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 December 31, 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
(state of
incorporation)
000-49708
(Commission File Number)
33-0684067
(IRS Employer
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 February 17, 2005, 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]





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**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 6.Exhibits and Reports on Form 8-K
11SIGNATURES
12








2




**PART I - FINANCIAL INFORMATION**




**Item 1.** **Financial Statements**





PAGECONDENSED BALANCE SHEETSDECEMBER 31, 2004 (UNAUDITED) AND MARCH 31, 2004
4CONDENSED STATEMENTS OF OPERATIONSTHREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003AND PERIOD FROM AUGUST 18, 1995 (DATE OF INCEPTION)THROUGH DECEMBER 31, 2004 (UNAUDITED)
5CONDENSED STATEMENTS OF CASH FLOWSNINE MONTHS ENDED DECEMBER 31, 2004 AND 2003 AND PERIODFROM AUGUST 18, 1995 (DATE OF INCEPTION)THROUGH DECEMBER 31, 2004 (UNAUDITED)
6NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
7-8










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RADALE IMPORTS, INC.


(A Development Stage Company)





**CONDENSED BALANCE SHEETS****DECEMBER 31, 2004 (Unaudited) AND MARCH 31, 2004**December 31,

March 31,ASSETS

2004

2004(Unaudited)Current assets - cash

$
1,403

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


-


-Total assets

$
1,403

$
288LIABILITIES AND STOCKHOLDERS DEFICIENCYCurrent liabilities:Accounts payable

$
31,741

$
29,806Borrowings under line of credit


32,460


32,829Related party payables


882,209


793,944Total liabilities


946,410


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


(1,115,998
)

(1,027,282
)Total stockholders deficiency


(945,007
)

(856,291
)Total liabilities and stockholders deficiency

$
1,403

$
288







See Notes to Unaudited Condensed Financial Statements.4








RADALE IMPORTS, INC.


(A Development Stage Company)





**CONDENSED STATEMENTS OF OPERATIONS****THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003****AND PERIOD FROM AUGUST 18, 1995 (DATE OF INCEPTION)****THROUGH DECEMBER 31, 2004****(Unaudited)**Three Months Ended

Nine Months Ended

CumulativeDecember 31,

December 31,

from2004

2003

2004

2003

InceptionOperating expenses:General and administrative

$
4,653

$
4,476

$
25,603

$
15,223

$
746,577Depreciation and amortization














7,698Totals


4,653


4,476


25,603


15,223


754,275Loss from operations


(4,653
)

(4,476
)

(25,603
)

(15,223
)

(754,275
)Other (income) expense:Interest income














(50,836
)Interest expense


21,795


19,275


63,113


55,471


412,561Totals


21,795


19,275


63,113


55,471


361,725Net loss

$
(26,448
)
$
(23,751
)
$
(88,716
)
$
(70,694
)
$
(1,115,998
)Net loss per common share - basic

$
(0.01
)
$
(0.01
)
$
(0.04
)
$
(0.04
)Basic weighted average number ofcommon shares


2,138,150


2,138,150


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****NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003 AND****PERIOD FROM AUGUST 18, 1995 (DATE OF INCEPTION)****THROUGH DECEMBER 31, 2004****(Unaudited)**Cumulativefrom2004

2003

InceptionOperating activities:Net loss

$
(88,716
)
$
(70,694
)
$
(1,115,998
)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


1,935


725


31,741Interest receivable from related parties








(50,836
)Interest payable to related parties


60,927


53,132


401,207Net cash used in operating activities


(25,854
)

(16,837
)

(478,816
)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


27,338


16,500


481,002Net proceeds from (payment on) line of credit


(369
)

(42
)

32,460Proceeds from issuance of common stock








149,800Net cash provided by financing activities


26,969


16,458


663,262Net increase (decrease) in cash


1,115


(379
)

1,403Cash, beginning of period


288


439


-Cash, end of period

$
1,403

$
60

$
1,403












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 and nine months ended December 31, 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 and nine months ended December 31, 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 December 31, 2004, the Company has an accumulated deficit of $1,115,998, and a stockholders and working capital deficiency of $945,007. 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 December 31, 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 and nine month periods ended December 31, 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 December 31, 2004 totaled $882,209, which includes notes payable of $481,002 and accrued interest of $401,207. 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 nine-month period ended December 31, 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.
 
 As part of this plan, we intend to reincorporate in Nevada in order to facilitate such acquisitions. California law, under which we are incorporated and are governed, requires shareholder approval of most types of such transactions. Such approval by our shareholders is virtually guaranteed, because management and persons close to management own a clear majority of the outstanding shares. But regulations of the Securities and Exchange Commission still require certain filings under the proxy rules, which filings present at least a 30-day delay in effectuating such acquisitions.
 
 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 $1,403, total assets of $1,403 and liabilities of $946,410.
 
 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 December 31, 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.


10


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.






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**16
Letter of January 14, 2005 from J.H. Cohn LLP to the SEC regarding its concurrence or disagreement with the statements made in Item 4.01 of Form 8-K Current Report December 1, 2004***31
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant 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 adopted pursuant 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 adopted pursuant 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 adopted pursuant 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.  11
 ***Previously filed with Form 8-K Current Report December 1, 2004 Commission file number 000-49708; incorporated herein.**(b)**
**Forms 8-K**Form 8-K December 1, 2004, Item 4.01 Changes in Registrants Certifying Accountant and Item 9.01(b), Commission File No. 000-49708, filed January 14, 2005.Form 8-K February 15, 2005, Item 4.01 Changes in Registrants Certifying Accountant, Commission File No. 000-49708, filed February 22, 2005.







**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: February 22, 2005
By:
/s/ *Lee D. Dodson*Lee D. DodsonChief Executive Officer




12








**RADALE IMPORTS, INC.**
 
 COMMISSION FILE NO. 000-49708
 
 
 **INDEX TO EXHIBITS**
 
 **FORM 10-QSB**
 **FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 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**16
Letter of January 14, 2005 from J.H. Cohn LLP to the SEC regarding its concurrence or disagreement with the statements made in Item 4.01 of Form 8-K Current Report December 1, 2004***31
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant 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 adopted pursuant 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 adopted pursuant 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 adopted pursuant 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.