U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-QSB


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2004





OR





[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ________ to ________








Radale Imports, Inc.


(Exact name of registrant as specified in its charter)





California
000-49708
33-0684067(state of
(Commission File Number)
(IRS Employerincorporation)

I.D. Number)





P. O. Box 1990


Rancho Santa Fe, CA 92067


858-756-3011


(Address and telephone number of registrant's principal


executive offices and principal place of business)





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past twelve 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[ ]





As of August 9, 2004, there were 2,138,150 shares of the Registrant's Common Stock, par value $0.001 per share, outstanding.





Transitional Small Business Disclosure Format (check one): Yes [ ] No[X]











TABLE OF CONTENTS





PagePART I - FINANCIAL INFORMATION

3Item 1. Financial Statements

3Item 2. Managements Discussion and Analysis or Plan of Operation

9Item 3. Controls and Procedures

10PART II - OTHER INFORMATION

10Item 1. Legal Proceedings

10Item 2. Changes in Securities

11Item 3. Defaults Upon Senior Securities

11Item 4. Submission of Matters to a Vote of Security Holders

11Item 5. Other Information

11Item 6. Exhibits and Reports on Form 8-K

11SIGNATURES

12





2





PART I - FINANCIAL INFORMATION





Item 1.Financial Statements





PAGECONDENSED BALANCE SHEETSJUNE 30, 2004 (UNAUDITED) AND MARCH 31, 2004


4CONDENSED STATEMENTS OF OPERATIONSTHREE MONTHS ENDED JUNE 30, 2004 AND 2003 AND PERIODFROM AUGUST 18, 1995 (DATE OF INCEPTION)THROUGH JUNE 30, 2004 (UNAUDITED)


5CONDENSED STATEMENTS OF CASH FLOWSTHREE MONTHS ENDED JUNE 30, 2004 AND 2003 AND PERIODFROM AUGUST 18, 1995 (DATE OF INCEPTION)THROUGH JUNE 30, 2004 (UNAUDITED)


6NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


7








3





RADALE IMPORTS, INC.


**(A Development Stage Company)**


CONDENSED BALANCE SHEETS


JUNE 30, 2004 (UNAUDITED) AND MARCH 31, 2004





June 30,


March 31,ASSETS


2004


2004(Unaudited)Current assets - cash

$
570

$
288Related party receivables, net of reservefor doubtful accounts of $227,286


-


-Total assets

$
570

$
288LIABILITIES AND STOCKHOLDERS DEFICIENCYCurrent liabilities:Accounts payable

$
31,133

$
29,806Borrowings under line of credit


32,837


32,829Related party payables


815,274


793,944Total liabilities


879,244


856,579CommitmentStockholders deficiency:Preferred stock, $.001 par value; 10,000,000 sharesauthorized; none issued


-


-Common stock, $.001 par value; 40,000,000 sharesauthorized; 2,138,150 shares issued and outstanding


2,138


2,138Additional paid-in capital


168,853


168,853Deficit accumulated during the development stage


(1,049,665
)

(1,027,282
)Total stockholders deficiency


(878,674
)

(856,291
)Total liabilities and stockholders deficiency

$
570

$
288  See Notes to Unaudited Condensed Financial Statements.





4





RADALE IMPORTS, INC.
 **(A Development Stage Company)**
 CONDENSED STATEMENTS OF OPERATIONS
 THREE MONTHS ENDED JUNE 30, 2004 AND 2003
 AND PERIOD FROM AUGUST 18, 1995 (DATE OF INCEPTION)
 THROUGH JUNE 30, 2004
 (Unaudited)
 
 Three Months Ended

CumulativeJune 30,

from2004


2003

InceptionOperating expenses:General and administrative

$
2,287

$
8,090

723,259Depreciation and amortization







7,698Totals


2,287


8,090

730,957Loss from operations


(2,287
)

(8,090
)
(730,957
)Other (income) expense:Interest income







(50,836
)Interest expense


20,096


17,521

369,544Totals


20,096


17,521

318,708Net loss

$
(22,383
)
$
(25,611
)
(1,049,665
)Net loss per common share - basic

$
(.01
)
$
(.01
)Basic weighted average number ofcommon shares


2,138,150


2,138,150


See Notes to Unaudited Condensed Financial Statements.

