Golden Star Enterprises Ltd. - Annual Report: 2011 (Form 10-K)

Name and Address

Date of Appointment

Jaclyn Cruz

President & Director & CEO

November 18, 2008

Matt Kelly

Secretary, Treasurer & Director & CFO

February 1, 2012

gldc_10k.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011

o 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 0-14278

TERRALENE FUELS CORPORATION

DELAWARE		52-2132622
(STATE OF INCORPORATION)		(I.R.S. ID)

35 South Ocean Avenue, Patchogue, New York, 11772

1-888-488-6882

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK OTC: BB

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.0001

(Title of Class)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common stock, $.0001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. o Yes x No

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. o Yes x No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes x No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a smaller reporting company.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

As of March 30, 2012, there were 72,198,691 shares of the issuer's $0.0001 par value common stock issued and outstanding.

Documents incorporated by reference: None

Terralene Fuels Corporation

FORM 10-K

For The Fiscal Year Ended December 31, 2011

INDEX

PART I		3

ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	7
ITEM 1B.	UNRESOLVEDCOMMENTS	7
ITEM 2.	PROPERTIES	8
ITEM 3.	LEGAL PROCEEDINGS	8
ITEM 4.	MINE SAFETY DISCLOSURES	8

PART II		9

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	9
ITEM 6.	SELECTED FINANCIAL DATA	12
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	14
ITEM 9A.	CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES	14
ITEM 9B.	OTHER INFORMATION	15

PART III		16

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	16
ITEM 11.	EXECUTIVE COMPENSATION	17
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	18
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	18
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	19

PART IV		20

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	20

SIGNATURES		21

Note About Forward-Looking Statements

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” (refer to Part I, Item 1A). We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I

ITEM 1. BUSINESS

GENERAL

Terralene Fuels Corporation, formerly Golden Spirit Enterprises Ltd., formerly Golden Spirit Gaming Ltd., formerly Golden Spirit Mining Ltd., formerly Golden Spirit Minerals Ltd., formerly 2UOnline.com, Inc., formerly Power Direct, Inc., was incorporated in the State of Delaware on September 13, 1993, and we maintain our principal executive offices at 1288 Alberni Street, Suite 806, Vancouver, British Columbia, Canada V6E 4N5. Our offices in the United States are located at 177 Telegraph Road, Suite 541, Bellingham, Washington 98226.

We changed our name from Power Direct, Inc., to 2UOnline.com, Inc. by filing a Certificate of Amendment to our Certificate of Incorporation on January 31, 2000. We also changed our trading symbol from "PWDR" to "TWOU" in order to reflect our decision to shift our focus from oil and gas production to Internet- related activities. Our symbol was then changed to "TWOUE". On or about April 18, 2000, we were removed from the Over-the-Counter Bulletin Board ("OTCBB") for failure to comply with NASD Rule 6530, which requires any company listed on the OTCBB to be current in its public reporting obligations pursuant to the Securities and Exchange Act of 1934. The Company was re-instated on the OTCBB on October 7, 2002 under the symbol "TWOU". The Company filed a certificate of amendment to its Articles of Incorporation with the State of Delaware on October 1, 2003 to change its name to Golden Spirit Minerals Ltd. The name change reflects management's decision to shift the Company's focus from internet-based business development to mineral exploration. On October 8, 2003, the trading symbol for the Company became "GSPM". On October 19, 2004, the Company changed its name to Golden Spirit Mining Ltd. and the trading symbol was "GSML". On July 18, 2005 the Company changed its name to Golden Spirit Gaming Ltd. and the trading symbol was “GSGL”. On June 30, 2006, the Company changed it’s name to Golden Spirit Enterprises Ltd. and the trading symbol is currently “GSPT”. On November 29, 2011, the Company changed its name to Terralene Fuels Corporation and the trading symbol remains as “GSPT.

On August 17, 2005, the Company incorporated Golden Spirit Poker Company Limited, a British Virgin Islands Corporation. Golden Spirit Gaming Ltd. was issued 10 shares of this Company for consideration of $10.00, representing 100% of the issued capital of Golden Spirit Poker Company Limited.

We were originally incorporated to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. We were inactive from September 13, 1993, through November 1998, when we began the process of identifying potential business interests, including, but not necessarily limited to, interests in oil and natural gas producing properties. The Company will be involved in the development, production, financing and packaging of innovative film and television programming. In addition, the Company has signed an agreement with Eneco Industries to participate in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants.

OUR BUSINESS

Our initial focus was on the development of oil and natural gas properties. In this regard, we purchased interests in two properties; one in the United States and one in Canada. In or around December 1999, we decided to review the focus of our business, primarily the direction we would take with our various oil and gas projects. We decided that maintaining interests in oil and gas producing properties should no longer be our focus. Due to the growth of the Internet, we decided to pursue Internet-related activities. We determined that Internet-related activities would provide a positive revenue stream sooner than oil and gas producing activities. Due to the lack of success with our internet activities we decided to abandon this business and commencing in 2003 instead pursue opportunities in mineral exploration and development

We had limited success with both our internet activities and our mineral exploration and development activities. In mid 2005, management of the Company decided to focus on online gaming and in June 2006. On June 30, 2006, the Company changed its name and focus from gaming to reflect the Company’s plan to expand its operations to include the marketing of other products and venues. The Company was involved in the development, production, financing and packaging of innovative film and television programming. During 2011, we opted out of this business totally. On September 30, 2006, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006. The new proposed legislation prohibits banks, credit card companies, money transmitting businesses, and other third-party payment providers from knowingly processing online gaming transactions. Due to this ruling and the negative impact it would have on the Golden Spirit poker website, management decided to discontinue its online gaming operations in 2006.

The Company has engaged in the development, production, financing and packaging of innovative film and television programming. It continues to look for financing for its films in progress and distribution channels for its acquired films. In addition, the Company has signed an agreement with Eneco Industries to participate in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants. The Agreement calls for a joint venture utilizing EnEco's expertise and technology to develop a municipal solid waste (garbage) recycling and biomass derived renewable energy facility. Golden Spirit and EnEco will build and operate a series of solid waste recycling and biomass derived renewable energy facility with greenhouse and algae subsystems that will utilize our Thermal Oxidation Process System (TOPS) technology to generate electricity for sale to the local power grid. Further details on the new Terralene Fuels - Eneco project can be viewed on our website www.goldenspirit.ws.

In 2010, the Company signed an agreement with Global Terralene Inc .for the acquisition of all assets pertaining to Terralene Fuels. Terralene Fuel is a patented fuel alternative formulation that is the equivalent of 87 octane regular gasoline and utilizes renewable energy sources in 45% of its composition. Terralene’s unique fuel reduces greenhouse gas and other environmental damaging emissions and can be easily integrated into the existing fuel infrastructure. Further details on the new Terralene Fuels project can be viewed on our website www.terralenefuels.com.

Our Investment in Available for sale securities – related parties

Organa

The Company owns common shares of Organa Gardens International Inc. (formerly Shotgun Energy Corporation) (“Organa”), a public company with directors and significant shareholders in common that does not represent a position of control of or significant influence over Organa. During 2007 the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $3,775, which was recorded as other comprehensive income (loss). During the year ended December 31, 2008, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $5,612 which was recorded as other comprehensive income (loss). During the year ended December 31, 2009, the Company sold 50,000 shares resulting in a realized loss of $(780) and recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $5,138, which was recorded as other comprehensive income. During the year ended December 31, 2010, the Company received 700,300 restricted shares of Organa valued to $7,003 pursuant to a debt settlement and sold Nil Organa shares. The Company recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $2,541, which was recorded as other comprehensive income (loss). As a result, the carrying value of the available for sale shares of Organa is $4,504 as at December 31, 2010.

During the year ended December 31, 2011, the Company sold Nil Organa shares and recorded an additional unrealized loss of $ (3,097). As a result, the carrying value of the available for sale shares of Organa is $1,407 as at December 31, 2011. Effective December 31, 2011, the Company recorded a $1,689 write-down of its investment in Organa due to an other-than-temporary decline in the value of the shares.

Legacy

The Company owns common shares of Legacy Wine & Spirits International Ltd. (“Legacy”), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Legacy. During 2007 the Company recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $590,993. During the year ended December 31, 2008, the Company acquired 23,200 shares valued at $19,532 sold 99,400 shares resulting in a realized gain of $28,645(net of commissions of $2,132) and recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $275,121, which was recorded as other comprehensive income. During the year ended December 31, 2009, the Company sold 301,600 shares resulting in a realized gain of $180,398 and recorded an other-than-temporary loss in the carrying value of its available-for-sale securities totaling $34,001.

During the year ended December 31, 2010, the Company the Company received 1,451,360 restricted shares of Legacy valued to $72,568 pursuant to a debt settlement and sold Nil Legacy shares. The Company recorded an other-than-temporary loss in the carrying value of its available-for-sale securities totaling $47,069. As a result, the carrying value of the available for sale shares of Legacy is $37,535 as at December 31, 2010.

During the year ended December 31, 2011, the Company sold Nil Legacy shares and recorded an additional unrealized loss of $ (33,781). As a result, the carrying value of the available for sale shares of Legacy is $3,754 as at December 30, 2011. Effective December 31, 2011, the Company recorded a $32,843 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares.

Available for sale securities – related parties include the following:

	December 31 ,		December 31,
	2011		2010
2,345,937 (2010-2,345,937) shares of Legacy Wine & Spirits	$	3,754	$	37,535
703,750 (2010- 703,750) shares of Organa Gardens International		1,407		4,504
	$	5,161	$	42,039

FILM PRODUCTION & DEVELOPMENT SECTOR

Film Production and development costs at December 31, 2011 are made up as follows:

	Gross Cost		Accumulated amortization		Writedown of film rights and related costs			Net Cost December 31, 2011		Net Cost December31, 2010

Acquired films and film rights	$	84,970	$	-		(84,970	)	$	-	$	1
Films in progress		5,793		-		(5,793	)		-		-

	$	90,763	$	-	$	(90,763	)	$	-	$	1

WASTE ENERGY SECTOR

The Thermal Oxidation Process System (TOPS) Greencycle Gasification plants decompose organic matter (with heat and air) and recover non-organics by utilizing specialized equipment and is a proven alternative to landfills. Greencycle uses low heat (500-600 Celsius) to convert all the carbon locked up in unsorted garbage into a form where it produces high quality heat through a second stage gas oxidizer running at around 1,100 Celsius. This process creates energy, enough to make electrical energy and support district heating / greenhouses. The Greencycle system provides controlled conditions to utilize Carbon Dioxide (CO2) for accelerated plant growth in greenhouses and algae farms. The other non-carbon materials in garbage, such as aluminum, tin, copper and stainless steel, and can be easily separated after all the carbon has been removed without melting or slagging. Micron sized metals, silica, calcium etc, are also sorted out for re-use by using the Ash Recycling and Recovery Equipment (ARRE) sub-system.

