Edgar Filing: PALAL MINING CORP

PALAL MINING CORPORATION FORM 10Q

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10QSB

[X]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001
	OR
[ ]	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from to

COMMISSION FILE NUMBER 000-33193

PALAL MINING CORPORATION
(Exact name of registrant as specified in its charter)

NEVADA	88-0435904
(State of other jurisdiction	(IRS Employer Identification
of incorporation or organization)	Number)

1040 West Georgia
Suite 1160
Vancouver, British Columbia
Canada V6E 4H1
(Address of principal executive offices)

(604) 605-0885
(Registrant's telephone number, including area code)

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.

Yes [ x ] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of December 31, 2001: 30,299,250

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PART I.
ITEM 1. - Financial Statements

PALAL MINING CORPORATION (An Exploration Stage Company) BALANCE SHEETS
				December 31, 2001 (Unaudited)		June 30, 2001
ASSETS
	CURRENT ASSETS
		Cash		$	2,044	$	10,231
			Total Current Assets		2,044		10,231
	PROPERTY AND EQUIPMENT
		Office equipment			1,595		1,595
		Less: accumulated depreciation			(360)		(196)
			Total Property and Equipment		1,235		1,399
	OTHER ASSETS
		Deposits			411		411
			Total Other Assets		411		411
		TOTAL ASSETS		$	3,690 ====================	$	12,041 =================

LIABILITIES & STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES
		Accounts payable		$	1,695	$	-
		Related party payable			-		770
			Total Current Liabilities		1,695		770
	COMMITMENTS AND CONTINGENCIES				-		-

	STOCKHOLDERS' EQUITY
		Common stock, 100,000,000 shares authorized, $0.00001 par value; 30,299,250 shares issued and outstanding			303		303
		Additional paid-in-capital			380,924		380,924
		Deficit accumulated during exploration stage			(379,232)		(369,956)
		TOTAL STOCKHOLDERS' EQUITY			1,995		11,291

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	3,690 ====================	$	12,061 =================

See notes to interim financial statements

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PALAL MINING CORPORATION (An Exploration Stage Company) STATEMENTS OF OPERATIONS
											Period from September 2, 1999 (Inception) to December 31, 2001 (Unaudited)
			Three Months Ended December 31,				Six Months Ended December 31,
			Three Months Ended December 31,				Six Months Ended December 31,
			2001 (Unaudited)		2000 (Unaudited)		2001 (Unaudited)		2000 (Unaudited)
REVENUES			$	-	$	-	$	-	$	-	$	-
EXPENSES
	Consulting services provided by directors			-		-		-		-		273,586
	Rent			-		2,377		-		3,585		6,788
	General and administrative expense			607		6,088		632		10,173		14,980
	Legal and accounting			2,400		15,801		8,412		20,054		61,035
	Travel			-		12,276		-		13,579		14,786
	Consulting			-		-		-		-		3,000
	Depreciation			82		25		164		25		360
	Miscellaneous			-		-		-		-		125
	Stock Transfer expenses			25		-		68		-		3,025
	Mining exploration			-		-		-		-		1,241
		TOTAL EXPENSES		3,114		36,567		9,276		47,416		378,926
LOSS BEFORE INCOME TAXES				(3,114)		(36,567)		(9,276)		(47,416)		(378,926)

OTHER EXPENSES
	Loss on impairment of assets			-		-		-		-		(64)
INCOME TAXES				-		-		-		-		-
NET LOSS			$	(3,144) ============	$	(36,567) ==============	$	(9,276) ============	$	(47,416) ============	$	(378,990) ============
NET LOSS PER COMMON SHARE, BASIC AND DILUTED			$	NIL ============	$	(0.01) ==============	$	NIL ============	$	(0.01) ============	$	(0.03) ============
WEIGHTED AVERAGE NUMBER OF COMMON STOCK SHARES OUTSTANDING, BASIC AND DILUTED				30,299,250 ============		6,033,404 ==============		30,299,250 ============		5,545,724 ============		13,253,422 ============

See notes to interim financial statements

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PALAL MINING CORPORATION (An Exploration Stage Company) STATEMENT OF SHAREHOLDERS' EQUITY
						Deficit Accumulated during the Exploration Stage
	Common Stock			Additional Paid-in Capital
	Common Stock							Total Stockholders' Equity
	Number of Shares	Amount						Total Stockholders' Equity
Issuance of common stock for mining claims and executive compensation at $0.055 per share	5,000,000	$	50	$	274,950	$	-	$	275,000

