U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended March 31, 2006

                        Commission File Number 333-126674


                        WALLACE MOUNTAIN RESOURCES CORP.
                 (Name of Small Business Issuer in Its Charter)


           NEVADA                                                20-2597168
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)


   #29B Ebony Tower, President Park
        99 Sukhumvit 24 Road
       Bangkok 10110 Thailand                 +(662)262-9347     (214)594-6128
(Address of principal Executive Offices)    (Telephone Number)    (Fax Number)


Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 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 [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ]

As of March 31, 2006, the registrant had 3,400,000 shares of common stock, $.001
par value, issued and outstanding. No market value has been computed based upon
the fact that no market has been established at this time.

DOCUMENTS INCORPORATED BY REFERENCE
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                               TABLE OF CONTENTS

PART I
Item 1.  Description of Business                                               3
Item 2.  Description of Property                                              11
Item 3.  Legal Proceedings                                                    11
Item 4.  Submission of Matters to a Vote of Securities Holders                11

PART II
Item 5.  Market for Common Equity, Related Stockholder Matters and
         Small Business Issuer Purchases of Equity Securities                 12
Item 6.  Management's Discussion of Analysis or Plan of Operation             13
Item 7.  Financial Statements                                                 19
Item 8.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure                                  19
Item 8A. Controls and Procedures                                              19

PART III
Item 9.  Directors, Executive Officers, Promoters and Control Persons         19
Item 10. Executive Compensation                                               21
Item 11. Security Ownership of Certain Beneficial Owners and
          Management and Related Stockholder Matters                          22
Item 12. Certain Relationships and Related Transactions                       22
Item13.  Exhibits                                                             23
Item 14. Principal Accountant Fees and Services                               23

Signatures                                                                    23

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                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

PRINCIPAL PRODUCTS OR SERVICES AND MARKETS

The one property in the Company's portfolio is the South Wallace Mountain
Project, consisting of 18 unit mineral claims having a total surface area of
approximately 946 acres.

At the current time the property is without known reserves and the proposed
program is exploratory in nature. We have paid a $3,000 retainer to the
geologist to commence the Phase 1 exploration work on the claim. The cost of the
exploration work on the property is disclosed in detail in the Plan of Operation
section of this report.

There is not a plant or any equipment currently located on the property. As
noted in the History of Previous Work subsection, there are underground workings
that were emplaced approximately 50-90 years ago. If they have not completely
collapsed they will still not be safe to enter without proper engineering
inspection.

Hydro electrical power lines that supply power to the town of Beaverdell are
located approximately 300 yards west of the western claim boundary. The initial
exploration will not be heavily dependent on electrical power but will be
supported by generators.

Water required for exploration and development of the claims is available from
the West Kettle River (which is located approximately 350 yards west of the
property and also from Dominion Creek, located immediately east of the property.

The Phase I exploration program will require approximately 3 weeks to complete
and will consist of grid emplacement, soil sampling as well as testing the
effectiveness of MMI and Bio-geochemical methods. An additional 3 weeks will be
required to complete analysis of samples, data compilation and interpretation,
drafting and report writing. Results gained from the program will lead to a
better understanding of, the location of and controls of, mineralization at
known showings as at any new showings and/or anomalous areas discovered as a
result of the Phase I program. We have commenced Phase 1 of the exploration
program but have received no results as of this date.

The Phase II exploration program is contingent upon the success of the Phase I
program and our ability to raise additional funds to cover the costs. Mechanical
trenching and diamond drilling are foreseen to be the logical next step. The
minimum estimated cost of the Phase II program is $100,000 and will take
approximately three months to complete, including the collection and
interpretation of all exploration data. Based on previous work it appears the
Property contains "vein hosted mineralization". In general we would like to have
indications that the mineralization within the veins is worth at least US $100
per ton (gross metal value) to further explore/develop the claims. If a large

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mineralized vein system is present the project could be developed on a large
scale and conversely if a smaller mineralization vein system is present then the
property could be developed on a smaller scale.

In the event that a mineral body that is amiable to bulk mining (open pit) style
development is located then we estimate the mineralization should be worth at
least $US 10 per ton (gross metal value).

The discussions contained herein are management's estimates only. Because we
have only recently commenced our Phase 1 exploration work and have received no
results as yet, we cannot provide a more detailed discussion of our plans if we
find a viable store of minerals on our property, as there is no guarantee that
exploitable mineralization will be found, the quantity or type of minerals if
they are found and the extraction process that will be required. We are also
unable to assure you we will be able to raise the additional funding from the
exercise of the warrants to proceed with any subsequent work on the claims if
mineralization is found in Phase 1.

Based on previous work, there are three main areas of mineralization discovered
within the project to date. The results of analytical results of samples
collected during the previous work are helpful as they provide some indication
as to the grades and location of minerals present on the claims, though there is
no guarantee the previous work will result in any exploitable mineral deposits.

Our exploration work will initially investigate these areas and try to locate
any extensions of mineralization at these areas. We will also try to determine
if there is a relationship between the three areas and if there is further
mineralization located within the area between the 3 mineralized zones.

THE THREE ZONES OF THE PROPERTY

The Scandie Zone consists of two quartz veins that contain high-grade silver
with lead and zinc that have been worked intermittently since the early 1900's.
A total of 344 feet of underground tunnels have been developed on this lode. A
six and a half (6 1/2) foot long sample of the ore yielded 154.8 oz/Ton Silver,
24% Zinc, 10.5% Lead and 0.54% Copper.

The Dell and Dominion Zones were discovered in the early 1980's and both zones
contain copper, gold and silver mineralization occurring within shear (fault)
zones. Grades of 1.45 oz/Ton Gold, 11.0% Copper and 3.65 oz/Ton Silver across 4
inches of chalcopyrite and pyrite within grey quartz were obtained. Limited
trenching and diamond drilling at both zones met with mixed results. The two
zones are located more than 6,000 feet apart along the same or parallel shear
zones. The area between the two zones is highly prospective for the discovery of
additional mineralization.

During 1951 and 1960 nine (9) tons of ore was shipped from the Scandie Zone. The
shipments yielded 498 oz of silver, 635 pounds of lead and 1,290 pounds of zinc.
The calculated grade for these shipments is 55.3 oz/Ton Silver, 3.5% Lead and
7.2% Zinc.

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ACQUISITION OF SOUTH WALLACE MOUNTAIN PROJECT

The claims are currently held in trust in the name of our president, Robert
Gelfand, whom we acquired them from on April 5, 2005 for 1,600,000 common shares
of our stock with a deemed value of $.005 per share or an aggregate amount of
$8,000 USD. The claim was purchased by Robert Gelfand from Madman Mining Co.
Ltd., an unrelated mining property vendor, on April 5, 2005 for $10,000 Canadian
(approximately $8,000 USD).

REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE

Title to the property has already been granted to our president and director,
Robert Gelfand, who holds the claim in trust for the Company. In order to retain
title to the property exploration work in the amount CDN $1,800 must be
completed and filed with the British Columbia Department of Energy Mines and
Petroleum Resources ("BCDM"). If work is completed, in any one year (using a
year based on the staking date of the claim - in this case March 26), in a
greater amount than $1,800 then the excess work can be applied towards future
years exploration requirements. The BCDM charges a filing fee, equal to 10% of
the value of the work recorded, to record the work. Alternatively the company
can pay "cash in lieu" which is also $1,800 per year with a 10% filing fee.

LOCATION AND ACCESS

The South Wallace Property is located 180 miles (290 km) east of Vancouver, near
Beaverdell on the eastern valley slope of the West Kettle River. The property is
in the Greenwood Mining Division, and is centered at approximately 49O24'N
latitude and 119o05'W longitude on NTS Map Sheet 82 E/6E and alternatively on BC
TRIM map 082E035. Beaverdell lies 3 miles (5km) to the north, on Highway 33;
Kelowna and the junction with Highway 97 lies some 50 miles (80km) to the north,
while Rock Creek and the junction of Highways 3 and 33 is 27 miles (45km) to the
south. A network of secondary roads and ATV trails access most parts of the
Property. Initially exploration crews will drive to the property boundaries by
pick-up truck and from there either walk or use an ATV (Quad or four-wheeler) to
go through the property.

