8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

July 10, 2006
Date of Report (Date of earliest event reported)

TERRACE VENTURES INC.
(Exact name of registrant as specified in its charter)

NEVADA	000-50569	91-2147101
(State or other jurisdiction of	(Commission File	(IRS Employer Identification No.)
incorporation)	Number)

810 Peace Portal Drive, Suite 202,
Blaine, WA	98230
(Address of principal executive offices)	(Zip Code)

(360) 220-5218
Registrant's telephone number, including area code

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

____ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

____ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

____ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

____ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

SECTION 7 – REGULATION FD

ITEM 7.01 REGULATION FD DISCLOSURE.

Terrace Ventures Inc. (the “Company”) announced on July 10, 2006 that its merger agreement entered into with Sporg Corporation on May 26, 2006 has expired and has not been extended by the parties. Accordingly, the merger will not take place on the basis contemplated in the agreement. The Company is continuing to review the possibility of completing the merger on some other basis, but there is no assurance that the Company will be able to reach a satisfactory agreement for the merger.

A copy of the press release announcing the above is attached as an exhibit to this Current Report.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 Financial Statements And Exhibits

(c)	Exhibits
	99.1	Press Release dated July 10, 2006.

SIGNATURE

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 hereunto duly authorized.

		TERRACE VENTURES INC.
Date:	July 12, 2006
		By:	/s/ Howard Thomson
			HOWARD THOMSON
			President and Chief Executive Officer

2

EX-99.1

TERRACE VENTURES INC.

801 Peace Portal Drive, Suite 202

Blaine, WA 98230

(360) 220-5218

July 10, 2006

FOR IMMEDIATE DISSEMINATION

Blaine, Washington – (OTCBB: TVEN) Terrace Ventures Inc. (the “Company”) announced today that its merger agreement entered into with Sporg Corporation on May 26, 2006 has expired and has not been extended by the parties. Accordingly, the merger will not take place on the basis contemplated in the agreement. The Company is continuing to review the possibility of completing the merger on some other basis, but there is no assurance that the Company will be able to reach a satisfactory agreement for the merger.

This Press Release may contain, in addition to historical information, forward-looking statements. These forward looking statements are based on management's expectations and beliefs, and may involve known and unknown risks and uncertainties and other factors that may cause the actual results to be materially different from the results implied herein. In particular there is no assurance that any Merger will be completed.

Readers are cautioned not to place undue reliance on the forward-looking statements made in this Press Release.

TERRACE VENTURES INC.

/s/ Howard Thomson                                  
HOWARD THOMSON
Chief Executive Officer and President