As of December 31, 2011, the Company has not secured any facilities to construct the Gasification Plant, nor has it incurred any other expenditures for the year ended December 31, 2011. (2010 - $Nil)

ALTERNATIVE FUELS SECTOR

On August 24, 2010, the Company signed an agreement with Global Terralene Inc. for the acquisition of all assets pertaining to Terralene Fuels. Under the terms of the agreement, the Company will issue 7,000,000 restricted common shares to Global Terralene Inc. in two phases. On November 30, 2010, the Company approved and issued 5,000,000 restricted common shares valued at $125,000 to Global Terralene Inc. The Company will issue a further 2,000,000 restricted common shares valued at $50,000 once certain documents outlined in the agreement are prepared and exchanged by both parties (issued February 2012). Terralene Fuel is a patented fuel alternative formulation that is the equivalent of 87 octane regular gasoline and utilizes renewable energy sources in 45% of its composition. Terralene’s unique fuel reduces greenhouse gas and other environmental damaging emissions and can be easily integrated into the existing fuel infrastructure. During the year ended December 31, 2011, the Company capitalized $6,212 in patent work.

Total Investments in Terralene Fuels costs at December 31, 2011 and 2010 total $131,212 and $125,000 respectively, and include the following assets:

Patents, trademarks, copyright

Formulas, reports, studies

Schematics, proprietary info

Website

Terralene brandname

The purchase was completd in 2012 and no preliminary allocation has been completed.

Amortization for intangible assets with definitive useful life purchased from Terralene Fuels, specifically the website, will be recorded over the estimated useful life of the website using the straight-line method for financial statement purposes when the product or service has been delivered or performed and invoiced by the Company and it begins to recognize revenues.

Ownership Interests.

The following chart specifies our stock ownership at December 31, 2011

Percent
Ownership	Entity	Nature of Ownership

9.70%	Legacy Wine & Spirits International Ltd.	3,934,357 Shares of Common Stock *

1.70%	Organa Gardens International Inc.	703,750 Shares of Common Stock **

_______

* 1,451,360 of these shares are restricted common shares

** 700,300 of these shares are restricted common shares.

Employees.

We currently have 2 full-time employee/consultants. None of our employees are subject to any collective bargaining agreements.

Change in Directors

On February 1, 2012, the Registrant accepted the resignation of Sharon Deutsch as Secretary, Treasurer, Director and Chief Financial Officer of the Registrant. The resignation was not motivated by a disagreement with the Registrant on any matter relating to the Registrant's operations, policies or practices.

On February 1, 2012 Matt Kelly, an American businessman, based in New York U.S.A., joined the Board of Directors and was appointed Secretary, Treasurer and Chief Financial Officer of the Registrant.

ITEM 1A. RISK FACTORS

Not applicable to smaller reporting companies

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

Property Held by Us. As of the dates specified in the following table, we held the following property in the following amounts:

Property	December 31, 2011	December 31, 2010

Cash	US $ 61	US $824

We do not presently own any interests in real estate. We do not presently own any inventory or equipment.

Our Facilities.

We do not own any real property. As of August 1, 2010, Terralene Fuels Corporation has leased 1250 sq. ft of office space from Holm Investments Ltd. at $2,500 per month for a period of 3 years.

Terralene Fuels Corporation principal corporate offices are located at 35 South Ocean Avenue Patchogue, NY, 11772 Fax – 1 888 265 0498 Phone – 1 888 488 6882

ITEM 3. LEGAL PROCEEDINGS

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

As at December 31, 2011 there were approximately 2,000 holders of the outstanding shares of the Golden Spirit Enterprises Ltd.'s $0.0001 par value common stock. Golden Spirit Enterprises Ltd. participates in the OTC Bulletin Board Electronic Quotation System maintained by the National Association of Securities Dealers, Inc. On or about April 18, 2000, we were removed from the Over-the-Counter Bulletin Board ("OTCBB") for failure to comply with NASD Rule 6530, which requires any company listed on the OTCBB to be current in its public reporting obligations pursuant to the Securities and Exchange Act of 1934. The Company was re-instated on the OTCBB on October 7, 2002 under the symbol "TWOU". Commensurate with the name change and forward stock split, the Company also took the necessary steps to change its symbol and CUSIP Number. Therefore, the Registrant's CUSIP Number has changed from 9021014 20 7 to 3811194 10 9. On October 8, 2003, being 6:30 A.M. EST, the Registrant's symbol changed from TWOU to "GSPM". On October 19, 2004, being 6:30 A.M. EST, the Registrant's symbol changed from GSPM to "GSML".

Effective at the opening on July 18, 2005 the Company’s symbol changed from GSML to “GSGL” and the CUSIP Number became 38119U 10 1.

Effective at the opening on June 30, 2006, the Company’s symbol changed from GSGL to “GSPT” and the CUSIP Number is now 38119N 10 7.

Effective at the opening on November 29, 2011, the Company’s symbol remained as “GSPT” and the CUSIP Number is now 88104B 10 5.

According to quotes provided by quotemedia.com, the Terralene Fuel Corporation’s common stock closed at:

Quarter	High		Low
2009 First Quarter	$	0.10	$	0.02
2009 Second Quarter	$	0.09	$	0.02
2009 Third Quarter	$	0.09	$	0.02
2009 Fourth Quarter	$	0.09	$	0.02
2010 First Quarter	$	0.04	$	0.02
2010 Second Quarter	$	0.09	$	0.02
2010 Third Quarter	$	0.07	$	0.03
2010 Fourth Quarter	$	0.05	$	0.03
2011 First Quarter	$	0.00	$	0.00
2011 Second Quarter	$	0.06	$	0.03
2011 Third Quarter	$	0.07	$	0.01
2011 Fourth Quarter	$	0.01	$	0.00

The Company traded as 2UOnline.com from January 1, 2003 to October 8, 2003, as Golden Spirit Minerals Ltd. from October 9, 2003 to October 18, 2004, as Golden Spirit Mining Ltd. from October 19, 2004 to July 17, 2005 and Golden Spirit Gaming Ltd. from July 18, 2005 to June 29, 2006 and Golden Spirit Enterprises Ltd. from June 30, 2006 to November 29, 2011 and Terralene Fuels Corporation thereafter to date. Such quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street NW, Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov.

Common Stock:

The Company is authorized to issue 500,000,000 shares of common stock, $.0001 par value, each share of common stock having equal rights and preferences, including voting privileges. The shares of $.0001 par value common stock of the Company constitute equity interests in the Company entitling each shareholder to a pro rata share of cash distributions made to shareholders, including dividend payments. The holders of the Company's common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of directors of the Company or any other matter, with the result that the holders of more than 50% of the shares voted for the election of those directors can elect all of the Directors. The holders of the Company's common stock are entitled to receive dividends when, as and if declared by the Company's Board of Directors from funds legally available therefore; provided, however, that the cash dividends are at the sole discretion of the Company's Board of Directors. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities of the Company and after provision has been made for each class of stock, if any, having preference in relation to the Company's common stock. Holders of the shares of Company's common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to the Company's common stock. All of the outstanding shares of the Company's common stock are duly authorized, validly issued, fully paid and non-assessable. As of December 31, 2011, 72,198,691 shares of Terralene Fuels Corporation’s common stock were issued and outstanding.

(1) 2011 Stock Transactions

On January 13, 2011, the Company issued 25,000 restricted common shares valued at $750 to a new director for his services and issued 250,000 restricted common shares valued at $7,500 to a consultant for his services in relation to the company’s Terralene Fuels project.

The Company issued a total of 12,000,000 common shares pursuant to the exercise of options under the Company’s 2011 Stock Incentive and Option Plan at prices between $0.03 - $0.035 per share to satisfy debt to related parties in the amount of $171,000 and for consulting services in the amount of $197,250.

During the year ended December 31, 2011, 15,000,000 restricted common shares were issued valued at $30,000 pursuant to deferred compensation contracts with related parties.

(2) 2010 Stock Transactions

During the year ended December 31, 2010, 515,000 incentive stock options were granted and immediately exercised at $0.04 per share to satisfy debts related parties in the amount of $20,600, 5,610,000 incentive stock options were granted and immediately exercised at $0.02 per share to satisfy debts related parties in the amount of $112,200 and 5,341,667 incentive stock options were granted and immediately exercised at $0.03 per share to satisfy debts related parties in the amount of $160,250 and 3,050,000 for services at $91,500.

During the year ended December 31, 2010, 1,500,000 restricted common shares were issued valued at $60,000 pursuant to deferred compensation contracts with related parties.

During the year ended December 31, 2010, 465,000 restricted common shares were issued valued at $14,950 to four individuals for advisory board and other services.

During the year ended December 31, 2010, 5,000,000 restricted common shares were issued valued at $125,000 pursuant to the acquisition of Terralene Fuels.

(3) 2011 Stock Options

On January 18, 2011, the Company filed a Registration Statement on Form S-8 to cover 12,000,000 shares of common stock to be granted pursuant to the Company’s 2011 Stock Incentive and Option Plan.

On December 23, 2011, the Company filed a Registration Statement on Form S-8 to cover 15,000,000 shares of common stock to be granted pursuant to the Company’s 2012 Stock Incentive and Option Plan.

During the year ended December 31, 2011, the Company issued a total of 12,000,000 common shares pursuant to the exercise of options under the Company’s 2011 Stock Incentive and Option Plan at prices between $0.03 - $0.035 per share to satisfy debt to related parties in the amount of $171,000 and for consulting services in the amount of $197,250.

The Company’s stock option activity is as follows:

	Number of options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life

Balance, December 31, 2009		3,002,517		$	0.20	2.67 years
Granted during 2010		14,516,667			-
Exercised during 2010		(14,516,667	)		-
Balance, December 31,2010		3,002,517			-
Granted during 2011		12,000,000			0.03
Exercised during 2011		(12,000,000	)
Balance, December 31, 2011		3,002,517		$	0.20	2.67 years

(4) 2010 Stock Options

On April 21, 2010, the Company filed a Registration Statement on Form S-8 to cover 10,000,000 shares of common stock to be granted pursuant to the Company’s 2010 Stock Incentive and Option Plan.

The Company’s stock option activity is as follows:

	Number of options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life

Balance, December 31, 2008		3,002,517		$	0.20	2.67 years
Granted during 2008		-			-
Exercised during 2008		-			-
Granted during 2009		3,900,000			-
Exercised during 2009		(3,900,000	)	$	0.03	2.67 years

Granted during 2010		14,516,667			-
Exercised during 2010		(14,516,667	)		0.03
Balance, December 31, 2010		3,002,517		$	0.09	2.67 years

ITEM 6. SELECTED FINANCIAL DATA

FINANCIAL HIGHLIGHTS

Fiscal Year Ended December 31	2011			2010			2009			2008			2007

Revenu1	$ Nil			$ Nil			$ Nil			$ Nil			$	43l
Operating Loss		(359,281	)		(352,321	)		(181,787	)		(274,195	)		(454,400	)
Net Loss		(393,813	)		(399,390	)		(36,170	)		(245,550	)		(422,958	)
BaBasic and diluted net loss per share		0.01			0.01			0.01			0.01			0.03
CaCash dividends declared per share		-			-			-			-			-
Cash, cash equivalents, & short term investments		61			824			1,223			1,556			6,282
Total assets		136,434			167,863			137,827			1,015,455			740,556
Long-term obligations		-			-			-			-			-
Stockholders’ equity (deficit)		35,389			6,413			(123,592	)		690,820			391,502

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING OF FUTURE EVENTS ARE NOT BASED ON HISTORICAL FACT.FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS "MAY", "SHALL", "WILL", "COULD", "EXPECT", "ESTIMATE", "ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE GIVEN THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.