PHYSIOGRAPHY

The property is situated within the Monashee Mountains of the Southern Interior
Physiographic Region, and elevations range from 3,000 feet (915m) along the
western edge of the claim to 4,500 feet (1,370m) at the extreme southeastern
point of the claim.

Slopes within the claim area are generally steep except for the height of land,
within the southeastern area of the property, where gently rounded hilltops are
present. Vegetation consists mainly of fir, larch and pine, much of it mature
second growth. Some of the area has been recently logged. There is relatively
little underbrush, and open grassy areas are not uncommon.

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The outcrop of the underlying rock units is fairly good throughout the project.
It is estimated that approximately 30% of the project contains good rock
exposure (they are exposed at the surface) making it easier to identify them and
any mineralized zone they may contain. The other 70% of the project is covered
by a layer of soil and loose rock/gravel of varying thickness, which makes it
harder to locate mineralized zones. We will use geochemical samples (detects
minerals that leach/leak from underlying rocks) and then trench or drill through
the covering dirt to test the zones.

The climate features warm summers and mild winters. The West Kettle Valley is
fairly dry in the summers, although not as dry as the Okanagan valley to the
west. Average yearly precipitation is 20 inches (50cm). A snow pack of 3-5 feet
(1-1.5m) begins to accumulate in November and lingers in places into May. The
recommended field season for initial phases of exploration is from early May to
late November. Drilling and underground development can be carried out on a
year-round basis with the aid of a bulldozer to keep access roads snow-free.

HISTORY OF PREVIOUS WORK

Previous work completed within the current claim boundaries is helpful, as it
has already found three areas that contain mineralization. The results of
analytical results of samples collected during the previous work are also
helpful as they provide some indication as to the grades and location of
minerals present on the claims, though there is no guarantee the previous work
will result in any exploitable mineral deposits.

Our exploration work will initially investigate these areas and try to locate
any extensions of mineralization at these areas. We will also try to determine
if there is a relationship between the three areas and if there is further
mineralization located within the area between the 3 mineralized zones.

The South Wallace Mountain Project is located within the southern area of the
historic Beaverdell Mining Camp. Exploration in the camp dates to the late
1880's, with the discovery of silver on Wallace Mountain in 1897, and production
of silver from as early as 1901. The Highland Bell Mine silver mine was in
continuous production for 76 years (1913 to 1989). At closure in 1989, the mine
had produced a total of over 46 million ounces of Silver, 12,500 tons of Lead
and 15,000 tons of Zinc as well as minor amounts of Cd, Cu and Au.

The first documented exploration of the project area is in 1916, when the owner
of the Scandie claim leased it to a mining company which started development of
the silver, lead ore occurring at the zone.

In 1917, underground development consisting of a 40-foot tunnel, a 10-foot winze
and numerous trenches, open-cuts and stripping were also completed.

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In 1918 an additional 89 feet of underground development and more surface
trenching was completed.

No further records are found until 1951 when 3.5 tons of ore was shipped by a
local miner, Mr. D. Hood.

In 1960, Silver Scandie Mines Ltd., held the ground and another 5.5 tons of ore
was shipped. The upper adit was driven an additional 88 feet. A new lower adit
was also driven 154 feet.

In 1982 - 1983 Canstat Petroleum Resources Corp. completed limited soil
geochemical sampling, trenching and shallow diamond drilling and discovered the
mineralization at the Dell and Dominion Zones.

There is no record of further activity within the project area from 1983 to
present.

It is presumed that the underground tunnels are collapsed and inaccessible, at
the very least they would be unsafe to enter without proper inspection/repair.
The trenches completed in the early part of the 1900's will be sloughed and
would require digging out. The trenches completed during the 1980s would also be
sloughed, although to a lesser extent, and would also require digging out to
resample and map.

PROPERTY GEOLOGY AND MINERALIZATION

The South Wallace Mountain Project is underlain by West Kettle granodiorite. A
body of Permian age metamorphosed volcanic rocks is located immediately to the
east of the project. The granodiorite, near the contact with the volcanic rocks,
is altered. Some hornfels and younger hornblende porphyry dykes occur within the
project. The relationship between the altered granodiorite and the porphyry
dykes to the mineralization is unknown at this time.

Generally east to west trending, quartz filled, faults/shear zones cut the
underlying rocks. All of the mineralization discovered to date occurs either
within, or immediately adjacent to, these fault/shear zones.

SCANDIE ZONE

The Scandie Zone is located within the northeastern quadrant of the project on
the western valley wall of Dominion Creek. The showing is centered approximately
6,500 feet due east from the Dell Zone and approximately 3,500 feet north of the
Dominion Zone at an elevation of 4,300 feet.

Two sets of mineralized quartz veins have been discovered in this area, one
strikes 270o and dips 60 to 70 degrees north, and the second set strikes 100o
and dips 70o south. Both occupy a locally silicified east-trending shear zone.
An alteration halo consisting of chlorite, clay minerals and epidote extends up

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to 10 inches on either side of the veins. The veins themselves are generally 1
to 2 feet in width, although locally can be as wide as 6 feet.

Two adits follow the mineralization; the upper adit is 190 feet in length and
the lower adit is 154 feet in length. Historic records indicate that 9 tons of
ore was shipped from the property.

In 1982 a trench uncovered mineralization consists of galena, sphalerite, pyrite
and chalcopyrite and occurs within quartz veins. A six and a half (6 1/2) foot
long sample of this material yielded 154.8 oz/Ton Silver, 24% Zinc, 10.5% Lead
and 0.54% Copper.

The 9 tons of ore shipped in 1951 and 1960 yielded 498 oz of silver, 635 pounds
of lead and 1,290 pounds of zinc. The calculated grade for these shipments is
55.3 oz/Ton Silver, 3.5% Lead and 7.2% Zinc.

DELL ZONE

The Dell Zone is located within the northwestern quadrant of the project.

During 1982 and 1983, five trenches were dug to investigate the source of a
copper in soil geochemical anomaly discovered the previous year. The trenches
uncovered gold, copper and silver mineralization occurring within an
east-trending shear (fault) zone cutting a unit of altered granite. Copper
staining, pyrite and chalcopyrite were present in both the veins and the wall
rock.

The trenching uncovered an area approximately 35 feet long and 20 feet wide that
contained strong mineralization. Sample values of the area include, 1.45 oz/Ton
Gold, 11.0% Copper and 3.65 oz/Ton Silver across 4 inches of chalcopyrite and
pyrite in grey quartz collected in "Trench 5".

In 1983 five shallow diamond drill holes were competed to test a portion of the
zone. The best drill intersection from this program was obtained from under
Trench 5. This returned 0.12 oz/Ton Gold, 0.52% Copper and 0.32 oz/Ton Silver
across an eight (8) inch interval.

It is apparent that samples were only collected over narrow widths across the
most mineralized vein material. Longer sample intervals should be considered to
investigate the potential for a wide/larger mineralized target.

DOMINION ZONE

The showing is located in the southeastern corner of the project at an elevation
of 4,000 feet, on the crest of an un-named ridge overlooking the Dominion Creek
valley.

Copper staining, occurring within narrow quartz filled shear zones was
discovered in the early 1980's within this area. Subsequently, two trenches and
three shallow diamond-drill holes were completed to test the shear zone thought
to be controlling the mineralization.

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Although trench samples were encouraging, returning anomalous values of silver,
the drilling failed to return any economic grades.

COMPETITION

The mining industry is highly fragmented. We do not compete directly with anyone
for the exploration or removal of minerals from our property as we hold all
interest and rights to the Claims. Readily available commodities markets exist
in Canada and around the world for the sale of gold and other minerals.
Therefore, we will likely be able to sell any gold or other minerals that we are
able to recover.

