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

                                   FORM 10-QSB

                 Quarterly Report Under Section 13 or 15 (d) of
                         Securities Exchange Act of 1934


                       For the Period ended June 30, 2006

                        Commission File Number 333-126674


                        WALLACE MOUNTAIN RESOURCES CORP.
                 (Name of small business issuer in its charter)


        Nevada                                                  20-2597168
(State of incorporation)                                (IRS Employer ID Number)


                        #29B Ebony Tower, President Park
                              99 Sukhumvit 24 Road
                             Bangkok 10110 Thailand
                                 +(662)262-9347
          (Address and telephone number of principal executive offices)

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]

Check whether the registrant is an accelerated filer (as defined in Rule 12b-2
of the Exchange Act). Yes [X] No [ ]

Check whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [ ] No [X]

There were 3,400,000 shares of Common Stock outstanding as of June 30, 2006.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS

The un-audited quarterly financial statements for the 3 months ended June 30,
2006, prepared by the company, immediately follow.



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

<TABLE>
<CAPTION>
                                                                   Unaudited           Audited
                                                                     As of              As of
                                                                 June 30, 2006      March 31, 2006
                                                                 -------------      --------------
<S>                                                                 <C>                <C>
                                     ASSETS

Current assets
  Cash                                                              $ 26,937           $ 30,494
  Prepaid expenses                                                        --              3,000
                                                                    --------           --------
      Total current assets                                            26,937             33,494

Total assets                                                        $ 26,937           $ 33,494
                                                                    ========           ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable                                                  $  2,170           $    125
  Loan payable to a director                                        $  1,123              1,123
                                                                    --------           --------
      Total current liabilities                                        3,293              1,248
                                                                    --------           --------

      Total liabilities                                                3,293              1,248

Stockholders' equity
  Common stock; $.001 par value; 75,000,000 shares
   authorized, 3,400,000 shares issued and outstanding
   as of June 30, 2006 and March 31, 2006                              3,400              3,400
  Additional paid-in capital                                          49,600             49,600
  Accumulated deficit                                                (29,356)           (20,754)
                                                                    --------           --------
      Total stockholders' equity                                      23,644             32,246
                                                                    --------           --------

      Total liabilities and stockholders' equity                    $ 26,937           $ 33,494
                                                                    ========           ========
</TABLE>

                 See Accompanying Notes to Financial Statements

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

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

Operating expenses
  Professional fees                                    3,000                 2,350                 9,272
  General and administrative                           5,602                 9,879                20,084
                                                 -----------           -----------           -----------

      Total operating expenses                         8,602                12,229                29,356
                                                 -----------           -----------           -----------

      Loss from operations                            (8,602)              (12,229)              (29,356)

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


      Loss before provision for income taxes          (8,602)              (12,229)              (29,356)
Provision for income taxes                                --                    --                    --
                                                 -----------           -----------           -----------

Net loss                                         $    (8,602)          $   (12,229)          $   (29,356)
                                                 -----------           -----------           -----------

Basic and diluted loss per common share          $     (0.00)          $     (0.00)          $     (0.01)
                                                 ===========           ===========           ===========
Basic and diluted weighted average
 common shares outstanding                         3,400,000             2,529,670             2,949,345
                                                 ===========           ===========           ===========
</TABLE>

                 See Accompanying Notes to Financial Statements

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

<TABLE>
<CAPTION>
                                                                                                 Unaudited
                                                                                                Period from
                                                           Unaudited          Unaudited        March 30, 2005
                                                         April 1, 2006      April 1, 2005   (Date of inception)
                                                            through            through            through
                                                         June 30, 2006      June 30, 2005      June 30, 2006
                                                         -------------      -------------      -------------
<S>                                                        <C>                <C>                <C>
Cash flows from operating activities:
  Net loss                                                 $ (8,602)          $(12,229)          $(29,356)
  Adjustments to reconcile net loss to
  Changes in operating assets and liabilities:
    Change in prepaid expenses                                3,000                 --                 --
    Change in accounts payable                                2,045                 --              2,170
    Change in loan payable to a director                         --                 --              1,123
                                                           --------           --------           --------
        Net cash used by operating activities                (3,557)           (12,229)           (26,063)