Liquidity and Capital Resources.

For the year ended December 31, 2011, we had total assets of $136,434, compared to total assets in 2010 of $167,683. This includes a cash balance of $61, compared to $824 in 2010. We have available for sale securities with a fair value of $5,161as at December 31, 2011 and intangible assets of $131,212.

At December 31, 2011, we had current liabilities of $101,045, which was represented by accounts payable and accrued liabilities of $38,439 and $62,606 due to related parties. At December 31, 2010 we had current liabilities of $161,450. The decrease in liabilities was essentially due to a decrease in amounts payable to related parties. At December 31, 2011, we had a working capital deficiency of $(100,984) (2010 - $(160,626)).

Results of Operations

We realized revenue in 2011 of $Nil (2010- $ Nil) and other income of $Nil (2010 - $Nil). In prior years, our revenues from prior businesses totaled $167,449. During the year ended December 31, 2011 our loss was $393,813 (2010 - $399,390). This decrease in loss was due to an increase in consulting fees offset by a decrease in the loss on impairment of securities – related parties, decrease in professional fees and decrease in investor relations fees.

From inception to December 31, 2011, we have incurred cumulative net losses of $18,021,912 resulting primarily from a write-down and equity loss in Organa Gardens International Inc. (a related party) of $1,707,581, a $600,000 property option loss as a recorded value of certain restricted shares issued to Legacy Wine & Spirits International Ltd. (a related party – see our Investment in Available for sale securities (b) Legacy Wine & Spirits International Ltd. above) , a gain on the sale of securities – related parties of ($216,509) , a loss on impairment of securities-related parties of $115,602 and general and administrative expenses of $16,286,173, the majority of which is made up of consulting fees and stock based compensation expense totaling $7,836,741.

The cash and equivalents constitute our present internal sources of liquidity. Because we are not generating any significant revenues, our only external source of liquidity is the sale of our capital stock and any advances from officers, directors or shareholders.

To address the going concern problem discussed in our financial statements, we will require additional working capital. We will also require additional funds to implement our business strategies, including funds for: payment of increased operating expenses, and further implementation of film industry business strategies, payment of undetermined expenses relating to the Eneco venture and payment of undetermined expenses relating to the Terralene Fuels venture. No assurance can be given, however, that we will have access to the capital markets in the future, or that financing will be available on acceptable terms to satisfy our cash requirements needed to implement our business strategies. Our inability to access the capital markets or obtain acceptable financing could have a material adverse effect on our results of operations and financial condition and could severely threaten our ability to operate as a going concern. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary as a result of a number of factors.

Our Plan of Operation for the Next 12 Months. We anticipate that we will need to raise additional capital within the next 12 months in order to continue as a going concern. Anticipated revenues for the first quarter of 2009 are not expected to be significant. Therefore, additional capital may be raised through additional public or private financings, as well as borrowings and other resources. To the extent that additional capital is raised through the sale of equity or equity-related securities, the issuance of such securities could result in dilution of our stockholders. There can be no assurance that additional funding will be available on favorable terms, if at all. If adequate funds are not available within the next 12 months, we may be required to curtail our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain of our assets that we would not otherwise relinquish.

We do anticipate certain expenditures within the next 12 months for our Investment in Terralene Fuels. We do not anticipate a significant change in the number of our employees within the next 12 months. We are not aware of any material commitment or condition that may affect our liquidity within the next 12 months.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Securities held in our equity and other investments portfolio and equity derivatives are subject to price risk, and generally are not hedged.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Terralene Fuels Corporation

We have audited the accompanying consolidated balance sheets of Terralene Fuels Corporation, (formerly Golden Spirit Enterprises Ltd.) (a development stage company) as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two year period ended December 31, 2011 and for the cumulative period from September 13, 1998 (inception) through December 31, 2011. Terralene Fuels Corporation’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Terralene Fuels Corporation as of December 31, 2011 and 2010, and the results of its activities and cash flows for each of the years in the two year period ended December 31, 2011 and for the cumulative period from September 13, 1993 (inception) through December 31, 2011 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s current liabilities exceed current assets, has incurred significant losses since inception, all of which raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

__________________________

/s/ L.L. Bradford & Company, LLC

Las Vegas, Nevada

April 16, 2012

F-1

TERRALENE FUELS CORPORATION

(formerly Golden Spirit Enterprises Ltd.)

(A development stage company)

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2011			2010

ASSETS
CURRENT ASSETS
Cash	$	61		$	824

TOTAL CURRENT ASSETS		61			824

AVAILABLE FOR SALE SECURITIES – related parties		5,161			42,039
INVESTMENTS IN INTANGIBLE ASSETS		131,212			125,000
FILM PRODUCTION & DEVELOPMENT COSTS		-			1


TOTAL ASSETS	$	136,434		$	167,863

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITES
Accounts payable and accrued liabilities	$	38,439		$	31,695
Due to related parties		62,606			129,755

TOTAL CURRENT LIABILITIES		101,045			161,450

COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value, 500,000,000 shares authorized
Issued and outstanding:
72,198,691 (2010 – 44,923,691) common shares		7,220			4,492
Additional paid-in capital		18,467,650			18,063,878
Deferred compensation		(37,500	)		(56,135	)
Deficit accumulated during the development stage		(18,403,880	)		(18,010,067	)
Accumulated other comprehensive income (loss)		1,899			4,245

TOTAL STOCKHOLDERS’ EQUITY		35,389			6,413

TOTAL LIABILITIES AND STOCKHOLDER EQUITY	$	136,434		$	167,863

The accompanying notes are an integral part of these financial statements

F-2

TERRALENE FUELS CORPORATION

(formerly Golden Spirit Enterprises Ltd.)

(A development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

							September 13,
	Year Ended			Year Ended			1993 (inception)
	December 31,			December 31,			to December 31,
	2011			2010			2011
REVENUES
Processing fees	$	-		$	-		$	98,425
Gaming Revenue		-			-			18,596
Sale of oil and gas interest		-			-			47,501
Interest income		-			-			2,927
TOTAL REVENUES		-			-			167,449
COST OF SALES – Poker royalties and processing fees		-			-			30,601
GROSS PROFIT (LOSS)		-			-			136,848
GENERAL AND ADMINISTRATIVE EXPENSES
Advertising and marketing		-			-			93,895
Consulting fees		232,863			183,912			7,836,741
Depreciation and amortization		-			-			132,569
Exploration costs		-			-			241,754
Investor relations		26,128			34,724			757,463
Litigation settlement		-			-			52,169
Loss on settlement of debt		-			-			302,500
Management fees		-			-			378,447
Office and general		51,468			51,143			741,744
Poker Sponsorships		-			-			52,500
Professional fees		35,060			43,051			719,418
Travel and accommodation		6,518			18,217			289,097
Wages and salaries		7,243			11,617			268,293
Write-off of website development costs		-			-			425,682
Write-down (recovery) of URL costs		-			-			1,571,657
Write-down of technology license		-			-			2,055,938
Write-down of film production and distribution costs		1			-			90,763
Write-off of other assets		-			9,657			275,543
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES		359,281			352,321			16,286,173
OTHER INCOME (EXPENSES)
EQUITY LOSS FROM ORGANA GARDENS INTERNATIONAL		-			-			(1,394,280	)
WRITE-DOWN OF INVESTMENT IN ORGANA GARDENS		-			-			(313,301	)
GAIN/(LOSS) ON SALE OF SECURITIES-RELATED PARTIES		-			-			216,509
(LOSS) ON IMPAIRMENT OF SECURITIES-RELATED PARTIES		(34,532	)		(47,069	)		(115,602	)
DILUTION GAIN – LEGACY WINE&SPIRITS INTERNATIONAL		-			-			334,087
PROPERTY OPTION LOSS		-			-			(600,000	)
TOTAL OTHER INCOME (EXPENSES)		(34,532	)		(47,069	)		(1,872,587	)
Loss before income taxes		(393,813	)		(399,390	)		(18,021,912	)
Income Tax Provision		-			-			-
NET LOSS	$	(393,813	)	$	(399,390	)	$	(18,021,912	)
NET LOSS ATTRIBUTED TO NONCONTROLLING INTEREST		-			-			479,978
NET LOSS TO TERRALENE FUELS CORPORATION	$	(393,813	)	$	(399,390	)	$	(17,541,934	)
BASIC AND DILUTED LOSS PER COMMON SHARE	$	(0.01	)	$	(0.01	)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		57,486,554			31,352,220

The accompanying notes are an integral part of these financial statements

F-3

TERRALENE FUELS CORPORATION

(formerly Golden Spirit Enterprises Ltd.)

(A development stage company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE PERIOD FROM SEPTEMBER 13, 1993 (INCEPTION) TO DECEMBER 31, 2011

										Deficit
										Accumulated			Accumulated
	Common Stock				Additional			Deferred		During the			Other
	Number of Shares		Amount		Paid-in Capital			Compensation (Note 6)		Development Stage			Comprehensive Loss		Total
			$		$			$		$			$		$
Balance, September 13, 1993 (date of inception)		0		0		0			0		0			0		0
September 30, 2003 – common stock issued for cash at $0.01 per share		100,000		10		990			0		0			0		1,000
Net loss for the period ended December 31, 1993		0		0		0			0		(1,000	)		0		(1,000	)

Balance, December 31, 1993		100,000		10		990			0		(1,000	)		0		0
Net loss for the years ended December 31, 1994 through 1997		0		0		0			0		0			0		0
Net loss for the year ended December 31, 1998		0		0		0			0		(10,797	)		0		(10,797	)