We will be subject to competition and unforeseen limited sources of supplies in
the industry in the event spot shortages arise for supplies such as dynamite,
and certain equipment such as bulldozers and excavators that we will need to
conduct exploration. We have not yet attempted to locate or negotiate with any
suppliers of products, equipment or services. If we are unsuccessful in securing
the products, equipment and services we need we may have to suspend our
exploration plans until we are able to do so.

BANKRUPTCY OR SIMILAR PROCEEDINGS

There has been no bankruptcy, receivership or similar proceedings.

REORGANIZATIONS, PURCHASE OR SALE OF ASSETS

There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.

COMPLIANCE WITH GOVERNMENT REGULATION

We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the exploration of minerals
in Canada generally, and in British Columbia specifically.

The initial steps of exploration can be carried out without permitting or
notification to any government body as it is deemed "low-disturbance/low-impact"
by the British Columbia Department of Energy Mines and Petroleum Resources
(BCDM).

With respect to the mechanized trenching or diamond drilling - a plan of
operation will need to be filed with the BCDM. This plan will detail the extent,
location and amount of surface disturbance for the trenching and/or drilling. As
the amount of trenching and drilling (initially) will be limited the permit
should be issued within 30 days. We will be required to obtain a refundable bond
in the amount of $2,000 - $5,000 (depending on the anticipated amount of
disturbance). The bond is to ensure that we reclaim or repair the disturbance

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caused by the trenching and drilling. Usually this reclaiming work entails
filling in and smoothing the surface at trenching sites, clean up and removal of
any work material, and seeding native grass/plants at the sites of any
disturbance.

In the event that trees larger than 6 inches in diameter need to be cut down, a
permit will need to be obtained from the BC Ministry of Forests. This usually
takes less than 30 days to obtain. We will try to adjust the areas we work at
and trench around larger trees (initially) to avoid any disturbance to larger
trees. If the disturbance to larger trees is unavoidable then a permit to cut
will be obtained.

There are nominal costs involved in obtaining the BCDM or Forestry permits (less
than $100.00). The bond required by the BCDM is returned (with interest) upon
proper clean up of the site. There will be costs for the crew/equipment required
to fill in the trenches etc., but as heavy equipment is available locally, and
the amount of disturbance is expected to be minimal, the costs will be most
likely be less than $2,000. (1 day - equip/crew)

In order to retain title to the property, exploration work in the amount CDN
$1,800 must be completed and filed with the BCDM. If work is completed, in any
one year (using a year based on the staking date of the claim - in this case
March 26), in a greater amount than $1,800 then the excess work can be applied
towards future years' exploration requirements. The BCDM charges a filing fee,
equal to 10% of the value of the work recorded, to record the work.
Alternatively the company can pay "cash in lieu" which is also $1,800 per year
with a 10% filing fee.

PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, OR LABOR
CONTRACTS

We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts. We
will assess the need for any copyright, trademark or patent applications on an
ongoing basis.

NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES

We are not required to apply for or have any government approval for its
products or services.

RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO YEARS

We have not expended funds for research and development costs since inception.
The geology report and history of the claims were included in the $8,000 payment
for the claims and not itemized as a separate cost.

NUMBER OF EMPLOYEES

Our only employee is our officer who currently devotes 5-7 hours per week to
company matters and if exploitable minerals are found on our claim he plans to
devote as much time as the board of directors determines is necessary to manage
the affairs of the company.

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REPORTS TO SECURITIES HOLDERS

We provide an annual report that includes audited financial information to our
shareholders. We will make our financial information equally available to any
interested parties or investors through compliance with the disclosure rules of
Regulation S-B for a small business issuer under the Securities Exchange Act of
1934. We will become subject to disclosure filing requirements once our SB-2
registration statement becomes effective, including filing Form 10-KSB annually
and Form 10-QSB quarterly. In addition, we will file Form 8K and other proxy and
information statements from time to time as required. We do not intend to
voluntarily file the above reports in the event that our obligation to file such
reports is suspended under the Exchange Act. The public may read and copy any
materials that we file with the Securities and Exchange Commission, ("SEC"), at
the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The
public may 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
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.

ITEM 2 - DESCRIPTION OF PROPERTY

The Company currently uses the space at the premises of the sole officer and
director of the Company, Robert Gelfand, on a rent free basis. The premises are
located at #29B Ebony Tower, President Park, 99 Sukhumvit 24 Road, Bangkok 10110
Thailand. The facilities include an answering machine, a fax machine, computer
and office equipment, as well as access to onsite meeting room facilities. The
Company intends to use these facilities for the time being until it feels it has
outgrown them. We currently have no investment policies as they pertain to real
estate, real estate interests or real estate mortgages.

ITEM 3 - LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings nor do we have any
knowledge of any threatened litigation.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

No matters were submitted to a vote of security holders during the year ended
March 31, 2006.

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                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

We have obtained a listing to have our shares quoted on the OTC Electronic
Bulletin Board (OTCBB). On March 8, 2006 we were cleared for trading under the
symbol WMTN. The OTCBB is a regulated quotation service that displays real-time
quotes, last sale prices and volume information in over-the-counter (OTC)
securities. The OTCBB is not an issuer listing service, market or exchange.
Although the OTCBB does not have any listing requirements per se, to be eligible
for quotation on the OTCBB, issuers must remain current in their filings with
the SEC or applicable regulatory authority. Securities quoted on the OTCBB that
become delinquent in their required filings will be removed following a 30 or 60
day grace period if they do not make their required filing during that time.

As of the date of this filing, there has been no trading of our securities, and,
therefore, no high and low bid pricing. As of the date of this report Wallace
Mountain had 27 shareholders of record.

In December 2005, 800,000 units were issued to 26 investors in our SB-2 offering
for the aggregate sum of $40,000 in cash. Each Unit consists of one share of
Common Stock and one Common Stock Purchase Warrant. Each one whole Common Stock
Purchase Warrant will entitle the holder to purchase one additional share of
Common Stock at a price of $.10 per Share expiring March 22, 2008.

SHARES AVAILABLE UNDER RULE 144

On March 30, 2005, a total of 1,000,000 shares of Common Stock were issued in
exchange for organizational services and expenses, proprietary rights, business
plans, and cash in the amount of $5,000 U.S., or $.005 per share. On April 5,
2005, a total of 1,600,000 shares of Common Stock were issued in exchange for
mining claims valued in the amount of $8,000 U.S., or $.005 per share. All
2,600,000 shares are held by our affiliates, as that term is defined in Rule
144(a)(1). At the present time, the resale or transfer of the restricted shares
of Common Stock is not permissible. In general, under Rule 144 as amended, a
person who has beneficially owned and held restricted securities for at least
one year, including affiliates, may sell publicly without registration under the
Securities Act, within any three-month period, assuming compliance with other
provisions of the Rule, a number of shares that do not exceed the greater of(i)
one percent of the common stock then outstanding or, (ii) the average weekly
trading volume in the common stock during the four calendar weeks preceding such
sale. A person who is not deemed an "affiliate" of our Company and who has
beneficially owned shares for at least two years would be entitled to unlimited
re-sales of such restricted securities under Rule 144 without regard to the
volume and other limitations described above.

The stock transfer agent for our securities is Holladay Stock Transfer, 2939 N.
67th Place, Scottsdale, Arizona 85251, telephone (480)481-3940.

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DIVIDENDS

We have never declared or paid any cash dividends on our common stock. For the
foreseeable future, we intend to retain any earnings to finance the development
and expansion of our business, and we do not anticipate paying any cash
dividends on its common stock. Any future determination to pay dividends will be
at the discretion of the Board of Directors and will be dependent upon then
existing conditions, including our financial condition and results of
operations, capital requirements, contractual restrictions, business prospects,
and other factors that the board of directors considers relevant.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

We are still in our exploration stage and have generated no revenues to date.