Net loss for the period ending June 30, 2000	-		-		-		(298,263)		(298,263)

Balance, June 30, 2000	5,000,000		50		274,950		(298,263)		(23,263)

Sale of common stock at $0.10 per share	1,059,850		11		105,974		-		105,985

Issuance of common stock for four- for-one stock dividend at par value	24,239,400		242		-		(242)		-

Net loss for the year ended June 30, 2001	-		-		-		(71,451)		(71,451)

Balance, June 30, 2001	30,299,250		303		380,924		(369,956)		11,271

Net loss for the six months ended December 31, 2001	-		-		-		(9,276)		(9,276)

Balance, December 31, 2001 (Unaudited)	30,299,250 ============	$	303 ============	$	380,924 ============	$	(379,232) ============	$	1,995 ============

See notes to interim financial statements

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PALAL MINING CORPORATION (An Exploration Stage Company) STATEMENTS OF CASH FLOWS
								Period from September 2, 1999 (Inception) to December 31, 2001 (Unaudited)
				Six Months Ended December 31,
				2001 (Unaudited)		2000 (Unaudited)
				2001 (Unaudited)		2000 (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$	(9,276)	$	(47,416)	$	(378,990)
	Adjustments to reconcile net loss to net cash used by operating activities:
		Depreciation			164		25		360
		Loss on impairment of assets			-		-		64
		Payment of expenses from issuance of stock			-		-		274,804
		Net change in:
			Deposits		-		-		(411)
			Accounts payable		1,695		(120)		1,695
			Loan from related party		(770)		(20,454)		-
Net cash provided by operating activities					(8,187)		(67,965)		(102,478)
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchase of equipment				-		(1,595)		(1,595)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from sales of stock				-		105,985		105,985
	Proceeds from advances				-		-		132
Net cash provided by financing activities					-		105,985		106,117
Increase in cash					(8,187)		36,425		2,044
Cash, beginning of period					10,231		56		-
Cash, end of period				$	2,044 ================	$	36,481 ================	$	2,044 ================
SUPPLEMENTAL CASH FLOW DISCLOSURES:
	Interest paid			$	- ================	$	- ================	$	- ================
	Income taxes paid			$	- ================	$	- ================	$	- ================
NON-CASH TRANSACTIONS:
	Stock issued in payment of expenses			$	-	$	-	$	274,804
	Stock issued in payment of advances			$	-	$	-	$	132
	Stock issued in payment of mining claims			$	-	$	-	$	64
	Stock issued for stock dividend			$	-	$	-	$	242

See notes to interim financial statements

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PALAL MINING CORPORATION
(An Exploration Stage Company)
December 31, 2001

NOTES TO INTERIM FINANCIAL STATEMENTS
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1. BASIS OF PRESENTATION

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the year ended June 30, 2001. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.

Operating results for the three and six month periods ended December 31, 2001 are not necessarily indicative of the results that may be expected for the year ending June 30, 2002.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR OPERATIONS

Financial Condition, Liquidity and Capital Resources

Since inception on September 2, 1999, our Company has been engaged in exploration and acquisition of mineral properties. Our Company's principal capital resources have been acquired through issuance of common stock and from shareholder loans.

At December 31, 2001, there was positive working capital of $349 compared to $9,461 at June 30, 2001. This change is primarily the result of payment of professional expenses.

At December 31, 2001, our Company's total assets of $3,690 consisted of mainly cash and office equipment. This compares with our Company's total assets at June 30 of $12,041, also mainly cash.

At December 31, 2001, our Company's total liabilities rose to $1,695 from $770 at June 30, 2001, primarily reflecting a build-up of accounts payable.

Our Company has not had revenues from inception. Although there is insufficient capital to fully explore and develop its mineral properties, our Company expects to survive and exploit its resources primarily with funding from sales of its securities and, as necessary, from shareholder loans.

Our Company has no long-term debt and does not regard long-term borrowing as a good, prospective source of financing.

Results of Operations

Our Company posted a loss of $9,276 for the six months ended December 31, 2001. The principal component of the loss was professional expenses.

Operating expenses for the six months ending December 31, 2001 were also $9,276 down from $47,416 in the comparable half year ending December 31, 2000, due to sharp reductions in all categories of expense.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 28th day of January, 2002.

PALAL MINING CORPORATION
(Registrant)
/s/ Hugh Grenfal
Hugh Grenfal, President, Treasurer, Principal
Accounting Officer and a member of the Board
Of Directors