Balance, December 31, 1998		100,000		10		990			0		(11,797	)		0		(10,797	)
January 6, 1999 – common stock issued for Rising Phoenix
finders’ fee at $18.00 per share		13,333		1		239,999			0		0			0		240,000
January 6, 1999 – common stock issued for cash and
management remuneration at $18.00 per share		10,000		1		179,999			0		0			0		180,000
January 28, 1999 – commons stock issued for services at $21.60 per share		10,000		1		215,999			0		0			0		216,000
February 26, 1999 – common stock issued for services at $21.60 per share		8,333		1		179,999			0		0			0		180,000
April 14, 1999 – common stock issued for cash (net of finance fee
of $99,500) at $4.80 to $15.00 per share		118,792		12		900,488			0		0			0		900,500
Less: fair value of warrants issued on financing		0		0		(764,095	)		0		0			0		(764,095	)
April 14, 1999 – warrants issued on financing		0		0		764,095			0		0			0		764,095
April 23, 1999 – stock based compensation		0		0		210,706			0		0			0		210,706
April 28, 1999 – common stock issued for technology licence
finder’s fee at $18.00 per share		6,667		1		119,999			0		0			0		120,000
June 15, 1999 – common stock issued for technology license at
$18.00 per share		50,000		5		899,995			0		0			0		900,000
June 15, 1999 – common stock issued for services at $15.00 per share share		333		0		5,000			0		0			0		5,000
June 30, 1999 – common stock issued for services at $15.60 per share hare		4,167		0		65,000			0		0			0		65,000
July 15, 1999 – warrants issued for URL purchase		0		0		328,858			0		0			0		328,858
July 20, 1999 – common stock issued for cash on exercise of
warrants at $18.0 per share		13,333		1		239,999			0		0			0		240,000
September 1, 1999 – warrants issued for URL purchase		0		0		220,146			0		0			0		220,146
September 1, 1999 – common stock issued for cash on exercise
of warrants at $18.00 per share		1,667		0		30,000			0					0		30,000
October 14, 1999 – common stock issued for cash on exercise of		667		0		10,000			0		0			0		10,000
warrants at $15.00 per share
October 22, 1999 – stock0based compensation		0		0		42,963			0		0			0		42,963
November 3, 1999 – common stock issued for cash on exercise
of warrants at $15.00 per share		1,667		0		25,000			0		0			0		25,000
November 9, 1999 – common stock issued for technology
license at $ per share		50,000		5		899,995			0		0			0		900,000
November 15, 1999 – common stock issued for cash on exercise
of warrants at $15.00 per share		3,333		0		50,000			0		0			0		50,000
November 19, 1999 – common stock issued for acquisition of
URL’s at $18.00 per share		10,833		1		194,999			0		0			0		195,000
November 24, 1999 – common stock issued for acquisition of
URL’s at $18.00 per share		13,333		1		239,999			0		0			0		240,000
November 25, 1999 – common stock issued for acquisition of
URL’s at $18.00 per share		8,333		1		149,999			0		0			0		150,000
November 25, 1999 – common stock issued for acquisition of
URL’s at $18.00 per share		4,167		0		75,000			0		0			0		75,000
November 29, 1999 – common stock issued for cash on exercise
of warrants at $15.00 per share		667		0		10,000			0		0			0		10,000
December 6, 1999 – common stock issued for cash on exercise
of warrants at $15.00 per share		833		0		12,500			0		0			0		12,500
December 9, 1999 – common stock issued for cash on exercise
of warrants at $15.00 per share		833		0		12,500			0		0			0		12,500
Dividends paid		0		0		0			0		(219,978	)		0		(219,978	)
Rounding adjustment		0		2		(2	)		0		0			0		0
Net loss		0		0		0			0		(4,201,051	)		0		(4,201,051	)

F-4

Balance, December 31, 1999	431,291	43	5,560,130		0		(4,432,826	)	0	1,127,347
January 24, 2000 – common stock issued for cash on exercise	833	0	12,500		0		0		0	12,500
of warrants at $15.00 per share
January 26, 2000 – common stock issued for cash on exercise	1,333	0	20,000		0		0		0	20,000
of warrants at $15.00 per share
January 31, 2000 – common stock issued for cash on exercise	833	0	12,500		0		0		0	12,500
of warrants at $15.00 per share
February 8, 2000 – common stock issued for cash on exercise	833	0	12,500		0		0		0	12,500
of warrants at $15.00 per share
February 9, 2000 – common stock issued for cash on exercise	833	0	12,500		0		0		0	12,500
of warrants at $15.00 per share
February 11, 2000 – common stock issued for cash on exercise	2,500	0	37,500		0		0		0	37,500
of warrants at $15.00 per share
February 18, 2000 – common stock issued for cash on exercise	2,500	0	37,500		0		0		0	37,500
of warrants at $15.0 per share
February 24, 2000 – common stock issued for deferred compensation at $51.00 per share	11,667	1	594,999		(595,000	)	0		0	0
February 24, 2000 – common stock issued for interest in oil and gas property	63,333	6	1,519,994		0		0		0	1,520,000
February 24, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	833	0	12,500		0		0		0	12,500
February 28, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	1,667	0	25,000		0		0		0	25,000
March 2, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	833	0	12,500		0		0		0	12,500
March 8, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	833	0	12,500		0		0		0	12,500
March 17, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	833	0	12,500		0		0		0	12,500
March 24, 2000 – common stock issued for cash on exercise
of warrants at $15.0 per share	1,667	0	25,000		0		0		0	25,000
March 31, 2000 – common stock issued for cash on exercise
of warrants at $15.0 per share	833	0	12,500		0		0		0	12,500
April 12, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	833	0	12,500		0		0		0	12,500
April 28, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	833	0	12,500		0		0		0	12,500
August 10 2000 – common stock issued for services at $0.30
per share	833	0	15,000		0		0		0	15,000
October 5, 2000 – common stock issued for cash on exercise
of warrants at $15.00 per share	667	0	10,000		0		0		0	10,000
Deferred compensation expense recorded in the year	0	0	0		190,894		0			190,894
Rounding adjustment	0	3	(3	)	0		0		0	0
Net loss	0	0	0		0		(1,350,249	)	0	(1,350,249	)

Balance, December 31, 2000	526,621	53	7,982,620		(404,106	)	(5,783,075	)	0	1,795,492
Deferred compensation expense recorded in the year	0	0	0		208,246		0		0	208,246
Net loss	0	0	0		0		(1,495,844	)	0	(1,495,844	)

Balance, December 31, 2001	526,621	53	7,982,620		(195,860	)	(7,278,919	)	0	507,894
November 6, 2002 – common stock issued for services at $1.20 per share	149,167	15	178,985		0		0		0	179,000
Unrealized gain on available-for-sale securities	0	0	0		0		0		6,832	6,832
Deferred compensation expense recorded in the year	0	0	0		71,896		0		0	71,896
Net loss	0	0	0		0		(1,025,820	)	0	(1,025,820	)

F-5

Balance, December 31, 2002	675,788		68		8,161,605		(123,964	)	(8,304,739	)	6,832		(260,198	)
January 10, 2003 – common stock issued for deferred compensation at $.60	325,000		33		194,967		(195,000	)	0		0		0
January 10, 2003 – common stock issued for services at $0.60	16,667		2		9,998								10,000
January 14, 2003 – common stock issued to acquire “Miss Beverly Hills”	1,666,667		167		199,833		0		0		0		200,000
January 21, 2003 – common stock issued for services at $0.36	833,333		83		299,917		0		0		0		300,000
February 4, 2003 – return and cancellation of common stock	(1,666,667	)	(167	)	(199,833	)	0		0		0		(200,000	)
February 4, 2003 – return and cancellation of common stock	(416,667	)	(42	)	(149,958	)	0		0		0		(150,000	)
February 12, 2003 – common stock issued for exercise of stock options at $0.36	16,667		2		5,998		0		0		0		6,000
February 19, 2003 – common stock issued for exercise of stock options at $0.36	16,667		2		5,998		0		0		0		6,000
April 14, 2003 – common stock issued for exercise of stock options at $0.36	33,333		3		11,997		0		0		0		12,000
May 2, 2003 – common stock issued for exercise of stock options at $0.36	163,333		16		58,784		0		0		0		58,800
May 6, 2003 – common stock issued for exercise of stock options at $0.36	41,667		4		14,996		0		0		0		15,000
May 16, 2003 – common stock issued for exercise of stock options at $0.36	33,333		3		11,997		0		0		0		12,000
May 27, 2003 – return and cancellation of common stock	(41,667	)	(4	)	(14,996	)	0		0		0		(15,000	)
May 30, 2003 – common stock issued for exercise of stock options at $0.36	66,667		7		23,993		0		0		0		24,000
June 11, 2003 – common stock issued for exercise of stock options at $0.42	145,833		15		61,235		0		0		0		61,250
June 23, 2003 – common stock issued for exercise of stock options at $0.42	16,667		2		6,998		0		0		0		7,000
June 26, 2003 - common stock issued for exercise of stock options at $0.42	16,667		2		6,998		0		0		0		7,000
July 16, 2003 - common stock issued for exercise of stock options at $0.42	37,500		4		15,746		0		0		0		15,750
July 17, 2003 - common stock issued for exercise of stock options at $0.42	25,000		3		10,497		0		0		0		10,500
July 28, 2003 - common stock issued for exercise of stock options at $0.42	12,500		1		5,249		0		0		0		5,250
August 1, 2003 - common stock issued for exercise of stock options at $0.42	50,000		5		20,995		0		0		0		21,000
August 8, 2003 - common stock issued for exercise of stock options at $0.42	16,667		2		6,998		0		0		0		7,000
August 11, 2003 - common stock issued for exercise of stock options at $0.42	45,833		5		19,245		0		0		0		19,250
August 14, 2003 - common stock issued for exercise of stock options at $0.42	8,333		1		3,499		0		0		0		3,500
August 14, 2003 - common stock issued for exercise of stock options at $0.48	91,667		9		43,991		0		0		0		44,000
August 29, 2003 - common stock issued for exercise of stock options at $0.48	25,000		3		11,997		0		0		0		12,000
August 29, 2003 - common stock issued for exercise of stock options at $0.42	8,333		1		3,499		0		0		0		3,500
October 13, 2003 – common stock issued for debt settlement at $0.54	338,426		34		182,716		0		0		0		182,750
October 13, 2003 – common stock issued for exercise of stock options at $0.04	66,667		7		47,993		0		0		0		48,000
October 22 , 2003 – common stock issued for exercise of stock options at $0.72	46,111		5		33,195		0		0		0		33,200
October 22, 2003 – common stock issued for interest in mining property at $0.48	25,000		3		26,997		0		0		0		27,000
October 24 , 2003 – common stock issued for exercise of stock options at $0.72	30,904		3		22,248		0		0		0		22,251
November 26, 2003 – common stock issued for exercise of stock options at $0.72	55,556		6		39,994		0		0		0		40,000
December 2, 2003 – common stock issued for exercise of stock options at $0.72	78,540		8		56,541		0		0		0		56,549
December 16, 2003 – return and cancellation of common stock	(5,556	)	(1	)	(2,332	)	0		0		0		(2,333	)
Stock-based compensation	0		0		364,300		0		0		0		364,300
Unrealized loss on available-for-sale securities	0		0		0		0		0		(6,947	)	(6,947	)
Deferred compensation expense	0		0		0		130,332		0		0		130,332
Rounding adjustment	0		(5	)	5		0		0		0		0
Net loss	0		0		0		0		(1,279,867	)	0		(1,279,867	)