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                         --              8,000             53,000
                                                           --------           --------           --------
        Net cash provided by financing activities                --              8,000             53,000
                                                           --------           --------           --------

Net increase in cash                                         (3,557)            (4,229)            26,937

Cash, beginning of period                                    30,494              5,000                 --
                                                           --------           --------           --------

Cash, end of period                                        $ 26,937           $    771           $ 26,937
                                                           ========           ========           ========

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

                 See Accompanying Notes to Financial Statements

                                       4
<PAGE>
                        WALLACE MOUNTAIN RESOURCES CORP.
                         (AN EXPLORATORY 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              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
                                                   ---------      ------      -------      --------       --------

Net loss                                                  --          --           --        (8,602)        (8,602)
                                                   ---------      ------      -------      --------       --------

Balance, June 30, 2006                             3,400,000      $3,400      $49,600      $(29,356)      $ 23,644
                                                   =========      ======      =======      ========       ========
</TABLE>

                 See Accompanying Notes to Financial Statements

                                       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 $29,356 from
   the period of March 30, 2005 (Date of  Inception)  through  June 30, 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.

   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  June 30,  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.

   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.

                                       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)

   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 June 30, 2006:

                                                                         2006
                                                                      ---------
   Net loss, as reported                                              $  (8,602)
   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                                            $  (8,602)
                                                                      =========

        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 June 30, 2006. As of
   June 30, 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 June 30, 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.

   In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and Error
   Corrections"  ("SFAS 154").  SFAS 154 replaces  Accounting  Principles  Board
   Opinion No. 20  "Accounting  Changes" and SFAS No. 3,  "Reporting  Accounting
   Changes in Interim Financial  Statements-An Amendment of APB Opinion No. 28."
   SFAS 154 provides  guidance on the accounting for and reporting of accounting
   changes and error corrections.  SFAS 154 requires "retrospective application"
   of the direct effect of a voluntary  change in accounting  principle to prior
   periods' financial statements where it is practicable to do so. SFAS 154 also
   redefines  the  term  "restatement"  to mean  the  correction  of an error by
   revising  previously issued financial  statements.  SFAS 154 is effective for
   accounting changes and error corrections made in fiscal years beginning after
   December 15, 2005 unless adopted early. We do not expect the adoption of SFAS
   154 to have a material impact on its consolidated financial position, results
   of  operations  or cash  flows,  except  to the  extent  that  the  statement
   subsequently requires retrospective application of a future item.

   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.

                                       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 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.

2. PROPERTY AND EQUIPMENT

   As of June 30, 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 June 30,  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 on December 1, 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 June 30,  2006,  a loan  payable in the amount of $1,123 was due Robert
   Gelfand,  an officer and director.  As of June 30, 2006,  the Company had not
   established  any specific  repayment  terms and it is a non-interest  bearing
   loan.

   As of June 30, 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 June 30, 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 June 30,  2006,  the  Company  is not aware of any  current  or pending
   litigation which may affect the Company's operations.

                                       8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

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

We incurred operating expenses of $8,602 and $12,229 for the three month periods
ended June 30, 2006 and 2005, respectively. 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 June 30, 2006 the officer and director had loaned the company
$1,123, for which there is no specific terms of repayment.

We have generated no revenues and our net loss for the three months ended June
30, 2006 and 2005 was $8,602 and $12,229, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Wallace Mountain's current cash balance is $26,937. We believe our cash balance
is sufficient to fund current operations. If we experience a shortage of funds
our director has informally agreed to advance funds the company to allow us to
remain current in our required filings and cover any costs incurred
corresponding with our shareholders, 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 business
operations.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

PLAN OF OPERATION

We have completed the field work of the first phase of the exploration program
on the South Wallace Mountain Project claims. We are currently waiting for the
geologist to complete his analysis and draft his report.