We incurred operating expenses of $20,754 for the year ended March 31, 2006.
These expenses consisted of general operating expenses and professional fees
incurred in connection with the day to day operation of our business and the
preparation and filing of our periodic reports. As of March 31, 2006 the officer
and director had loaned the company $1,123, for which there is no specific terms
of repayment.

Cash provided by financing activities for the year ended March 31, 2006 was
$40,000, resulting from the sale of our common stock in an initial public
offering, which was completed in December 2005.

Our auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until we
begin removing and selling minerals. There is no assurance we will ever reach
that point.

LIQUIDITY AND CAPITAL RESOURCES

Wallace Mountain's current cash balance is $30,494. Until approximately December
of 2006, we believe our cash balance is sufficient to fund our operations. If we
experience a shortage of funds prior to realizing revenues or obtaining funds
pursuant to the exercise of warrants, we may utilize funds from our director who
has informally agreed to advance funds to allow us to pay for operating costs,
however our director has no formal commitment, arrangement or legal obligation
to advance or loan funds to Wallace Mountain. We are an exploration stage
company and have generated no revenue to date. We have sold $45,000 in equity
securities to pay for our operations.

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OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES - The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

INCOME TAXES - The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, which requires recognition
of deferred tax assets and liabilities for future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and tax credit carry
forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
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 operations in
the period that includes the enactment date.

Management feels the Company will have a net operating loss carryover to be used
for future years. The Company has not established a valuation allowance for the
full tax benefit of the operating loss carryovers due to the uncertainty
regarding realization.

NET LOSS PER COMMON SHARE - The Company computes net loss per share in
accordance with SFAS No. 128, Earnings per Share (SFAS 128) and SEC Staff
Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB
98, basic net loss per share is computed by dividing the net loss available to
common stockholders for the period by the weighted average number of shares of
common stock outstanding during the period. The calculation of diluted net loss
per share gives effect to common stock equivalents; however, potential common
shares are excluded if their effect is anti-dilutive. For the period from March
30, 2005 (Date of Inception) through March 31, 2006, no options and warrants
were excluded from the computation of diluted earnings per share because their
effect would be anti-dilutive. See Note 7 Subsequent Events.

REVENUE RECOGNITION - The Company has no revenues to date from its operations.

LEGAL PROCEDURES - The Company is not aware of, nor is it involved in any
pending legal proceedings.

STOCK-BASED COMPENSATION - The Company applies Accounting Principles Board
("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and Related

                                       14
<PAGE>
Interpretations, in accounting for stock options issued to employees. Under APB
No. 25, employee compensation cost is recognized when estimated fair value of
the underlying stock on date of the grant exceeds exercise price of the stock
option. For stock options and warrants issued to non-employees, the Company
applies SFAS No. 123, Accounting for Stock-Based Compensation, which requires
the recognition of compensation cost based upon the fair value of stock options
at the grant date using the Black-Scholes option pricing model.

The following table represents the effect on net loss and loss per share if the
Company had applied the fair value based method and recognition provisions of
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation", to stock-based employee compensation for the period
ended March 31, 2006:

                                                                        2006
                                                                     ----------

     Net loss, as reported                                           $  (20,754)
     Add:    Stock-based employee compensation expense
             included in reported loss, net of related tax effects           --
     Deduct: Total stock-based employee compensation
             expense determined under fair value based methods
             for all awards, net of related tax effects                      --
                                                                     ----------

          Pro forma net loss                                         $  (20,754)
                                                                     ==========
          Net loss per common share:
            Basic and fully diluted loss per share, as reported      $    (0.00)
                                                                     ==========
            Basic and fully diluted loss per share, pro forma        $    (0.00)
                                                                     ==========

There were no stock options granted for the period ended March 31, 2006. As of
March 31, 2006 there are a total of 800,000 Common Stock Purchase Warrants with
each Warrant entitling the holder to purchase one additional share of Common
Stock at a price of $.10 per Share expiring March 22, 2008. There are
additionally no other written or verbal agreements related to the sale of any
stock, option or warrants of the Company's common stock as of March 31, 2006.
See Note 7 Subsequent Events.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure". SFAS No. 148 amends the transition and
disclosure provisions of SFAS No. 123. The Company is currently evaluating SFAS
No. 148 to determine if it will adopt SFAS No. 123 to account for employee stock
options using the fair value method and, if so, when to begin transition to that
method.

                                       15
<PAGE>
NEW ACCOUNTING PRONOUNCEMENTS -

In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based
Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based
Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows.
Generally, the approach in SFAS No. 123(R) is similar to the approach described
in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro forma disclosure is no longer
an alternative. The new standard will be effective for the Company in the first
interim or annual reporting period beginning after December 15, 2005. The
Company expects the adoption of this standard will have a material impact on its
financial statements.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of
ARB No. 43, Chapter 4. SFAS No. 151 amends the guidance in ARB No. 43, Chapter
4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle
facility expense, freight, handing costs, and spoilage. This statement requires
that those items be recognized as current period charges regardless of whether
they meet the criterion of "so abnormal" which was the criterion specified in
ARB No. 43. In addition, this Statement requires that allocation of fixed
production overheads to the cost of production be based on normal capacity of
the production facilities. This pronouncement is effective for the Company
beginning October 1, 2005. The Company has not yet assessed the impact on
adopting this new standard.

In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based
Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based
Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows.
Generally, the approach in SFAS No. 123(R) is similar to the approach described
in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro forma disclosure is no longer
an alternative. The new standard will be effective for the Company in the first
interim or annual reporting period beginning after December 15, 2005. The
Company expects the adoption of this standard will have a material impact on its
financial statements.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets, an amendment of APB Opinion No. 29 "effective for non-monetary asset
exchanges occurring in the fiscal year beginning January 1, 2006. SFAS No. 153
requires that exchanges of productive assets be accounted for at fair value
unless fair value cannot be reasonably determined or the transaction lacks
commercial substance. SFAS No. 153 is not expected to have a material effect on
the company's Consolidated Financial Statements.

                                       16
<PAGE>
In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections
- a Replacement of APB Opinion No. 20 and FASB Statement No. 3". SFAS 154
requires retrospective application to prior period financial statements of
changes in accounting principle, unless it is impracticable to determine either
the period-specific effects or the cumulative effect of the change. SFAS 154
also redefines "restatement" as the revising of previously issued financial
statements to reflect the correction of an error. This statement is effective
for accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. The Company does not believe that the adoption of SFAS
154 will have a significant impact on the financial statements.

PLAN OF OPERATION

Our plan of operation for the next twelve months is to complete the first phase
of exploration programs on the South Wallace Mountain Project claims consisting
of re-sampling of old workings, geologic mapping, analytical and test surveys.
In addition to the $24,000 we anticipate spending for Phase I of the exploration
program as outlined below ($3,000 which has been paid to the geologist to
commence Phase 1) we anticipate spending an additional $9,000 on professional
fees, including complying with reporting obligations as required by the
Securities and Exchange Commission and general administrative costs. Total
expenditures over the next 12 months are therefore expected to be $30,000.

PHASE I

The Phase I program will require approximately 3 weeks to complete and will
consist of grid emplacement and soil sampling, as well as testing the
effectiveness of MMI and Biogeochemical methods. An additional 3 weeks will be
required to complete analysis of samples, data compilation and interpretation,
drafting and report writing. Results gained from the program will lead to a
better understanding of, the location of and controls of, mineralization at
known showings as at any new showings and/or anomalous areas discovered as a
result of the Phase I program.