F-6

Balance, December 31, 2003	2,899,769		290		9,623,900		(188,632	)	(9,584,606	)	(115	)	(149,163	)
January 10, 2004 - common stock issued for deferred compensation at $0.90	111,111		11		99,989		(100,000	)	0		0		0
January 14, 2004 – common stock issued for debt at $0.72	452,778		45		325,955		0		0		0		326,000
March 26, 2004 – common stock issued for services at $0.36	22,222		2		7,998		0		0		0		8,000
May 21, 2004 – common stock issued for exercise of stock options at $0.18	144,444		14		25,986		0		0		0		26,000
June 8, 2004 – common stock issued for exercise of stock options at $0.18	83,333		8		14,992		0		0		0		15,000
June 9, 2004 – common stock issued for exercise of stock options at $0.18	55,556		6		9,994		0		0		0		10,000
June 17, 2004 - common stock issued for debt at $0.18	344,444		34		61,966		0		0		0		62,000
June 29, 2004 – common stock issued for exercise of stock options at $0.18	50,000		5		8,995		0		0		0		9,000
July 6, 2004 – return and cancellation of common stock	(72,222	)	(7	)	(12,993	)	0		0		0		(13,000	)
July 6, 2004 – common stock issued for exercise of stock options at $0.18	88,889		9		15,991		0		0		0		16,000
September 27, 2004–common stock issued for exercise of stock options at $2.16	166,667		17		359,983		0		0		0		360,000
September 28, 2004–common stock issued for exercise of stock options at $2.16	111,111		11		239,989		0		0		0		240,000
October 1, 2004 – common stock issued for services at $1.80	7,222		1		12,999		(13,000	)	0		0		0
October 1, 2004 – common stock issued for services at $1.80	97,222		10		174,990		(175,000	)	0		0		0
October 18, 2004 – common stock issued for stock dividend (Note 6)	445,811		45		641,923		0		(641,968	)	0		0
October 25, 2004 – common stock issued for property at $1.08	5,556		1		5,999		0		0		0		6,000
November 29, 2004 - common stock issued for property rights at $1.26	55,556		6		69,994		0		0		0		70,000
December 1, 2004 – common stock issued for services at $1.26	5,556		1		6,999		0		0		0		7,000
December 1, 2004 – common stock issued for services at $1.26	5,556		1		6,999		0		0		0		7,000
December 15, 2004 – common stock issued for property rights	55,556		6		59,994		0		0		0		60,000
Share reconciliation after dividend issue	(20	)	0		0		0		0		0		0
Stock based compensation	0		0		552,100		0		0		0		552,100
Unrealized loss on available-for-sale securities	0		0		0		0		0		(1,112	)	(1,112	)
Deferred compensation expense	0		0		0		203,917		0		0		203,917
Rounding adjustment	0		(2	)	1		0		0		0		(1	)
Net loss	0		0		0		0		(1,883,337	)	0		(1,883,337	)

Balance, December 31, 2004	5,136,117		514		12,314,743		(272,715	)	(12,109,911	)	(1,227	)	(68,596	)
February 15, 2005 - common stock issued for stock options at $0.54	143,056		14		77,236		0		0		0		77,250
February 25, 2005 - common stock issued for stock options at $0.54	27,778		3		14,997		0		0		0		15,000
April 7, 2005 - common stock issued for stock options at $0.54	27,778		3		14,997		0		0		0		15,000
April 8, 2005 - common stock issued for stock options at $0.54	83,333		8		44,992		0		0		0		45,000
May 17, 2005 - common stock issued for stock options at $0.54	83,333		8		44,992		0		0		0		45,000
June 28, 2005 - common stock issued for consulting at $0.36	166,667		17		59,983		(60,000	)	0		0		0
July 5, 2005 - common stock issued for stock options at $0.36	186,111		19		66,981		0		0		0		67,000
July 22, 2005 - common stock issued for stock options at $0.36	55,556		6		19,994		0		0		0		20,000
July 26, 2005 - common stock issued for stock options at $0.36	138,889		14		49,986		0		0		0		50,000
August 10, 2005 - common stock issued for stock options at $0.36	109,722		11		39,489		0		0		0		39,500
July 13, 2005 - common stock issued for private placement at $0.36	152,778		15		54,985		0		0		0		55,000
July 12, 2005 - common stock issued for consulting services at $0.36	5,555,556		556		1,999,444		(2,000,000	)	0		0		0
Stock0based compensation	0		0		743,500		0		0		0		743,500
Unrealized gain on available-for-sale securities	0		0		0		0		0		1,112		1,112
Deferred compensation expense	0		0		0		520,208		0		0		520,208
Rounding adjustment	0		(1	)	1		0		0		0		0
Net loss	0		0		0		0		(1,842,055	)	0		(1,842,055	)

F-7

Balance, December 31, 2005	11,866,674		1,187		15,546,320		(1,812,507	)	(13,951,966	)	(115	)	(217,081	)
January 18, 2006 - common stock issued for property options at $0.36	555,556		56		199,944		0		0		0		200,000
January 27, 2006 - common stock issued for stock options at $0.36	56,944		6		20,494		0		0		0		20,500
January 31, 2006 - common stock issued for stock options at $0.54	27,778		3		14,997		0		0		0		15,000
February 2, 2006 - common stock issued for stock options at $0.54	131,094		13		70,777		0		0		0		70,790
February 6, 2006 - common stock issued for stock options at $0.36	127,778		13		45,987		0		0		0		46,000
February 9, 2006 - common stock issued for stock options at $0.54	88,889		9		47,991		0		0		0		48,000
February 27, 2006 - common stock issued for property options at $0.36	555,556		56		199,944		0		0		0		200,000
March 30, 2006 - common stock issued for consulting services at $0.54	16,667		2		8,998		0		0		0		9,000
April 1, 2006 - common stock issued for property options at $0.36	555,556		56		199,944		0		0		0		200,000
April 24, 2006 - common stock issued for stock options at $0.36	61,111		6		21,994		0		0		0		22,000
May 8, 2006 - common stock issued for stock options at $0.36	111,111		11		39,989		0		0		0		40,000
June 2, 2006 - common stock issued for consulting services at $0.18	972,222		97		192,403		(192,500	)	0		0		0
June 22, 2006 – common stock issued for stock options at $0.18	41,667		4		7,496		0		0		0		7,500
September 19, 2006 – common stock issued for stock options at $0.09	60,000		6		5,394		0		0		0		5,400
December 13, 2006 – common stock issued for stock options at $0.09	200,000		20		17,980		0		0		0		18,000
December 14, 2006 – common stock issued for consulting services at $0.19	100,000		10		18,990		0		0		0		19,000
Stock based compensation	0		0		66,600		0		0		0		66,600
Unrealized gain on available-for-sale securities	0		0		0		0		0		(569	)	(569	)
Deferred compensation expense	0		0		0		1,854,517		0		0		1,854,517
Rounding adjustment	21		(2	)	2		0		0		0		0
Net loss	0		0		0		0		(2,954,033	)	0		(2,954,033	)

Balance, December 31, 2006	15,528,624		1,553		16,726,244		(150,490	)	(16,905,999	)	(684	)	(329,376	)
February 1, 2007 – common stock issued for stock options at $0.09	170,000		17		15,283		0		0		0		15,300
April 3, 2007 – common stock issued for stock options at $0.09	305,000		30		27,420		0		0		0		27,450
April 13, 2007 – common stock issued for stock options at $0.09	265,000		27		23,823		0		0		0		23,850
April 30, 2007 – common stock issued for stock options at $0.09	250,000		25		22,475		0		0		0		22,500
April 30, 2007 – common stock issued for consulting services at $0.30	7,500		1		2,249		0		0		0		2,250
June 1, 2007 - common stock issued for private placement at $0.25	200,000		20		49,980		0		0		0		50,000
June 11, 2007 - return and cancellation of common stock	(30,000	)	(3	)	(2,697	)	0		0		0		(2,700	)
June 21, 2007 - common stock issued for stock options at $0.09	140,000		14		12,586		0		0		0		12,600
June 26, 2007 – common stock issued for stock options at $0.10	200,000		20		19,980		0		0		0		20,000
July 13, 2007 - common stock issued for stock options at $0.10	50,000		5		4,995		0		0		0		5,000
July 30, 2007 - return and cancellation of common stock	(50,000	)	(5	)	(4,995	)	0		0		0		(5,000	)
August 15, 2007 - common stock issued for deferred compensation at $0.18	200,000		20		35,980		(36,000	)	0		0		0
October 26, 2007 - commons stock issued for stock options at $0.09	30,000		3		2,697		0		0		0		2,700
October 26, 2007 - commons stock issued for stock options at $0.10	500,000		50		49,950		0		0		0		50,000
November 1, 2007 - return and cancellation of common stock	(250,000	)	(25	)	(24,975	)	0		0		0		(25,000	)
November 2, 2007 - commons stock issued for stock options at $0.10	250,000		25		24,975		0		0		0		25,000
November 7, 2007 - common stock issued for stock options at $0.10	400,000		40		39,960		0		0		0		40,000
November 7, 2007 - return and cancellation of common stock	(100,000	)	(10	)	(9,990	)	0		0		0		(10,000	)
November 20, 2007 - return and cancellation of common stock	(250,000	)	(25	)	(24,975	)	0		0		0		(25,000	)
November 21, 2007 - commons stock issued for stock options at $0.10	250,000		25		24,975		0		0		0		25,000
November 21, 2007 - common stock issued for private placement at $0.20	25,000		2		4,998		0		0		0		5,000
December 20, 2007 - return and cancellation of common stock	(150,000	)	(15	)	(14,985	)	0		0		0		(15,000	)
Stock based compensation	0		0		228,000		0		0		0		228,000
Unrealized gain on available-for-sale securities	0		0		0		0		0		587,218		587,218
Deferred compensation expense	0		0		0		84,668		0		0		84,668
Rounding adjustment	170		0		0		0		0		0		0
Net Loss	0		0		0		0		(422,958	)	0		(422,958	)


Balance, December 31, 2007	17,941,294		1,794		17,233,953		(101,822	)	(17,328,957	)	586,534		391,502

F-8

February 27, 2008 – common stock issued for director services at $0.11	30,000		3		3,297								3,300
May 16, 2008 - commons stock issued for stock options at $0.10	250,000		25		24,975								25,000
June 2, 2008 - commons stock issued for stock options at $0.10	375,500		37		37,513								37,550
June 4, 2008 - commons stock issued for stock options at $0.10	37,000		4		3,696								3,700
June 18, 2008 – common stock issued for director services at $0.14	25,000		2		3,498								3,500
July 21, 2008 - commons stock issued for stock options at $0.10	158,230		16		15,807								15,823
September 16, 2008 – common stock issued for director services at $0.04	25,000		2		998								1,000
Unrealized gain on available-for-sale securities											379,702		379,702
Deferred compensation expense							75,293						75,293
Net Loss									(245,550	)			(245,550	)

Balance, December 31, 2008	18,842,024		1,883		17,323,737		(26,529	)	(17,574,507	)	966,236		690,820