PHASE I

The Phase I program consisted of grid emplacement, soil sampling as well as
testing the effectiveness of MMI and Biogeochemical methods. The geologist is
now completing his analysis of samples, data compilation and interpretation,
drafting and report writing. We expect his report to be delivered to us during
the month of August 2006. 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

                                       9
<PAGE>
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
  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
                                  (including field base map and all final maps detailing
                                  geological mapping, sample locations and results,
                                  location of old workings and compilation of results
   Drafting/Cartography           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.

The first phase of our exploration program commenced in June 2006. Following
phase one of exploration, and contingent on the findings, 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 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,

                                       10
<PAGE>
as we have scheduled our exploration programs during the spring, summer and
autumn. 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.

CRITICAL ACCOUNTING POLICIES

The un-audited financial statements as of June 30, 2006 included herein have
been prepared without audit pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with general
accepted accounting procedures have been condensed or omitted pursuant to such
rules and regulations. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. It is suggested that these financial statements be read in
conjunction with our March 31, 2006 audited financial statements and notes
thereto, which can be found in our Form K-SB on the SEC website at www.sec.gov
under our SEC File Number 333-126674.

The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgement.

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.

                                       11
<PAGE>
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 June 30, 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.

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 June 30, 2006:

                                                                         2006
                                                                      ---------
   Net loss, as reported                                              $  (8,602)
   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                                            $  (8,602)
                                                                      =========

        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)
                                                                      =========

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<PAGE>
There were no stock options granted for the period ended June 30, 2006. There
are additionally no written or verbal agreements related to the sale of any
stock, option or warrants of the Company's common stock as of June 30, 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.

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

                                       13
<PAGE>
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.

FORWARD LOOKING STATEMENTS

Some of the statements contained in this Form 10-QSB that are not historical
facts are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-QSB, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.


All written forward-looking statements made in connection with this Form 10-QSB
that are attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.

The safe harbors of forward-looking statements provided by the Securities
Litigation Reform Act of 1995 are unavailable to issuers not subject to the
reporting requirements set forth under Section 13(a) or 15(D) of the Securities
Exchange Act of 1934, as amended. As we have not registered our securities
pursuant to Section 12 of the Exchange Act, such safe harbors set forth under
the Reform Act are unavailable to us.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE 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

                                       14
<PAGE>
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.

                                       15
<PAGE>
                          PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are included with this registration statement filing.
Those marked with an asterisk and required to be filed hereunder, are
incorporated by reference and can be found in their entirety in our original
Form SB-2 Registration Statement, filed under SEC File Number 333-126674, at the
SEC website at www.sec.gov:

      Exhibit No.                       Description
      -----------                       -----------
         3.1         Articles of Incorporation*
         3.2         Bylaws*
         31.1        Sec. 302 Certification of Principal Executive Officer
         31.2        Sec. 302 Certification of Principal Financial Officer
         32.1        Sec. 906 Certification of Principal Executive Officer
         32.2        Sec. 906 Certification of Principal Financial Officer

There were no reports filed on Form 8-K during the quarter ended June 30, 2006.

                                   SIGNATURES

Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

July 31, 2006                   Wallace Mountain Resources Corp., Registrant


                                By: /s/ Robert Gelfand
                                   -----------------------------------------
                                   Robert Gelfand, President and Chief
                                   Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

July 31, 2006                   Wallace Mountain Resources Corp., Registrant


                                By: /s/ Robert Gelfand
                                   -----------------------------------------
                                   Robert Gelfand, President, Chief
                                   Executive Officer, Treasurer, Chief Financial
                                   Officer and Principal Accounting Officer

                                       16