about our ability to continue as a going concern given our accumulated losses. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital, we will not be able to complete our business plan. As a result, we may have to liquidate our business and investors may lose their investment.

 

Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.

 

Investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.

 

We have no known mineral reserves and if we cannot find any, we will have to cease operations.

 

We have no mineral reserves. If we do not find a mineral reserve containing gold or if we cannot explore the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we will have to cease operations and you will lose your investment. Mineral exploration, particularly for gold, is highly speculative. It involves many risks and is often non-productive. Even if we are able to find mineral reserves on our properties, our production capability is subject to further risks including:

 

24
 

 

-Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;
-Availability and costs of financing;
-Ongoing costs of production; and
-Environmental compliance regulations and restraints.

 

The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near our mineral properties, and such other factors as government regulations, including regulations relating to allowable production, importing and exporting of minerals, and environmental protection.

 

Given the above noted risks, the chances of finding reserves on our mineral properties are remote and funds expended on exploration will likely be lost.

 

Even if we discover proven reserves of precious metals on our mineral properties, we may not be able to successfully commence commercial production.

 

Our mineral properties do not contain any known bodies of ore. If our exploration programs are successful in discovering proven reserves on our mineral properties, we will require additional funds in order to place the mineral properties into commercial production. The expenditures to be made by us in the exploration of mineral properties in all probability will be lost as it is an extremely remote possibility that the mineral claims will contain proven reserves. If our exploration programs are successful in discovering proven reserves, we will require additional funds in order to place the mineral properties into commercial production. The funds required for commercial mineral production can range from several millions to hundreds of millions. We currently do not have sufficient funds to place our mineral claims into commercial production. Obtaining additional financing would be subject to a number of factors, including the market price for gold and the costs of exploring for or mining these materials. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. Because we will need additional financing to fund our exploration activities there is substantial doubt about our ability to continue as a going concern. At this time, there is a risk that we will not be able to obtain such financing as and when needed.

 

We face significant competition in the mineral exploration industry.

 

We compete with other mining and exploration companies possessing greater financial resources and technical facilities than we do in connection with the acquisition of mineral exploration claims and leases on precious metal prospects and in connection with the recruitment and retention of qualified personnel. There is significant competition for precious metals and, as a result, we may be unable to acquire an interest in attractive mineral exploration properties on terms we consider acceptable on a continuing basis.

 

There is no assurance that we will be able to comply with our obligations under the Earn-In Agreement.

 

In order comply with our obligations under the Earn-In Agreement we are required to make a series of cash payments and meet the annual claim maintenance fees. In order to meet these payments we will need to obtain substantial financing. If we are unable to meet these payments, we will lose our options to acquire these properties.

 

Because our sole director and executive officer does not have formal training specific to the technicalities of mineral exploration, there is a higher risk that our business will fail.

 

Howard Thomson, our sole director and executive officer, does not have any formal training as a geologist or in the technical aspects of managing a mineral exploration company. Mr. Thomson’s lack of expertise could cause irreparable harm to our operations, earnings, and ultimate financial success could suffer irreparable harm due to management's lack of experience in this industry.

 

25
 

 

Because the prices of metals fluctuate, if the price of metals for which we are exploring decreases below a specified level, it may no longer be profitable to explore for those metals and we will cease operations.

 

Prices of metals are determined by such factors as expectations for inflation, the strength of the United States dollar, global and regional supply and demand, and political and economic conditions and production costs in metals producing regions of the world. The aggregate effect of these factors on metal prices is impossible for us to predict. In addition, the prices of precious metals are sometimes subject to rapid short-term and/or prolonged changes because of speculative activities. The current demand for and supply of these metals affect the metal prices, but not necessarily in the same manner as current supply and demand affect the prices of other commodities. The supply of these metals primarily consists of new production from mining. If the prices of the metals are, for a substantial period, below our foreseeable cost of production, we could cease operations and investors could lose their entire investment.

 

We may conduct further offerings in the future in which case investors’ shareholdings will be diluted.

 

Since our inception, we have relied on such equity sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, the interests of existing shareholders will be diluted.