August 10, 2009 - commons stock issued for stock options at $0.04	100,000		10		3,990								4,000
October 6, 2009 - common stock issued for stock options at $0.02	25,000		2		498								500
October 22, 2009 - common stock issued for stock options at $0.02	2,500,000		250		49,750								50,000
November 25, 2009 - common stock issued for stock options at $0.06	100,000		10		5,990								6,000
November 30, 2009 - common stock issued for services at $0.07	700,000		70		48,930		(49,000	)					0
December 4, 2009 - common stock issued for stock options at $0.05	400,000		40		19,960								20,000
December 16, 2009 - common stock issued for stock options at $0.05	275,000		28		13,722								13,750
December 30, 2009 - common stock issued for stock options at $0.03	500,000		50		14,950								15,000
Unrealized gain on available-for-sale securities											(704,024	)	(704,024	)
Write down of securities											(34,170	)	(34,170	)
Realized gain of sale of securities											(179,618	)	(179,618	)
Deferred compensation expense							30,320						30,320
Net Loss									(36,170	)			(36,170	)

Balance, December 31,2009	23,442,024		2,343		17,481,527		(45,209	)	(17,610,677	)	48,424		(123,592	)

January 25 , 2010 - common stock issued for stock options at $0.04	515,000		52		20,548								20,600
April 15 , 2010 - common stock issued for stock options at $0.02	1,150,000		115		22,885								23,000
April 20, 2010 - common stock issued for stock options at $0.02	2,435,000		244		48,456								48,700
April 26, 2010 - common stock issued for stock options at $0.02	700,000		70		13,930								14,000
May 12, 2010 - common stock issued for stock options at $0.02	1,325,000		132		26,368								26,500
May 26, 2010 - common stock issued for services at $0.04	1,500,000		150		59,850		(60,000	)					0
August 12, 2010- common stock issued for stock options @ $0.03	5,200,000		520		155,480								156,000
October 27, 2010 - common stock issued for options at $0.03	250,000		25		7,475								7,500
October 27, 2010 - common stock issued for services at $0.05	50,000		5		2,495								2,500
November 4, 2010 - cancellation of common stock issued for stock options at $0.03	(500,000	)	(50	)	(14,950	)							(15,000	)
November 4, 2010 - common stock issued for options at $0.03	500,000		50		14,950								15,000
November 24, 2010 - common stock issued for services at $0.03	2,941,667		294		87,956								88,250
December 9, 2010 - common stock issued for services at $0.03	415,000		42		12,408								12,450
December 9, 2010 - common stock issued for acquisition at $0.025	5,000,000		500		124,500								125,000
December 9, 2010 - cancellation of common stock issued for stock options at $0.03	(800,000	)	(80	)	(23,920	)							(24,000	)
December 9, 2010 - common stock issued for options at $0.03	800,000		80		23,920								24,000
Unrealized gain on available-for-sale securities											2,890		2,890
Write down of securities											(47,069	)	(47,069	)
Deferred compensation expense							49,074						49,074
Net Loss									(399,390	)			(399,390	)

Balance, December 31, 2010	44,923,691		4,492		18,063,878		(56,135	)	(18,010,067	)	4,245		6,413

January 13, 2011 - common stock issued for services at $0.03	275,000		28		8,222								8,250
February 1, 2011 - common stock issued for options at $0.03	2,400,000		240		71,760								72,000
March 2, 2011 - common stock issued for options at $0.03	3,450,000		345		103,155								103,500
April 18, 2011 - common stock issued for options at $0.035	1,650,000		165		57,585								57,750
May 23, 2011- common stock issued for options at $0.03	4,500,000		450		134,550								135,000
December 27, 2011 - common stock issued for services at $0.002	15,000,000		1,500		28,500		(30,000	)					0
Unrealized gain on available-for-sale securities											32,186		32,186
Write down of securities											(34,532	)	(34,532	)
Deferred compensation expense							48,635						48,635
Net Loss									(393,813	)			(393,813	)

Balance, December 31, 2011	72,198,691		7,220		18,467,650		(37,500	)	(18,403,880	)	1,899		35,389

The accompanying notes are an integral part of these financial statements

F-9

TERRALENE FUELS CORPORATION

(formerly Golden Spirit Enterprises Ltd.)

(A development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

							September 13,
	Year ended			Year ended			1993 (inception)
	December 31,			December 31,			to December 31,
	2011			2010			2011
OPERATING ACTIVITIES
Net loss	$	(393,813	)	$	(399,390	)	$	(18,021,912	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			-			132,569
Fees and services paid for with shares		254,135			155,524			5,506,668
Loss on settlement of debt		-			-			302,500
Stock-based compensation		-			-			2,208,169
Non-cash component of URL write-down		-			-			1,214,193
Resource property acquisition and exploration costs		-			-			763,000
Film production and development costs		-			-			(90,763	)
Write-down of technology license		-			-			2,055,938
Write-off of website development costs		-			-			206,876
Write-down of film production & development costs		1			-			90,763
Write-off of other assets		-			9,657			9,657
Equity loss from Organa Gardens International Inc.		-			-			1,394,280
Write-down of investment in Organa Gardens International Inc.		-			-			313,301
(Gain)/Loss on sale of marketable securities		-			-			(216,509	)
Loss on impairment of securities		34,532			47,069			115,602
Dilution gain – Legacy Wine & Spirits International Ltd.		-			-			(334,087	)
Net changes in operating assets and liabilities		6,744			1,189			322,807
CASH FLOWS USED IN OPERATING ACTIVITIES		(98,401	)		(185,951	)		(4,026,948	)

INVESTING ACTIVITIES
Deposit		-			-			(75,000	)
Technology license		-			-			(135,938	)
Acquisition of furniture and equipment		-			-			(32,696	)
Website development costs		-			-			(306,876	)
Other intangible assets		(6,212	)		(9,657	)		(21,058	)
Purchase of securities – related parties		-			-			(75,603	)
Net proceeds from sale of securities – related parties		-			-			380,238
Net cash on disposition of Legacy Wine & Spirits International Ltd.		-			-			209,955
CASH FLOWS (USED IN) INVESTING ACTIVITIES		(6,212	)		(9,657	)		(56,978	)

FINANCING ACTIVITIES
Net advances (to)/ from related parties		103,850			195,209			958,564
Net proceeds on sale of common stock		-			-			3,125,423
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		103,850			195,209			4,083,987

NET (DECREASE) INCREASE IN CASH		(763	)		(399	)		61

CASH, BEGINNING OF YEAR		824			1,223			-

CASH , END OF YEAR	$	61		$	824		$	61

The accompanying notes are an integral part of these financial statements

F-10

TERRALENE FUELS CORPORATION

(formerly Golden Spirit Enterprises Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011 AND 2010

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Teerralene Fuels Corporation, (formetly Golden Spirit Enterprises Ltd.) (The “Company”) was incorporated on September 13, 1993 in the State of Delaware as Power Direct, Inc. On January 31, 2000 the Company changed its name to 2U Online.com Inc. to reflect management’s decision to shift the Company’s focus from oil and gas exploration and development to internet-based business development. On October 8, 2003, the Company changed its name to Golden Spirit Minerals Ltd. to reflect management’s decision to shift the Company’s focus from internet-based business development to mineral exploration. On October 19, 2004, the Company changed its name to Golden Spirit Mining Ltd. On July 18, 2005, the Company changed its name to Golden Spirit Gaming Ltd. to reflect management’s decision to develop an online gaming business. The launch of the updated goldenspiritpoker.com website featuring real cash games, in addition to play money games, occurred in January 2006. By agreement dated July 18, 2005 as amended September 20, 2005 (the “Amended Agreement”), the Company agreed to acquire 100% of the issued and outstanding common shares of 4 Of A Kind Enterprises (“4KE”) doing business as EverythingAboutPoker.com for consideration of 1,388,889 post-reverse split restricted shares of the Company’s common stock which were placed in trust pending finalization of the agreement. The parties have agreed to complete this acquisition, subject to satisfactory completion of due diligence (See Note 5), effective March 31, 2006. Effective June 30, 2006, the Company completed a 1 for 18 reverse stock split (refer Note 7) and changed its name to Golden Spirit Enterprises Ltd. to reflect the Company’s plan to expand its operations to include the marketing of other products and venues not related to gaming. including the development, production, financing and packaging of innovative film and television programming. In addition, the Company has signed an agreement with Eneco Industries to participate in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants and the Company signed an agreement with Global Terralene Inc. for the acquisition of all assets pertaining to Terralene Fuels.(refer to Note 4). On November 29, 2011, the Company changed its name to Terralene Fuels Corporation.

GOING CONCERN

The consolidated financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception of $18,021,912 and at December 31, 2011 had a working capital deficiency of $100,984. The Company and its subsidiaries are in the development stage and further significant losses are expected to be incurred in developing its business. The recoverability of the carrying value of assets and the ability of the Company to continue as a going concern is dependent on raising additional capital and ultimately on generating future profitable operations. There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs. Given the Company’s limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability. The Company intends to fund the marketing of its business with both equity financing and joint venture opportunities, although there are no assurances these opportunities will be successful. Accordingly, these factors raise substantial doubt regarding the ability of the Company to continue as a going concern.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The financial statements include the accounts of the Company and its subsidiaries, a 100% interest in PD Oil & Gas, Inc. (inactive), and a 100% interest in Cardstakes.com Enterprises Ltd. (inactive).

Furniture and Equipment

Furniture and equipment is carried at acquisition cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets on a straight line basis.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates and Assumptions

Preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United Stares requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The significant areas requiring management’s estimates and assumptions relate to determining the fair value of stock-based compensation, fair value of shares issued for services and the acquisitions and useful lives of long-lived assets.

Fair Value of Financial Instruments

The Company’s financial instruments include cash, receivables, available-for-sale securities, amounts due from Legacy Wine & Spirits International Ltd., accounts payable and accrued liabilities, amounts due to Organa Gardens International Inc., and due to related parties. Management believes the fair values of these financial instruments approximate their carrying values due to their short-term nature.

The Company adopted ASC Topic 820-10 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, ASC Topic 820-10 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

*	Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques

In general, and where applicable, we use quoted prices in an active market for marketable securities that are traded on exchanges. These marketable securities are included in Level 1.

Foreign Currency Translation

The financial statements are presented in United States dollars. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates that prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Available For Sale Securities – Related Party

The Company holds marketable equity securities which are available-for-sale and as such, their carrying value is adjusted to market at the end of each reporting period. Unrealized gains and losses on these investments are recorded as a component of accumulated other comprehensive income (loss) and are recorded as a component of net income (loss) when realized. However, if there is a permanent decline in the market value of available-for-sale securities, this permanent market value adjustment is taken into income in the period.

Intangible Assets

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 , “Intangibles-Goodwill and Other” requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of ASC 350. This standard also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment. As of December 31, 2011, the Company has not completed the purchase of intangible assets. The Company's investment in intangible assets will consist of the acquisition of patents and other proprietary information of Terralene Fuels, a patented fuel alternative formulation. Except for the website, the Company determined that the intangibles have indefinite useful lives and will be reviewed annually for impairment.