<TABLE>
<CAPTION>
<S>                               <C>                                                          <C>
PERSONNEL:
  Senior Geologist                3 days @ $325.00                                               $   975.00
  Project Geologists              15 days @ $225.00 ea                                             6,750.00
  Prospector & Field Assistant    15 days @ $160.00 ea                                             4,800.00

FIELD COSTS:
  Field Camp and Supplies         30 man/days @ $40.00/m/d
                                  (including camp rental, GPS rental, food, prospecting
                                  and sampling equipment, first aid and chain saw)                 1,200.00
  Field Communications            Long Distance charges Motorola 2 way field radios                  300.00
</TABLE>

                                       17
<PAGE>
<TABLE>
<CAPTION>
<S>                               <C>                                                          <C>
  Survey Consumables              Sample bags, survey flagging, pickets etc.                         775.00

TRANSPORTATION:
  Truck Rental                    20 days $80.00                                                   1,600.00
  Mob/de-mob                      Vancouver - Beaverdell return (fuel/meals/motel & truck
                                  mileage charges)                                                   400.00

ANALYTICAL:
  Soil Samples                    200 samples @ $9.50/sample (Au + 32 element ICP)                 1,900.00
  MMI / Bio Geochemical           10 samples                                                     $   300.00

OFFICE & ENGINEERING:
  Report Writing                  based on results of Phase I exploration program                  1,600.00
  Drafting/Cartography            (including field base map and all final maps detailing
                                  geological mapping, sample locations and results,
                                  location of old workings and compilation of results
                                  from previous work on property)                                  1,200.00

OVERHEAD & CONTINGENCY                                                                             2,200.00
                                                                                                 ----------

TOTAL ESTIMATE COST OF THE PHASE I EXPLORATION PROGRAM                                           $24,000.00
                                                                                                 ==========
</TABLE>

PHASE II:

The Phase II exploration program is contingent on the success of the Phase I
program. Mechanical trenching and diamond drilling are foreseen to be the
logical next step. The minimum estimated cost of the Phase II program is
$80,000.

The above program costs are management's estimates only and the actual project
costs may exceed our estimates. We have only recently commenced exploration on
the South Wallace Mountain Project claims and have no results from the
geologist.

The program should take approximately up to a one month to complete. Following
the phase one exploration, we intend to complete a drilling program on the
claims. The estimated cost of this program is $80,000 and will take
approximately three months to complete, including the collection and
interpretation of all exploration data.

Subject to financing, we anticipate commencing the drill program in late summer
early autumn of 2006. Follow up drilling would occur in the spring of 2007.
While weather may occasionally prevent us from accessing the South Wallace
Mountain Project claims in winter months, we do not expect conditions to impact
our plan of operation, as we have scheduled our exploration programs during the

                                       18
<PAGE>
spring, summer and autumn. We have paid a $3,000 retainer to Madman Mining
Company, Ltd. to commence Phase 1 of our exploration program. We will require
additional funding from the exercise of the warrants associated with our equity
securities offering to proceed with any subsequent recommended drilling work on
the claims. We cannot provide investors with any assurance that we will be able
to raise sufficient funding from the exercise of the warrants to fund any work
after the first phase of the exploration program.

ITEM 7 - FINANCIAL STATEMENTS

The audited financial statements of Wallace Mountain Resources Corp. for the
year ended March 31, 2006, and related notes, which are included in this report
have been examined by DeJoya, Griffith and Associates, and have been so included
in reliance upon the opinion of such accountants given upon their authority as
an expert in auditing and accounting.

ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

None.

ITEM 8A - CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to our company, particularly during
the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have no identified any significant deficiencies or material
weaknesses in our internal controls, and therefore there were no corrective
actions taken.

                                    PART III

ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The director and officer of Wallace Mountain Resources Corp., whose one year
term will expire 4/15/07, or at such a time as his successor(s) shall be elected
and qualified is as follows:

                                       19
<PAGE>


Name & Address           Age      Position     Date First Elected   Term Expires
--------------           ---      --------     ------------------   ------------
Robert Gelfand           40       President,       03/30/05          04/15/07
#29B Ebony Tower                  Secretary,
President Park                    Treasurer,
99 Sukhumvit 24 Road              CFO, CEO &
Bangkok 10110 Thailand            Director

The foregoing person is a promoter of Wallace Mountain, as that term is defined
in the rules and regulations promulgated under the Securities and Exchange Act
of 1933.

Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the board of directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.

The director and officer currently devote an immaterial amount of time,
approximately 5 to 7 hours per week, to manage the business affairs of our
company. If exploitable minerals are found on our claim, Mr. Gelfand intends to
devote as much time as the board of directors deems necessary to manage the
affairs of the company.

No executive officer or director of the corporation has been the subject of any
order, judgment, or decree of any court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring, suspending or
otherwise limiting him or her from acting as an investment advisor, underwriter,
broker or dealer in the securities industry, or as an affiliated person,
director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities.

No executive officer or director of the corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.

No executive officer or director of the corporation is the subject of any
pending legal proceedings.

RESUME

ROBERT GELFAND has been the President, CEO, Treasurer, CFO, Secretary, and
Director of the Company since inception. From July 1996 to the present he has
been a Director of StarAsia Capital Inc., a venture capital company for emerging
growth companies in Bangkok, Thailand. From April 1999 to January 2001 he was a
Director and Officer of Never Miss A Call, Inc., a publicly-traded Nevada
corporation, that operated an automated voice answering service in Vancouver,
BC, Canada. From August 1998 to April 1999 he was a Director and Officer of

                                       20
<PAGE>
Pac-Rim Consulting, Inc., a publicly-traded Nevada corporation, that offered
consulting services providing guidance in real estate transactions for investors
in SE Asia looking to purchase real estate in Canada located in Vancouver, BC,
Canada. From September 1997 to January 1999 he was a Director and Officer of
Meximed Industries, a publicly-traded Nevada corporation, that was a medical
supplies distributor based out of Vancouver, BC.

Mr. Gelfand holds a Bachelor of Commerce Degree (Finance major) from The
University of British Columbia, in Vancouver, BC, Canada where he received it in
1989. Mr. Gelfand also holds the Chartered Financial Analyst designation (CFA)
which he received from the CFA Institute in Charlottesville, Virginia. He
intends to devote his time as required to the business of the Company.

EMPLOYMENT AGREEMENTS

None of the Company's officers, directors, advisors or key employees are
currently party to employment agreements with the Company. The Company has no
pension, health, annuity, bonus, insurance, stock options, profit sharing or
similar benefit plans; however, the Company may adopt such plans in the future.
There are presently no personal benefits available for directors, officers or
employees of the Company.

ITEM 10 - EXECUTIVE COMPENSATION

Currently, our officer and director is not being compensated for his services
during the development stage of our business operations.

He is reimbursed for any out-of-pocket expenses he may incur on our behalf. In
addition, in the future, we may approve payment of salaries for our officers and
directors, but currently, no such plans have been approved. We also do not
currently have any benefits, such as health insurance, life insurance or any
other benefits available to our employees.

In addition, our officer and director is not party to any employment agreements.

                           Summary Compensation Table
<TABLE>
<CAPTION>
                                                Other
Name &                                          Annual       Restricted                           All Other
Principal                                       Compen-        Stock        Options       LTIP      Compen-
Position         Year    Salary($)   Bonus($)   sation($)    Award(s)($)     SARs(#)   Payouts($)  sation($)
--------         ----    ---------   --------   ---------    -----------     -------   ----------  ---------
<S>             <C>     <C>         <C>        <C>          <C>             <C>        <C>        <C>
R. Gelfand       2006       -0-        -0-         -0-           -0-           -0-         -0-         -0-
President        2005       -0-        -0-         -0-           -0-           -0-         -0-         -0-
</TABLE>

                                       21
<PAGE>
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

The following table sets forth information on the ownership of Wallace
Mountain's voting securities by officers, directors and major shareholders as
well as those who own beneficially more than five percent of our common stock as
of the date of this report:

         Name and
        Address of                          No. of            Percentage
     Beneficial Owner(1)                    Shares           of Ownership:
     -------------------                    ------           -------------
     Robert Gelfand                       2,600,000              76%
     #29 Ebony Tower
     President Park
     99 Sukhumvit 24 Road
     Bangkok 10110 Thailand

     All Officers and
     Directors as a Group                 2,600,000              76%

----------
(1)  The person named above may be deemed to be a "parent" and "promoter" of the
     Company, within the meaning of such terms under the Securities Act of 1933,
     as amended, by virtue of his direct holdings in the Company.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The principal executive office and telephone number are provided by Mr. Gelfand,
the officer and director of the corporation. The costs associated with the use
of the telephone and mailing address were deemed to be immaterial as the
telephone and mailing address were almost exclusively used by him for other
business purposes.

