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<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>UNITED STATES</B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Washington, D.C. 20549</B></P>
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<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>FORM 8-K</B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>CURRENT REPORT</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>August 28, 2008 (August 22, 2008)</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>Date of Report (Date of earliest event reported)</P>
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<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>TERRA NOSTRA RESOURCES CORP.</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(Exact name of registrant as specified in its charter)</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<TABLE cellspacing=0><TR><TD style="border:1 solid #000000" valign=top width=192><P style="margin:0pt; font-family:Times New Roman" align=center><B>Nevada</B></P>
</TD><TD style="border-top:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=192><P style="margin:0pt; font-family:Times New Roman" align=center><B>000-49631</B></P>
</TD><TD style="border-top:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=192><P style="margin:0pt; font-family:Times New Roman" align=center><B>86-0875500</B></P>
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<TR><TD style="border-left:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=192><P style="margin:0pt; font-family:Times New Roman" align=center>(State or other jurisdiction</P>
<P style="margin:0pt; font-family:Times New Roman" align=center>of incorporation)</P>
</TD><TD style="border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=192><P style="margin:0pt; font-family:Times New Roman" align=center>(Commission File No.)</P>
</TD><TD style="border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=192><P style="margin:0pt; font-family:Times New Roman" align=center>(IRS Employer</P>
<P style="margin:0pt; font-family:Times New Roman" align=center>Identification No.)</P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>790 East Colorado Blvd., 9<SUP>th</SUP> Floor</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>Pasadena, CA 91101</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>(Address of principal executive offices, including zip code)</P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center>Registrant's telephone number, including area code: <B>(626) 796-0088</B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=justify>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):</P>
<P style="margin:0pt; font-family:Wingdings" align=justify><I>&nbsp;</I></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings" align=justify><I>o</I></P>
<P style="margin:0pt; text-indent:36pt; font-family:Wingdings" align=justify><I></I><FONT FACE="Times New Roman">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings" align=justify><I>o</I></P>
<P style="margin:0pt; text-indent:36pt; font-family:Wingdings" align=justify><I></I><FONT FACE="Times New Roman">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings" align=justify><I>o</I></P>
<P style="margin:0pt; text-indent:36pt; font-family:Wingdings" align=justify><I></I><FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Wingdings" align=justify><I>o</I></P>
<P style="margin:0pt; text-indent:36pt; font-family:Wingdings" align=justify><I></I><FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></P>
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<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Times New Roman"><B>ITEM 2.04</B></P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman"><B>Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance-Sheet Arrangement.</B></P>
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<P style="margin:0pt; font-family:Times New Roman"><B><I>Background</I></B></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">As previously reported by Terra Nostra Resources Corp. (&#147;Terra Nostra&#148; or the &#147;Company&#148;) on Current Report on Form 8-K, dated September 5, &nbsp;2007, as amended from time to time to report subsequent closings, the Company conducted an offering (the &#147;Offering&#148;) of its 10% Senior Secured Promissory Notes (&#147;Notes&#148;) and Common Stock Purchase Warrants (&#147;Warrants&#148;). From August 2007 through December 2007, the Company sold $24,925,000 in aggregate principal face amount of Notes pursuant to the Offering to certain &#147;accredited investors.&#148; The Maturity Date of the Notes, as defined in the Notes, is nine months from the issuance date.</P>
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<P style="margin:0pt; font-family:Times New Roman" align=justify><B><I>Defaults</I></B></P>