5





**RADALE IMPORTS, INC.**
 **(A Development Stage Company)**
 **CONDENSED STATEMENTS OF CASH FLOWS**
 **THREE MONTHS ENDED JUNE 30, 2004 AND 2003 AND**
 **PERIOD FROM AUGUST 18, 1995 (DATE OF INCEPTION)**
 **THROUGH JUNE 30, 2004**
 **(Unaudited)**
 
 Three Months Ended


CumulativeJune 30,from**2004**


2003


InceptionOperating activities:Net loss

**$**
**(22,383**
**)**
$
(25,611
)
$
(1,049,665
)Adjustments to reconcile net loss to net cashused in operating activities:Provision for uncollectible related partyreceivables including accrued interest








227,286Depreciation and amortization








7,698Common stock issued for services








21,191Changes in operating assets and liabilities:Other assets








(1,105
)Accounts payable


**1,327**


424


31,133Interest receivable from related parties








(50,836
)Interest payable to related parties


**19,330**


16,954


359,610Net cash used in operating activities


**(1,726**
**)**

(8,233
)

(454,688
)Investing activities:Purchase of property and equipment








(6,593
)Advances to related parties








(176,450
)Net cash used in investing activities








(183,043
)Financing activities:Net proceeds from loans payable to related party


**2,000**


8,000


455,664Net proceeds from (payment on) line of credit


**8**


(185
)

32,837Proceeds from issuance of common stock








149,800Net cash provided by financing activities


**2,008**


7,815


638,301Net increase (decrease) in cash


**282**
****

(418
)

570Cash, beginning of period


**288**


439


-Cash, end of period

**$**
**570**

$
21

$
570


See Notes to Unaudited Condensed Financial Statements.

6





RADALE IMPORTS, INC.


(A Development Stage Company)





NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS




Note 1 - Unaudited interim financial statements:

The accompanying unaudited condensed financial statements of Radale Imports, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending March 31, 2005. The unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in the Companys March 31, 2004 Annual Report on Form 10-KSB.








Note 2 - Business organization and policies:


Use of estimates:


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates.





Earnings (loss) per share:


The Company follows the provisions of Statement of Financial Accounting Standards No. 128, Earnings per Share("SFAS 128").





Basic earnings (loss) per common share is calculated by dividing net income or loss applicable to common shares by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per common share is similar to that of basic earnings per common share, except that dilutive earnings per common share reflects the amount of earnings for the period available to each share of common stock outstanding during the reporting period, while giving effect to all dilutive potential common shares that were outstanding during the period such as common shares that could result from the potential exercise or conversion of securities and debt into common stock. There are potentially no dilutive common shares outstanding for the three months ended June 30, 2004 and 2003.


7








RADALE IMPORTS, INC.
 (A Development Stage Company)
 
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS








Note 3 - Basis of presentation:


The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern and the realization of the Companys assets and the satisfaction of its liabilities in the normal course of business. As of June 30, 2004, the Company has an accumulated deficit of $1,049,665, and a stockholders and working capital deficiency of $878,674. Management plans to obtain the additional funds to enable the Company to continue as a going concern through the sale of equity securities to private investors pursuant to a private placement memorandum. Due to the Companys recurring losses and stockholders deficiency, there can be no assurance that the Company will be able to obtain the additional funds, which may impact the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue its operations as a going concern.








Note 4 - Related party receivables, net:


Related party receivables of $227,286 as of June 30, 2004 include accrued interest of $50,836. The receivables arose from periodic borrowings from the Company by stockholders and officers. All unpaid amounts were due no later than March 31, 2001, and are currently in default. The repayment of the principal and all accrued interest has been guaranteed by the Companys principal stockholder. As a consideration to the stockholder for the guarantee, the debtors pledged their stock to the principal stockholder. Currently, the Company has not commenced collection of the receivables. Because of the uncertainty about the collectability of the receivables, no interest income was accrued in the three month periods ended June 30, 2004 and 2003. The total receivables including accrued interest of $227,286 have been fully reserved through a provision charged to operations in the year ended March 31, 2001.








Note 5 - Related party payables:


Related party payables as of June 30, 2004 totaled $815,274 which includes notes payable of $455,664 and accrued interest of $359,610. The notes bear interest with rates ranging from 5% to 10% and are currently in default.





8











Item 2.Management's Discussion and Analysis or Plan of Operation





The following discussion and analysis should be read in conjunction with the financial statements and the accompanying notes thereto for the three-month period ended June 30, 2004 and is qualified in its entirety by the foregoing and by more detailed financial information appearing elsewhere. See "Item 1. Financial Statements." The discussion includes managements expectations for the future.





Such expressions of expectation are not historical in nature and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual future results to differ materially from those expressed in any forward-looking statement. Such risks and uncertainties are discussed in the Risk Factors section of our Annual Report on Form 10-KSB. Copies of that filing may be obtained by contacting Anne Ash of our company at P. O. Box 1990, Rancho Santa Fe, CA 92067, telephone (858) 756-3011.