As of March 31, 2006, a loan payable in the amount of $1,123 was due Robert
Gelfand, the officer and director. We have not established any specific terms of
repayment and it is a non-interest bearing loan.

On March 30, 2005, a total of 1,000,000 shares of Common Stock were issued in
exchange for organizational services and expenses, proprietary rights, business
plans, and cash in the amount of $5,000 U.S., or $.005 per share. On April 5,
2005, a total of 1,600,000 shares of Common Stock were issued in exchange for
mining claims valued in the amount of $8,000 U.S., or $.005 per share. All of
such shares are "restricted" securities, as that term is defined by the
Securities Act of 1933, as amended, and are held by officers and directors of
the Company. (See "Principal Stockholders".)

                                       22
<PAGE>
ITEM 13 - EXHIBITS

The following exhibits are included with this filing:

       Exhibit
        Number                          Description
        ------                          -----------
     Exhibit 31.1      302 Certification of Chief Executive Officer
     Exhibit 31.2      302 Certification of Chief Financial Officer
     Exhibit 32.1      906 Certification of Chief Executive Officer
     Exhibit 32.2      906 Certification of Chief Financial Officer

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The total fees charged to the company for audit services were $5,825 for
audit-related services were $Nil, for tax services were $Nil and for other
services were $Nil during the year ended March 31, 2006.

For the year ended March 31, 2005, there were no audit services, audit-related
services, tax services or other services.

                                   SIGNATURES

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


/s/ Robert Gelfand                                               June 17, 2006
-------------------------------------                            -------------
Robert Gelfand, President                                             Date
(Principal Executive Officer,
Principal Financial Officer,
Principal Accounting Officer)

                                       23
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders
Wallace Mountain Resources Corp
(A Development Stage Company)
Bangkok, Thailand 10110

We have audited the accompanying  balance sheets of Wallace  Mountain  Resources
Corp.  (A  Developmental  Stage  Company) as of March 31, 2006,  and the related
statements  of  operations,  stockholders'  equity,  and cash flows for the year
ended March 31, 2006 and for the period from March 30,  2005(Inception)  through
March  31,  2006.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial  statements  based  on our  audits.  We did not  audit  the  financial
statements  of Wallace  Mountain  Resources  Corp.  as of March 31, 2005.  Those
statements  were audited by other  auditors'  whose report has been furnished to
us, and in our  opinion,  insofar as it relates to the  amounts  included in the
period  ending  March  31,  2005,  is based  solely  on the  report of the other
auditors.

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.  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  provide  a
reasonable basis for our opinion.

In our  opinion,  based on our audit and the report of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position  of the  Company as of March 31,  2006 and 2005 and the
results of its  operations and its cash flows for the year ended March 31, 2006,
and for the period from March 30, 2005  (Inception)  through  March 31, 2006, in
conformity with U.S. generally accepted accounting principles.

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 has suffered losses from operations,  all of
which raise  substantial doubt about its 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/ De Joya Griffith & Company, LLC
---------------------------------------
De Joya Griffith & Company, LLC
June 12, 2006
Henderson, Nevada

                                      F-1
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                                 BALANCE SHEET

<TABLE>
<CAPTION>
                                                                    Audited            Audited
                                                                     As of              As of
                                                                 March 31, 2006      March 31, 2005
                                                                 --------------      --------------
<S>                                                                 <C>                <C>
                                     ASSETS

Current assets
  Cash                                                              $ 30,494           $  5,000
  Prepaid expenses                                                     3,000                 --
                                                                    --------           --------
      Total current assets                                            33,494              5,000

Total assets                                                        $ 33,494           $  5,000
                                                                    ========           ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable                                                  $    125           $     --
  Loan payable to a director                                           1,123                 --
                                                                    --------           --------
      Total current liabilities                                        1,248                 --
                                                                    --------           --------

      Total liabilities                                                1,248                 --

Stockholders' equity
  Common stock; $.001 par value; 75,000,000 shares
   authorized, 3,400,000 and 1,000,000 shares issued and
   outstanding as of March 31, 2006 and March 31, 2005                 3,400              1,000
  Additional paid-in capital                                          49,600              4,000
  Accumulated deficit                                                (20,754)                --
                                                                    --------           --------
      Total stockholders' equity                                      32,246              5,000
                                                                    --------           --------

      Total liabilities and stockholders' equity                    $ 33,494           $  5,000
                                                                    ========           ========
</TABLE>

                 See Accompanying Notes to Financial Statements

                                      F-2
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                            STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                         Period from           Period from
                                                                        March 30, 2005        March 30, 2005
                                                   April 1, 2005     (Date of inception)    (Date of inception)
                                                     through               through               through
                                                  March 31, 2006        March 31, 2005        March 31, 2006
                                                  --------------        --------------        --------------
<S>                                                 <C>                   <C>                   <C>
Revenue                                             $        --           $       --            $        --

Operating expenses
  Professional fees                                       6,272                   --                  6,272
  General and administrative                             14,482                   --                 14,482
                                                    -----------           ----------            -----------

      Total operating expenses                           20,754                   --                 20,754
                                                    -----------           ----------            -----------

      Loss from operations                              (20,754)                  --                (20,754)

Other income (expenses):
  Other expense                                              --                   --                     --
  Interest expense                                           --                   --                     --
                                                    -----------           ----------            -----------
      Total other income (expenses)                          --                   --                     --
                                                    -----------           ----------            -----------

      Loss before provision for income taxes            (20,754)                  --                (20,754)

Provision for income taxes                                   --                   --                     --
                                                    -----------           ----------            -----------

Net loss                                            $   (20,754)          $       --            $   (20,754)
                                                    -----------           ----------            -----------

Basic and diluted loss per common share             $     (0.01)          $       --            $     (0.01)
                                                    ===========           ==========            ===========

Basic and diluted weighted average
    common shares outstanding                         2,847,671            1,000,000              2,837,602
                                                    ===========           ==========            ===========
</TABLE>

                 See Accompanying Notes to Financial Statements

                                      F-3
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                            STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Period from             Period from
                                                                            March 30, 2005          March 30, 2005
                                                       April 1, 2005      (Date of inception)     (Date of inception)
                                                         through               through                 through
                                                      March 31, 2006        March 31, 2005          March 31, 2006
                                                      --------------        --------------          --------------
<S>                                                     <C>                   <C>                     <C>
Cash flows from operating activities:
  Net loss                                              $(20,754)             $     --                $(20,754)
  Stock issued for mining claims                           8,000                    --                   8,000
  Adjustments to reconcile net loss to
  Changes in operating assets and liabilities:
    Prepaid expenses                                      (3,000)                   --                  (3,000)
    Accounts payable                                         125                    --                     125
    Loan payable to a director                             1,123                    --                   1,123
                                                        --------              --------                --------
        Net cash used by operating activities            (14,506)                   --                 (14,506)

Cash flows from investing activities:
  Purchase of property and equipment                          --                    --                      --
                                                        --------              --------                --------
        Net cash used by investing activities                 --                    --                      --

Cash flows from financing activities:
  Proceeds from issuance of common stock                  40,000                 5,000                  45,000
                                                        --------              --------                --------
        Net cash provided by financing activities         40,000                 5,000                  45,000
                                                        --------              --------                --------

Net increase in cash                                      25,494                 5,000                  30,494

Cash, beginning of period                                  5,000                    --                      --
                                                        --------              --------                --------

Cash, end of period                                     $ 30,494              $  5,000                $ 30,494
                                                        ========              ========                ========