 

The quotation price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor.

 

Our common shares are quoted on the OTCBB under the symbol "TVER”. Companies quoted on the OTCBB have traditionally experienced extreme price and volume fluctuations. In addition, our stock price may be adversely affected by factors that are unrelated or disproportionate to our operating performance. Market fluctuations, as well as general economic, political and market conditions such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. As a result of this potential volatility and potential lack of a trading market, an investor may not be able to sell any of our common stock that they acquire at a price equal or greater than the price paid by the investor.

 

Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock.

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

 

1.contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

 

2.contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

 

3.contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

 

4.contains a toll-free telephone number for inquiries on disciplinary actions;

 

5.defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

 

26
 

 

6.contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

 

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

 

None.

 

Item 3.Defaults upon Senior Securities.

 

None.

 

Item 4.MINE SAFETY DISCLOSURES.

 

None.

 

Item 5.Other Information.

 

None.

 

ITEM 6.EXHIBITS.

 

Exhibit
Number
  Description of Exhibit
     
3.1   Articles of Incorporation.(1)
3.2   Certificate of Change to Authorized Capital effective December 19, 2005.(2)
    Certificate of Change Pursuant to NRS 78.209 decreasing the authorized capital of common stock to 80,000,000 shares, par value $0.001 per share.(9)
3.3   Bylaws.(1)
10.1   2006 Stock Incentive Plan.(4)
10.2   Stock Option Agreement between the Company and Howard Thomson dated March 31, 2006.(4)
10.3   Management Consulting Agreement dated March 21, 2006 between the Company and Howard Thomson.(4)
10.4   Interim Agreement dated July 9, 2008 between the Company and Pyro Pharmaceuticals, Inc.(5)
10.5   Amendment Agreement dated September 26, 2008 to the Interim Agreement dated July 9, 2008 between the Company and Pyro Pharmaceuticals, Inc.(6)
10.6   Share Purchase Agreement dated April 29, 2009 among Terrace Ventures Inc., Marktech Acquisition Corp., Worldbid International Inc. and Geobiz Systems Inc.(7)

 

27
 

 

Exhibit
Number
  Description of Exhibit
10.7   Amendment Agreement to Share Purchase Agreement dated August 12, 2009 among Terrace Ventures Inc., Marktech Acquisition Corp., Worldbid International Inc. and Geobiz Systems Inc.(8)
10.8   Earn-In Agreement (Golden Snow) dated April 26, 2011 between Pengram Corporation and Terrace Ventures Inc.(10)
10.9   Earn-In Extension Agreement (Golden Snow) dated June 29, 2011 between Pengram Corporation and Terrace Ventures Inc.(11)
10.10   Amendment Agreement dated July 31, 2012 between Pengram Corporation and Terrace Ventures Inc.(12)
14.1   Code of Ethics.(3)
31.1   Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification of Chief Executive Officer and Chief Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Notes:

(1)Filed with the SEC as an exhibit to our Registration Statement on Form 10-SB originally filed on February 2, 2004.
(2)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 27, 2005.
(3)Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on September 8, 2004.
(4)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on March 22, 2006.
(5)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 15, 2008.
(6)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 2, 2008.
(7)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on April 29, 2009.
(8)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on August 13, 2009.
(9)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 2, 2009.
(10)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on April 28, 2011.
(11)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on August 15, 2011.
(11)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on August 15, 2012.

 

28
 

 

SIGNATURES

 

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

 

        TERRACE VENTURES INC.
         
Date: September 14, 2012   By: /s/ Howard Thomson
        HOWARD THOMSON
        Chief Executive Officer, Chief Financial Officer,
        President, Secretary and Treasurer
        (Principal Executive Officer & Principal Accounting Officer)

 

29

 

PINX:TVER Terrace Ventures Inc Quarterly Report 10-Q Filling

Terrace Ventures Inc PINX:TVER Stock - Get Quarterly Report SEC Filing of Terrace Ventures Inc PINX:TVER stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

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PINX:TVER Terrace Ventures Inc Quarterly Report 10-Q Filing - 7/31/2012
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