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<P style="margin:0pt; font-family:Times New Roman" align=justify>On August 21, 2008, the Company was unable to repay the principal and interest due under certain Notes issued by the Company pursuant to the Offering. As a result of the such default, the Company&#146;s payment obligations under all defaulted Notes were accelerated and became immediately due and payable. Accordingly, as of August 22, 2008, the Company owed these noteholders an aggregate of $21,040,056.75<B> </B>under the Notes, including principal and interest at the Default Rate (as defined below). Further, as a result of the Default, the defaulted Notes shall now bear interest at a rate equal to eighteen percent (18%), retroactive to the issuance date of the Notes on the unpaid principal amount of the Notes outstanding through the date on which such event of default ceases to exist (&#147;Default Rate&#148;). Moreover, the noteholders &nbsp;may pursue all other available remedies as provided for in the &nbsp;Notes and, as &nbsp;secured creditors, the noteholders may be entitled to exercise their respective rights to take possession of their pro rata share of the Company&#146;s common stock which was pledged by the Company&#146;s Chief Executive Officer, James Po, pursuant to that certain Pledge Agreement.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>The Company is currently working to address the issues presented by its outstanding obligations. </P>
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<P style="margin:0pt; font-family:Times" align=center>2</P>
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<P style="margin:0pt; font-family:Times New Roman" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.</P>
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<TABLE cellspacing=0><TR><TD style="border:1 solid #000000" valign=top width=334.533>&nbsp;</TD><TD style="border-top:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=21.467>&nbsp;</TD><TD style="border-top:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=35.733>&nbsp;</TD><TD style="border-top:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=7.133>&nbsp;</TD><TD style="border-top:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=320.933><P style="margin:0pt; font-family:Times New Roman">TERRA NOSTRA RESOURCES CORP.</P>
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<TR><TD style="border-left:1 solid #000000; border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=334.533><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
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<P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
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<P style="margin:0pt; font-family:Times New Roman">By:</P>
</TD><TD style="border-right:1 solid #000000; border-bottom:1 solid #000000" valign=top width=7.133><P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
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<P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:11pt; border-bottom:0.5pt solid #000000">/s/Sun Liu James Po<U> </U></P>
<P style="margin:0pt; font-family:Times New Roman">Chief Executive Officer</P>
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<P style="margin:0pt; font-family:Times New Roman">August 28, 2008</P>
<P style="margin:0pt; font-family:Times" align=center>3</P>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 28, 2008 (August 22, 2008)
Date of Report (Date of earliest event reported)
TERRA NOSTRA RESOURCES CORP.
(Exact name of registrant as specified in its charter)
Nevada
000-49631
86-0875500
(State or other jurisdiction
of incorporation)
(Commission File No.)
(IRS Employer
Identification No.)
790 East Colorado Blvd., 9
th
Floor
Pasadena, CA 91101
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code:
(626) 796-0088
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.04
Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance-Sheet Arrangement.
Background
As previously reported by Terra Nostra Resources Corp. ("Terra Nostra" or the "Company") on Current Report on Form 8-K, dated September 5,  2007, as amended from time to time to report subsequent closings, the Company conducted an offering (the "Offering") of its 10% Senior Secured Promissory Notes ("Notes") and Common Stock Purchase Warrants ("Warrants"). From August 2007 through December 2007, the Company sold $24,925,000 in aggregate principal face amount of Notes pursuant to the Offering to certain "accredited investors." The Maturity Date of the Notes, as defined in the Notes, is nine months from the issuance date.
Defaults
On August 21, 2008, the Company was unable to repay the principal and interest due under certain Notes issued by the Company pursuant to the Offering. As a result of the such default, the Company's payment obligations under all defaulted Notes were accelerated and became immediately due and payable. Accordingly, as of August 22, 2008, the Company owed these noteholders an aggregate of $21,040,056.75
under the Notes, including principal and interest at the Default Rate (as defined below). Further, as a result of the Default, the defaulted Notes shall now bear interest at a rate equal to eighteen percent (18%), retroactive to the issuance date of the Notes on the unpaid principal amount of the Notes outstanding through the date on which such event of default ceases to exist ("Default Rate"). Moreover, the noteholders  may pursue all other available remedies as provided for in the  Notes and, as  secured creditors, the noteholders may be entitled to exercise their respective rights to take possession of their pro rata share of the Company's common stock which was pledged by the Company's Chief Executive Officer, James Po, pursuant to that certain Pledge Agreement.
The Company is currently working to address the issues presented by its outstanding obligations.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.
TERRA NOSTRA RESOURCES CORP.
By:
/s/Sun Liu James Po
Chief Executive Officer
August 28, 2008
3