Supplementary cash flow information:
  Cash payments for income taxes                        $     --              $     --                $     --
                                                        ========              ========                ========
  Cash payments for interest                            $     --              $     --                $     --
                                                        ========              ========                ========
</TABLE>

                 See Accompanying Notes to Financial Statements

                                      F-4
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                       STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                            Common Stock        Additional                     Total
                                                         -------------------      Paid-in    Accumulated    Stockholders'
                                                         Shares       Amount      Capital       Deficit        Equity
                                                         ------       ------      -------       -------        ------
<S>                                                   <C>         <C>          <C>            <C>             <C>
Balance at March 30, 2005 (Date of inception)                 --      $   --      $    --      $     --       $     --

Common Stock Issued for Cash                           1,000,000       1,000        4,000            --          5,000

Net loss                                                      --          --           --            --             --
                                                       ---------      ------      -------      --------       --------

Balance, March 31, 2005                                1,000,000      $1,000      $ 4,000      $     --       $  5,000
                                                       =========      ======      =======      ========       ========

Common Stock Issued for Mining Claims April 5, 2005    1,600,000       1,600        6,400            --          8,000

Common Stock Issued for Cash December 1, 2005            800,000         800       39,200            --         40,000

Net loss                                                      --          --           --       (20,754)       (20,754)
                                                       ---------      ------      -------      --------       --------

Balance, March 31, 2006                                3,400,000       3,400       49,600       (20,754)        32,246
                                                       =========      ======      =======      ========       ========
</TABLE>

                 See Accompanying Notes to Financial Statements

                                      F-5
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

    DESCRIPTION OF BUSINESS AND HISTORY - Wallace  Mountain  Resources  Corp., a
    Nevada  corporation,  (hereinafter  referred to as the "Company" or "Wallace
    Mountain")  was  incorporated  in the State of Nevada on March 30, 2005. The
    Company was formed to engage in the acquisition, exploration and development
    of natural resource properties of merit.

    The  Company   operations  have  been  limited  to  general   administrative
    operations and is considered a (An  Exploration  Stage  Company)  company in
    accordance with Statement of Financial Accounting Standards No. 7.

    MANAGEMENT OF COMPANY - The company filed its articles of incorporation with
    the Nevada Secretary of State on March 30, 2005, indicating Sandra L. Miller
    on behalf of Resident Agents of Nevada , Inc. as the sole incorporator.  The
    list of officers  filed with the Nevada  Secretary of State on March 9, 2006
    indicate Robert Gelfand as the President,  Secretary, and Treasurer and sole
    Director.

    GOING  CONCERN - The Company  incurred net losses of  approximately  $20,754
    from the period of March 30, 2005 (Date of Inception) through March 31, 2006
    and has  commenced  limited  operations,  rather,  still in the  exploration
    stages, raising substantial doubt about the Company's ability to continue as
    a going concern. The Company will seek additional sources of capital through
    the issuance of debt or equity financing,  but there can be no assurance the
    Company will be successful in accomplishing its objectives.

    The ability of the Company to continue as a going  concern is  dependent  on
    additional  sources of capital and the success of the  Company's  plan.  The
    financial  statements do not include any adjustments that might be necessary
    if the Company is unable to continue as a going concern.

    YEAR END - The Company's year end is March 31.

    USE OF ESTIMATES - The preparation of consolidated  financial  statements in
    conformity with generally accepted accounting principles requires management
    to make estimates and assumptions that affect the reported amounts of assets
    and liabilities  and disclosure of contingent  assets and liabilities at the
    date of the  financial  statements  and the reported  amounts of revenue and
    expenses during the reporting period. Actual results could differ from those
    estimates.

    INCOME TAXES - The Company  accounts for its income taxes in accordance with
    Statement  of  Financial   Accounting  Standards  No.  109,  which  requires
    recognition  of  deferred  tax  assets  and   liabilities   for  future  tax
    consequences  attributable  to differences  between the financial  statement
    carrying amounts of existing assets and liabilities and their respective tax
    bases and tax credit carry forwards. Deferred tax assets and liabilities are
    measured  using enacted tax rates expected to apply to taxable income in the
    years in which those  temporary  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  operations  in the period  that  includes  the
    enactment date.

    Management  feels the Company will have a net operating loss carryover to be
    used for future years. The Company has not established a valuation allowance
    for the  full  tax  benefit  of the  operating  loss  carryovers  due to the
    uncertainty regarding realization.

    NET LOSS PER  COMMON  SHARE - The  Company  computes  net loss per  share in
    accordance  with SFAS No. 128,  Earnings  per Share (SFAS 128) and SEC Staff
    Accounting  Bulletin No. 98 (SAB 98).  Under the  provisions of SFAS 128 and
    SAB 98,  basic  net loss per  share is  computed  by  dividing  the net loss
    available  to common  stockholders  for the period by the  weighted  average
    number  of shares  of  common  stock  outstanding  during  the  period.  The
    calculation  of  diluted  net loss per share  gives  effect to common  stock
    equivalents;  however,  potential common shares are excluded if their effect
    is  antidilutive.  For the period  from March 30,  2005 (Date of  Inception)
    through  March 31, 2006,  no options and  warrants  were  excluded  from the
    computation  of diluted  earnings  per share  because  their effect would be
    antidilutive. See Note 7 Subsequent Events.

                                      F-6
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (CONT)

    REVENUE  RECOGNITION  - The  Company  has  no  revenues  to  date  from  its
    operations.

    LEGAL  PROCEDURES  - The  Company is not aware of, nor is it involved in any
    pending legal proceedings.

    STOCK-BASED  COMPENSATION - The Company applies Accounting  Principles Board
    ("APB")  Opinion  No. 25,  Accounting  for Stock  Issued to  Employees,  and
    Related   Interpretations,   in  accounting  for  stock  options  issued  to
    employees.  Under APB No. 25, employee  compensation cost is recognized when
    estimated  fair value of the  underlying  stock on date of the grant exceeds
    exercise price of the stock option. For stock options and warrants issued to
    non-employees,  the Company applies SFAS No. 123, Accounting for Stock-Based
    Compensation, which requires the recognition of compensation cost based upon
    the fair value of stock  options  at the grant date using the  Black-Scholes
    option pricing model.

    The following table  represents the effect on net loss and loss per share if
    the  Company  had  applied  the fair  value  based  method  and  recognition
    provisions of Statement of Financial  Accounting  Standards  (SFAS) No. 123,
    "Accounting  for   Stock-Based   Compensation",   to  stock-based   employee
    compensation for the period ended March 31, 2006:

                                                                        2006
                                                                     ----------

     Net loss, as reported                                           $  (20,754)
     Add:    Stock-based employee compensation expense
             included in reported loss, net of related tax effects           --
     Deduct: Total stock-based employee compensation
             expense determined under fair value based methods
             for all awards, net of related tax effects                      --
                                                                     ----------

          Pro forma net loss                                         $  (20,754)
                                                                     ==========
          Net loss per common share:
            Basic and fully diluted loss per share, as reported      $    (0.00)
                                                                     ==========
            Basic and fully diluted loss per share, pro forma        $    (0.00)
                                                                     ==========

    There were no stock options  granted for the period ended March 31, 2006. As
    of March  31,  2006  there  are a total of  800,000  Common  Stock  Purchase
    Warrants with each Warrant  entitling the holder to purchase one  additional
    share of Common Stock at a price of $.10 per Share  expiring March 22, 2008.
    There are additionally no other written or verbal agreements  related to the
    sale of any stock,  option or warrants of the  Company's  common stock as of
    March 31, 2006.  See Note 7 Subsequent  Events.  There has been no effect on
    the  financial  statements  to reflect  these  warrants as there has been no
    trading in the stock and there is no marketable value assigned to stock.