Film Production and Development Costs

Capitalized film production and development costs consist of investments in films which include the unamortized costs of completed films which have been produced by the Company or for which the Company has acquired distribution rights. For films produced by the Company, capitalized costs include all direct production and financing costs, and production overhead. For acquired films, capitalized costs consist of minimum guarantee payments to acquire the distribution rights. Costs of acquiring and producing films are amortized using the individual-film-forecast method, whereby these are amortized and participation and residual costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the films.

Capitalized film costs are stated at the lower of amortized cost or estimated fair value on an individual film basis. The valuation of investment in films is reviewed on a title-by-title basis, when an event or changes in circumstances indicate that the fair value of a film is less than its unamortized cost. The fair value of the film is determined using management’s future revenue and cost estimates. Additional amortization is recorded for the amount, if any, by which the unamortized costs exceed the estimated fair value of the film. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in management’s future revenue estimates.

Films in progress include the accumulated costs of production, which have not yet been completed by the Company. Films in development include costs of acquiring film rights to original screenplays and costs to adapt such projects. Such costs are capitalized and, upon commencement of production, are transferred to production costs. Projects in development are written off at the earlier of the date determined not to be recoverable or when abandoned, or three years from the date of the initial investment.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. A valuation allowance is provided for deferred tax assets if it is more likely than not that the Company will not realize the future benefit, or if the future deductibility is uncertain.

Loss per Common Share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury method. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

Recent Accounting Pronouncements

In May 2011, FASB issued ASU 2011-04 “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the Board’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. For public entities, the new guideline is effective for interim and annual periods beginning after December 15, 2011 and should be applied prospectively. The Company does not expect that the guidance effective in future periods will have a material impact on its consolidated financial statements.

In May 2011, the FASB issued ASC Update No. 2011-05, Comprehensive Income (Topic 820): Presentation of Comprehensive Income. Update No. 2011-05 requires that net income, items of other comprehensive income and total comprehensive income be presented in one continuous statement or two separate consecutive statements. The amendments in this Update also require that reclassifications from other comprehensive income to net income be presented on the face of the financial statements. We are required to adopt Update No. 2011-05 for our first quarter ending March 31, 2012, with the exception of the presentation of reclassifications on the face of the financial statements, which has been deferred by the FASB under ASC Update No. 2011-12, Comprehensive Income (Topic 820): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income. Our adoption of Update No. 2011-05 is not expected impact our future results of operations or financial position.

In December 2011, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update No. 2011-10 (“ASU 2011-10”), Property, Plant and Equipment (Topic 360): Derecognition of in Substance Real Estate—a Scope Clarification (a consensus of the FASB Emerging Issues Task Force). ASU 2011-10 clarifies when a parent (reporting entity) ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt, the reporting entity should apply the guidance for Real Estate Sale (Subtopic 360-20). The provisions of ASU 2011-10 are effective for public companies for fiscal years and interim periods within those years, beginning on or after June 15, 2012. When adopted, ASU 2011-10 is not expected to materially impact our consolidated financial statements.

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NOTE 3 – AVAILABLE–FOR-SALE SECURITIES – RELATED PARTIES

Organa

2009, the Company sold 50,000 shares resulting in a realized loss of $(780) and recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $5,138, which was recorded as other comprehensive income. During the year ended December 31, 2010, the Company received 700,300 restricted shares of Organa valued to $7,003 pursuant to a debt settlement and sold Nil Organa shares. The Company recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $2,541, which was recorded as other comprehensive income (loss). As a result, the carrying value of the available for sale shares of Organa is $4,504 as at December 31, 2010.

Legacy

Effective December 31, 2011, the Company recorded a $32,843 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares.

Available for sale securities – related parties include the following:

	December 31 ,		December 31,
	2011		2010
2,345,937 (2010-2,345,937) shares of Legacy Wine & Spirits	$	3,754	$	37,535
703,750 (2010- 703,750) shares of Organa Gardens International		1,407		4,504
	$	5,161	$	42,039

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NOTE 4 – INVESTMENTS IN INTANGIBLE ASSETS

On August 24, 2010, the Company signed an agreement with Global Terralene Inc. for the acquisition of all assets pertaining to Terralene Fuels. Under the terms of the agreement, the Company will issue 7,000,000 restricted common shares to Global Terralene Inc. in two phases. On November 30, 2010, the Company approved and issued 5,000,000 restricted common shares valued at $125,000 to Global Terralene Inc. The Company will issue a further 2,000,000 restricted common shares valued at $50,000 once certain documents outlined in the agreement are prepared and exchanged by both parties (issued February 2012). Terralene Fuel is a patented fuel alternative formulation that is the equivalent of 87 octane regular gasoline and utilizes renewable energy sources in 45% of its composition. Terralene’s unique fuel reduces greenhouse gas and other environmental damaging emissions and can be easily integrated into the existing fuel infrastructure. . During the year ended December 31, 2011, the Company capitalized $6,212 in patent work

Total Investments in Terralene Fuels costs at December 31, 2011 and 2010 total $131,212 and $125,000 respectively, and include the following assets:

Patents, trademarks, copyright

Formulas, reports, studies

Schematics, proprietary info

Website

Terralene brandname

The purchase was completd in 2012 and no preliminary allocation has been completed.

NOTE 5 – FILM PRODUCTION AND DEVELOPMENT COSTS

Film Production and development costs at December 31, 2011 are made up as follows:

	Gross Cost		Accumulated amortization		Writedown of film rights and related costs			Net Cost December 31, 2011		Net Cost December31, 2010

Acquired films and film rights	$	84,970	$	-		(84,970	)	$	-	$	1
Films in progress		5,793		-		(5,793	)		-		-

	$	90,763	$	-	$	(90,763	)	$	-	$	1

NOTE 6 – OTHER PROPERTIES

The Company has signed an Agreement dated March 28, 2008 with EnEco Industries Ltd. ("EnEco"), a waste management company that has been in operation for fifteen years, to form an alliance for a renewable energy entity, where Golden Spirit will take majority interest in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants designed by EnEco. These plants will be in strategically located areas diverting tons of garbage from landfills and drastically reducing greenhouse gas outputs. As of December 31, 2011, the Company is needing to finds partners to finance this project. As of December 31, 2011, the Company has spent $Nil on this project (2010 – $Nil)

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NOTE 7 – DEFERRED COMPENSATION

The Company has recorded as deferred compensation prepaid amounts for consulting and management services contracts paid for by issuance of shares of common stock as follows:

On November 18, 2009, the Company entered into an agreement with a consultant, for a eighteen month term, whereby the consultant provides consulting services to the Company (valued at $17,500) in exchange for 250,000 shares of the Company’s common stock. During the year ended December 31, 2010, a total of $4,378 has been expensed (December 31, 2010 - $11,664).

On November 18, 2009, the Company entered into an agreement with Palisades Financial Ltd. (“Palisades”), a private company controlled by a significant shareholder, with a two-year term, whereby Palisades provides investment-banking services to the Company (valued at $14,000) in exchange for 200,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $8,756 has been expensed (December 31, 2010 - $6,996).

On November 18, 2009 the Company entered into an agreement with Compte de Sierge Accomodative Corp. (“Compte”), a private company controlled by a significant shareholder, with a two-year term, whereby Compte provides investor relations services to the Company (valued at $17,500) in exchange for 250,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $4,378 has been expensed (December 31, 2010 - $11,664).

On May 15, 2010, the Company entered into an agreement with Domain Land Holdings Ltd. (“Domain”), a private company controlled by a significant shareholder, with a two-year term, whereby Domain provides investment-banking services to the Company (valued at $30,000) in exchange for 750,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $15,000 has been expensed (December 31, 2010 - $9,375).

On May 15, 2010, the Company entered into an agreement with 103244 Alberta Ltd. (“1063244”), a private company controlled by a significant shareholder, with a two-year term, whereby 1063244 provides investor relations services to the Company (valued at $30,000) in exchange for 750,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $15,000 has been expensed (December 31, 2010 - $9,375).

On October 1, 2011, the Company entered into an agreement with a consultant, for a two year term, whereby the consultant provides consulting services to the Company (valued at $10,000) in exchange for 5,000,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $1,250 has been expensed (December 31, 2010 - $Nil).

On October 1, 2011, the Company entered into an agreement with Palisades Financial Ltd. (“Palisades”), a private company controlled by a significant shareholder, with a two-year term, whereby Palisades provides investment-banking services to the Company (valued at $10,000) in exchange for 5,000,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $1,250 has been expensed (December 31, 2010 - $Nil).

On October 1, 2011 the Company entered into an agreement with Compte de Sierge Accomodative Corp. (“Compte”), a private company controlled by a significant shareholder, with a two-year term, whereby Compte provides investor relations services to the Company (valued at $10,000) in exchange for 5,000,000 restricted shares of the Company’s common stock. During the year ended December 31, 2011, a total of $1,250 has been expensed (December 31, 2010 - $Nil).

As at December 31, 2011, the unamortized portion of the deferred compensation totaled $37,500 (December 31, 2010 - $56,135).

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NOTE 8 – CAPITAL STOCK

The Company’s capitalization is 500,000,000 common shares with a par value of $0.0001 per share. No preferred shares have been authorized.

(1) 2011 Stock Transactions

During the year ended December 31, 2011, 15,000,000 restricted common shares were issued valued at $30,000 pursuant to deferred compensation contracts with related parties. See note 7.

(2) 2010 Stock Transactions

During the year ended December 31, 2010, 1,500,000 restricted common shares were issued valued at $60,000 pursuant to deferred compensation contracts with related parties. See note 8.

During the year ended December 31, 2010, 465,000 restricted common shares were issued valued at $14,950 to four individuals for advisory board and other services.

During the year ended December 31, 2010, 5,000,000 restricted common shares were issued valued at $125,000 pursuant to the acquisition of Terralene Fuels (see Note 4).

(3) 2011 Stock Options

On January 18, 2011, the Company filed a Registration Statement on Form S-8 to cover 12,000,000 shares of common stock to be granted pursuant to the Company’s 2011 Stock Incentive and Option Plan.

On December 23, 2011, the Company filed a Registration Statement on Form S-8 to cover 15,000,000 shares of common stock to be granted pursuant to the Company’s 2012 Stock Incentive and Option Plan.

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NOTE 8 – CAPITAL STOCK (continued)

The Company’s stock option activity is as follows:

	Number of options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life

Balance, December 31, 2009		3,002,517		$	0.20	2.67 years
Granted during 2010		14,516,667			-
Exercised during 2010		(14,516,667	)		-
Balance, December 31,2010		3,002,517			-
Granted during 2011		12,000,000			0.03
Exercised during 2011		(12,000,000	)
Balance, December 31, 2011		3,002,517		$	0.20	2.67 years

(4) 2010 Stock Options

On April 21, 2010, the Company filed a Registration Statement on Form S-8 to cover 10,000,000 shares of common stock to be granted pursuant to the Company’s 2010 Stock Incentive and Option Plan.