Plan of Operation for the Next Twelve Months





Our current business plan is to seek, investigate and, if warranted, acquire one or more properties or businesses, and to pursue other related activities intended to enhance shareholder value. The acquisition of a business opportunity may be made by purchase, merger, exchange of stock, or otherwise, and may encompass assets or a business entity, such as a corporation, joint venture or partnership. We have no capital, and it is unlikely that we will be able to take advantage of more than one such business opportunity. We intend to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings.





We are in the development stage and, since inception, have experienced significant liquidity problems and have no capital resources or stockholders equity. We have current assets in the form of cash of only $570, total assets of $570 and current liabilities of $879,244.





We propose to carry out our plan of business as discussed above. We cannot predict to what extent its lack of liquidity and capital resources will impair the consummation of a business combination or whether we will incur further operating losses through any business entity which we may eventually acquire.





For the current fiscal year, we anticipate incurring a loss as a result of legal and accounting expenses, expenses associated with registration under the Securities Exchange Act of 1934, and expenses associated with locating and evaluating acquisition candidates. We anticipate that until a business combination is completed with an acquisition candidate, it will not generate revenues other than interest income, and may continue to operate at a loss after completing a business combination, depending upon the performance of the acquired business.





9





Need for Additional Financing





We do not have capital sufficient to meet our cash needs during the next twelve months, including the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934. We will have to seek loans or equity placements to cover such cash needs. Due to our recurring losses and stockholders deficiency, there can be no assurance that we will be able to obtain the additional funds, which may impact our ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue operations as a going concern. In the event we are able to complete a business combination during this period, the lack of existing capital may be a sufficient impediment to prevent us from accomplishing the goal of completing a business combination. There is no assurance, however, that without funds we will ultimately be able to complete a business combination. Once a business combination is completed, our needs for additional financing are likely to increase substantially.





No commitments to provide additional funds have been made by management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses as they may be incurred.





Irrespective of whether our cash assets prove to be inadequate to meet our operational needs, we might seek to compensate providers of services by issuances of stock in lieu of cash.





Item 3.Controls and Procedures





Evaluation of disclosure controls and procedures. The Companys management, with the participation of the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures as of June 30, 2004. Based on this evaluation, the Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective for gathering, analyzing and disclosing the information the Company is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in the SECs rules and forms.





Changes in internal controls. There were no significant changes in internal controls or other factors that could significantly affect our internal controls subsequent to the date of our evaluation.








PART II - OTHER INFORMATION





Item 1.Legal Proceedings





We are not, and none of our property is, a party to any pending legal proceedings, and no such proceedings are known to be contemplated.





No director, officer or affiliate of the company, and no owner of record or beneficial owner of more than 5.0% of the securities of the company, or any associate of any such director, officer or security holder is a party adverse to the company or has a material interest adverse to the Company in reference to any litigation.





10





Item 2.Changes in Securities





None.





Item 3.Defaults Upon Senior Securities





None.





Item 4.Submission of Matters to a Vote of Security Holders





None.





Item 5.Other Information





None.





Item 6.Exhibits and Reports on Form 8-K





(a)Exhibits





The following exhibits are filed, by incorporation by reference, as part of this Form 10-QSB:











ExhibitNumber
Description of Exhibit3

Amended and Restated Articles of Incorporation*3.1

Bylaws*14

Code of Ethics for CEO and Senior Financial Officers**31

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section302 of the Sarbanes-Oxley Act of 2002.31.1

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.1

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 11





*Previously filed with Form 10-SB Commission file number 000-49708; incorporated herein.





**Previously filed with Form 10-KSB FYE 03-31-04 Commission file number 000-49708; incorporated herein.





(b)Forms 8-K





None





SIGNATURES





Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.





Radale Imports, Inc.****Date: August 16, 2004
By:
/s/ *Lee D. Dodson*Lee D. DodsonTitle Chief Executive Officer  12


RADALE IMPORTS, INC.





COMMISSION FILE NO. 000-49708








INDEX TO EXHIBITS





FORM 10-QSB


FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004











The following exhibits are filed, by incorporation by reference, as part of this Form 10-QSB:





ExhibitNumber
Description of Exhibit3

Amended and Restated Articles of Incorporation*3.1

Bylaws*14

Code of Ethics for CEO and Senior Financial Officers**31

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.1

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.1

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*Previously filed with Form 10-SB Commission file number 000-49708; incorporated herein.





**Previously filed with Form 10-KSB FYE 03-31-04 Commission file number 000-49708; incorporated herein.





13