    In December 2002, the FASB issued SFAS No. 148,  "Accounting for Stock-Based
    Compensation-Transition and Disclosure".  SFAS No. 148 amends the transition
    and  disclosure  provisions  of SFAS  No.  123.  The  Company  is  currently
    evaluating  SFAS No.  148 to  determine  if it will  adopt  SFAS No.  123 to
    account for employee  stock  options using the fair value method and, if so,
    when to begin transition to that method.

    NEW ACCOUNTING PRONOUNCEMENTS -

    In December 2004, the FASB issued SFAS No. 123 (revised  2004).  Share-Based
    Payment,  which is a revision of SFAS No. 123,  Accounting  for  Stock-Based
    Compensation.  SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for
    Stock Issued to Employees,  and amends SFAS No. 95, Statement of Cash Flows.
    Generally,  the  approach  in SFAS No.  123(R) is  similar  to the  approach
    described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based
    payments to employees,  including  grants of employee stock  options,  to be
    recognized  in the income  statement  based on their fair values.  Pro forma
    disclosure is no longer an  alternative.  The new standard will be effective
    for the Company in the first interim or annual  reporting  period  beginning
    after December 15, 2005.  The Company  expects the adoption of this standard
    will have a material impact on its financial statements.

                                      F-7
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (CONT)

    In  November  2004,  the FASB  issued  SFAS No.  151,  Inventory  Costs,  an
    amendment of ARB No. 43,  Chapter 4. SFAS No. 151 amends the guidance in ARB
    No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal
    amounts of idle facility expense, freight, handing costs, and spoilage. This
    statement  requires that those items be recognized as current period charges
    regardless of whether they meet the criterion of "so abnormal" which was the
    criterion specified in ARB No. 43. In addition, this Statement requires that
    allocation of fixed production  overheads to the cost of production be based
    on normal  capacity of the  production  facilities.  This  pronouncement  is
    effective for the Company beginning October 1, 2005. The Company has not yet
    assessed the impact on adopting this new standard.

    In December 2004, the FASB issued SFAS No. 123 (revised  2004).  Share-Based
    Payment,  which is a revision of SFAS No. 123,  Accounting  for  Stock-Based
    Compensation.  SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for
    Stock Issued to Employees,  and amends SFAS No. 95, Statement of Cash Flows.
    Generally,  the  approach  in SFAS No.  123(R) is  similar  to the  approach
    described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based
    payments to employees,  including  grants of employee stock  options,  to be
    recognized  in the income  statement  based on their fair values.  Pro forma
    disclosure is no longer an  alternative.  The new standard will be effective
    for the Company in the first interim or annual  reporting  period  beginning
    after December 15, 2005.  The Company  expects the adoption of this standard
    will have a material impact on its financial statements.

    In December  2004,  the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
    Assets,  an amendment of APB Opinion No. 29 "effective for nonmonetary asset
    exchanges  occurring in the fiscal year beginning  January 1, 2006. SFAS No.
    153 requires that  exchanges of  productive  assets be accounted for at fair
    value unless fair value cannot be reasonably  determined or the  transaction
    lacks commercial substance.  SFAS No. 153 is not expected to have a material
    effect on the company's Consolidated Financial Statements.

    In May  2005,  the FASB  issued  SFAS  154,  "Accounting  Changes  and Error
    Corrections - a Replacement of APB Opinion No. 20 and FASB Statement No. 3".
    SFAS  154  requires  retrospective  application  to prior  period  financial
    statements of changes in accounting principle, unless it is impracticable to
    determine either the period-specific effects or the cumulative effect of the
    change. SFAS 154 also redefines  "restatement" as the revising of previously
    issued  financial  statements to reflect the  correction  of an error.  This
    statement is effective for accounting changes and corrections of errors made
    in fiscal years  beginning  after  December  15, 2005.  The Company does not
    believe that the adoption of SFAS 154 will have a significant  impact on the
    financial statements.

    In  February  2006,  the  FASB  issued  Statement  of  Financial  Accounting
    Standards  No. 155,  Accounting  for Certain  Hybrid  Financial  Instruments
    ("SFAS No. 155"), which amends Statement of Financial  Accounting  Standards
    No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
    No.  133")  and  Statement  of  Financial   Accounting  Standards  No.  140,
    Accounting   for   Transfers   and   Servicing  of   Financial   Assets  and
    Extinguishments  of Liabilities  ("SFAS No. 140"). SFAS No. 155 permits fair
    value  measurement  for any hybrid  financial  instrument  that  contains an
    embedded derivative that otherwise would require bifurcation,  establishes a
    requirement  to  evaluate  interests  in  securitized  financial  assets  to
    identify  interests that are  freestanding  derivatives or hybrid  financial
    instruments containing embedded derivatives.  We expect the adoption of SFAS
    155 to  have a  material  impact  on its  consolidated  financial  position,
    results of operations or cash flows.

    In March 2006, the FASB issued Statement of Financial  Accounting  Standards
    No. 156,  Accounting  for  Servicing of Financial  Assets  ("SFAS No. 156"),
    which  amends  FASB  Statement  No. 140 ("SFAS  No.  140").  SFAS 156 may be
    adopted  as early as  January  1,  2006,  for  calendar  year-end  entities,
    provided that no interim  financial  statements have been issued.  Those not
    choosing  to early  adopt are  required  to apply the  provisions  as of the
    beginning  of the first  fiscal year that begins  after  September  15, 2006
    (e.g.,  January 1, 2007, for calendar year-end  entities).  The intention of
    the new  statement  is to  simplify  accounting  for  separately  recognized
    servicing  assets  and  liabilities,  such as  those  common  with  mortgage
    securitization  activities,  as  well  as  to  simplify  efforts  to  obtain
    hedge-like  accounting.  Specifically,  the FASB said FAS No. 156  permits a
    service using derivative financial instruments to report both the derivative
    financial  instrument  and related  servicing  asset or liability by using a
    consistent  measurement  attribute,  or fair  value.  We do not  expect  the
    adoption of SFAS 155 to have a material impact on its consolidated financial
    position, results of operations or cash flows.

                                      F-8
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATION STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. PROPERTY AND EQUIPMENT

    As of  March  31,  2006,  the  Company  does  not  own any  property  and/or
    equipment.

3. STOCKHOLDER'S EQUITY

    The  Company has  75,000,000  shares  authorized  and  3,400,000  issued and
    outstanding  as of March 31, 2006.  The issued and  outstanding  shares were
    issued as follows:

    1,000,000  common shares were issued to Robert  Gelfand on March 30, 2005 in
    exchange for cash in the amount of $5,000 U.S.

    1,600,000  common  shares were issued to Robert  Gelfand on April 5, 2005 in
    exchange for mining claims  transferred to the Company at his cost of $8,000
    U.S.

    800,000 units were issued to 26 investors in the Company's SB-2 offering for
    the  aggregate  sum of $40,000 in cash.  The  Regulation  SB-2  offering was
    declared  effective by the Securities  and Exchange  Commission on September
    27, 2005 and completed in December 2005.  Each Unit consists of one share of
    Common Stock and one

    Common Stock Purchase Warrant.  Each one whole Common Stock Purchase Warrant
    will entitle the holder to purchase one additional  share of Common Stock at
    a price of $.10 per Share expiring March 22, 2008.

4. RELATED PARTY TRANSACTIONS

    As of March 31,  2006, a loan payable in the amount of $1,123 was due Robert
    Gelfand, an officer and director.  As of March 31, 2006, the Company had not
    established any specific  repayment  terms and it is a non-interest  bearing
    loan.

    As of March 31, 2006, there are no other related party transactions  between
    the Company and any officers, other than those mentioned above and in Note 3
    - Stockholder's Equity.

5. STOCK OPTIONS

    As of  March  31,  2006,  the  Company  does  not  have  any  stock  options
    outstanding,  nor does it have any  written  or  verbal  agreements  for the
    issuance or distribution of stock options at any point in the future.

6.   LITIGATION

    As of March 31,  2006,  the  Company is not aware of any  current or pending
    litigation which may affect the Company's operations.

                                      F-9