The Company’s stock option activity is as follows:

	Number of options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life

Balance, December 31, 2008		3,002,517		$	0.20	2.67 years
Granted during 2008		-			-
Exercised during 2008		-			-
Granted during 2009		3,900,000			-
Exercised during 2009		(3,900,000	)	$	0.03	2.67 years

Granted during 2010		14,516,667			-
Exercised during 2010		(14,516,667	)		0.03
Balance, December 31, 2010		3,002,517		$	0.09	2.67 years

NOTE 9 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2011, companies controlled by significant shareholders earned $48,635 (2010 - $49,074) pursuant to deferred compensation services contracts (refer to Note 7).

During the year ended December 31, 2011, the Company paid $7,243 (2010 -$11,617) to directors for management fees.

During the year ended December 31, 2011, the Company incurred expenses for office rent of $30,868 (2010 - $28,591) to a private company controlled by a significant shareholder.

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The following amounts are due to related parties at:

	December 31, 2011		December 31, 2010

Significant shareholders	$	62,606	$	129,755

All related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

As of August 1, 2010, the Company has leased 1250 sq. ft of office space from Holm Investments Ltd. at $2,500 per month for a period of 3 years.

NOTE 11 – INCOME TAXES

As of December 31, 2011, the Company had net operating loss carryforwards of approximately $17,988,000 that may be available to reduce future years' taxable income and will expire between the years 2012 - 2031. Availability of tax losses is subject to change of ownership limitations under Internal Revenue Code 382. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.

The actual income tax provisions differ from the expected amounts calculated by applying the federal income tax statutory rate to the Company’s loss before income taxes. The components of these differences are as follows:

	Year ended December 31, 2011			Year ended December 31, 2010


Loss before income taxes	$	(393,813	)	$	(399,390	)
Combined federal and state corporate tax rate		42.7	%		42.7	%

Expected tax expense (recovery)		(168,158	)		(170,540	)
Non-deductible stock based compensation		97,000			97,000
Change in valuation allowance		8,000			8,000

Income tax provision	$	-		$	-

The Company’s tax-effected deferred income tax assets and liabilities are estimated as follows:

	2011			2010

Non-capital loss carry forwards	$	7,273,000		$	7,273,000
Valuation allowance		(7,273,000	)		(7,273,000	)
Net deferred tax asset	$	-		$	-

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NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES

Cash paid during the years ended December 31, 2011 and 2010 for:	2011		2010

Interest	$	-	$	-

Income taxes	$	-	$	-

During the year ended December 31, 2011:

The Company issued 25,000 restricted common shares valued at $750 to a new director for his services and issued 250,000 restricted common shares valued at $7,500 to a consultant for his services in relation to the Terralene Fuels project.

The Company issued 15,000,000 restricted common shares were issued valued at $30,000 pursuant to deferred compensation contracts with related parties. See note 7.

During the year ended December 31, 2010:

The Company issued 1,500,000 restricted common shares with a fair value of $60,000 for prepaid consulting service agreements.

The Company issued 515,000 incentive stock options were granted and immediately exercised at $0.04 per share to satisfy debts related parties in the amount of $20,600, 5,610,000 incentive stock options were granted and immediately exercised at $0.02 per share to satisfy debts related parties in the amount of $112,200 and 5,341,667 incentive stock options were granted and immediately exercised at $0.03 per share to satisfy debts related parties in the amount of $160,250 and 3,050,000 for services at $91,500.

The Company issued 465,000 restricted common shares were issued valued at $14,950 to four individuals for advisory board and other services.

The Company issued 5,000,000 restricted common shares were issued valued at $125,000 pursuant to the acquisition of Terralene Fuels (see Note 4).

NOTE 13 – SUBSEQUENT EVENTS

In February, 2012, the Company issued a further 2,000,000 restricted common shares valued at $50,000 pursuant to its agreement with Global Terralene Inc.(See Note 4).

In February, 2012, The Company issued a total of 5,000,000 common shares pursuant to the exercise of options under the Company’s 2012 Stock Incentive and Option Plan at $0.0025 per share to satisfy debt to related parties in the amount of $12,500.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements with Terralene Fuels Corporation auditors since formation of the company that require disclosure pursuant to Item 304 of Regulation S-B.

ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Management's Report on Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a public company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”) including those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2011. In making this assessment, our management used the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management, with the participation of the Chief Executive and Chief Financial Officers, believes that, as of December 31, 2011, we did not maintain effective internal control over financial reporting due to the material weakness described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We identified the following material weakness in our assessment of the effectiveness of internal control over financial reporting:

We did not design and implement adequate controls related to the accounting of marketable securities, specifically in this instance, applying guidance to other than temporary decline in value of the marketable securities.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report

Code of Ethics

We intend to adopt a code of ethics in 2012 that applies to our principle executive officer, principal financial officer, principle accounting officer or controller, other persons performing similar functions. We intend to post the text of our code of ethics on our website in connection with our "Investor Relations" materials. In addition, we intend to promptly disclose (1) the nature of any amendment to our code of ethics that applies to our principle executive officer principal financial officer, principle accounting officer or controller, other persons performing similar functions (2) the nature of any wavier, including an implicit wavier, from a provision of our code of ethics that is granted to one of these specific officers, the name of such person who

is granted the waiver and the date of the waiver on our web site in the future.

We do not currently have a code of ethics as this is a new regulatory requirement and we are examining the various form and contents of other companies written code of ethics, discussing the merits and meaning of a code of ethics to determine the best form for our Company.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors. We are dependent on the efforts and abilities of certain of our senior management. The interruption of the services of key management could have a material adverse effect on our operations, profits and future development, if suitable replacements are not promptly obtained. We anticipate that we will enter into employment agreements with each of our key executives; however, no assurance can be given that each executive will remain with us during or after the term of his or her employment agreement. In addition, our success depends, in part, upon our ability to attract and retain other talented personnel. Although we believe that our relations with our personnel are good and that we will continue to be successful in attracting and retaining qualified personnel, there can be no assurance that we will be able to continue to do so. Our officers and directors will hold office until their resignation or removal.

Our directors and principal executive officers are as specified on the following table:

The chart above specifies Terralene Fuels Corporation current officers and directors.

All directors of the Company hold office until the next annual meeting or until their successors have been elected and qualified. All officers serve at the discretion of the Board of Directors.

There are no familial relationships between our officers and directors.

Section 16(a) Beneficial Ownership Reporting Compliance. Not all of our officers, directors, and principal shareholders have filed all reports required to be filed by those persons on, respectively, a Form 3 (Initial Statement of Beneficial Ownership of Securities), a Form 4 (Statement of Changes of Beneficial Ownership of Securities), or a Form 5 (Annual Statement of Beneficial Ownership of Securities).

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by us for the last three fiscal years ending December 31, 2011 for each or our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary (US$)		Bonus (US$)		Stock Awards (US$)		Option Awards (US$)		Non-Equity Incentive Plan Compensation (US$)		Nonqualified Deferred Compensation Earnings (US$)		All Other Compensation (US$)		Total (US$)
Jaclyn	2009		1,000		0		1,000		0		0		0		0		0
Cruz	2010		6,750		0		0		0		0		0		0		0
President	2011		4,000		0		0		0		0		0		0		0

Matt
Kelly
Director	2011		1,000		0		750		0		0		0		0		0

Sharon
Deutsch
Director	2011	1,500	0	0	0	0	0	0	0

We have no employment agreements with any of our director and sole officer. We do not contemplate entering into any employment agreements until such time as we begin profitable operations. There is no assurance that we will ever generate revenues from our operations.

The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer.

There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.

Stock-based Compensation . During the year ended December 31, 2011, $Nil (2010-$Nil) in stock-based compensation was recorded in our financial statements. Stock-based compensation is an estimate of the intrinsic value placed in respect to stock options granted to officers, directors, employees and an estimate of the fair value of stock options granted to consultants using the Black-Scholes option pricing model. We do not expect further stock-based compensation in 2011.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2011, by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group.

Title of Class	Beneficial Owner	Beneficial Owner		Common Stock

Jaclyn Cruz	P.O. Box 63		25,000		0.00	%
President/.Director/CEO	Farmingville, New York
	11738

Sharon Deutsch	35 South Ocean Avenue		-		0.00	%
Secretary /Director /CFO	Patchogue, New York
	11772

All directors and Officers as a group			25,000		0.00	%

Security Ownership by Management. As above, at December 31, 2010, our directors, Jaclyn Cruz owned 25,000 shares and Sharon Deutsch owned Nil shares for and aggregate total of 25,000 shares or 0.0001% of the common stock outstanding.

Changes in Control. Our management is not aware of any arrangements which may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

During the year ended December 31, 2011, companies controlled by significant shareholders earned $48,635 (2010 - $49,074) pursuant to deferred compensation services contracts

During the year ended December 31, 2011, the Company paid $7,243 (2010 -$11,617) to directors for management fees.

During the year ended December 31, 2011, the Company incurred expenses for office rent of $30,868 (2010 - $28,591) to a private company controlled by a significant shareholder.

The following amounts are due to related parties at:

	December 31, 2011		December 31, 2010

Significant shareholders	$	62,606	$	129,755

All related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

1. Audit Fees: Aggregate fees billed for each of the last two (2) fiscal years for professional services rendered by the principal accountant for the audit of the annual financial statements and review of financial statements included on Form 10-K:

2010: $19,100

2011: $19,100

2. Audit-Related Fees: Aggregate fees billed in each of the last two (2) fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements and are not reported previously.

2010: $0

2011: $0

Tax Fees: Aggregate fees billed in each of the last two (2) fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

2010: $0

2011: $0

4. All Other Fees: Aggregate fees billed in each of the last two (2) fiscal years for products and services provided by the principal accountant, other than the services previously reported.

2010: $0

2011: $0

5. Audit Committee Pre-Approval Procedures. The Board of Directors has not, to date, appointed an Audit Committee.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit 31.1 -		Section 906 Certification of Periodic Report of the Chief Executive Officer

Exhibit 31.2 -		Section 906 Certification of Periodic Report of the Chief Financial Officer

Exhibit 32.1 -		Section 302 Certification of Periodic Report of the Chief Executive Officer

Exhibit 32.2 -		Section 302 Certification of Periodic Report of the Chief Financial Officer

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

b) Form 8-K:

8-K filed February 3, 2012 with respect to a Change in Directors.

8-K filed December 20, 2011 with respect to a Name Change

8-K filed June 28, 2011 with respect to a change in Directors.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 16, 2012.

	Terralene Fuels Corporation
	a Delaware corporation

	By:	/s/ Jaclyn Cruz
		Jaclyn Cruz
	Its:	President and Director

In accordance with the Exchange Act, this amended report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Jaclyn Cruz		Date: April 16, 2012
Jaclyn Cruz,
President and Director

/s/ Matt Kelly		Date: April 16, 2012
Matt Kelly,
Secretary & Treasurer and Director