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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-QSB

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended April 30, 2002

                       Commission File Number: 000-29475

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                           MALAHAT ENERGY CORPORATION

               (Exact name of Registrant as specified in charter)


                    NEVADA                        87-0640430
           (State of incorporation)      (I.R.S. Employer ID Number)


            700 - 101 Convention Centre Drive
                      Las Vegas, NV                       89109
         (Address of principal executive offices)       (Zip Code)


                                 1-866-404-3311
                          (Issuer's telephone number)

===============================================================================

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

The number of shares outstanding of the Registrant's only class of common stock,
$0.001 par value per share, was 15,500,000 on April 30, 2002.

Transitional Small Business Disclosure Format: Yes [ ] No [X]

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                           MALAHAT ENERGY CORPROATION

                         QUARTERLY REPORT ON FORM 10-Q
                     Quarterly Period Ended April 30, 2002

                               TABLE OF CONTENTS


                                     PART I

                             FINANCIAL INFORMATION

                                                                            PAGE

Item 1. Financial Statements (unaudited)
        Consolidated Balance Sheet as of  April 30, 2002.....................F-1

        Consolidated Statements of Operations for the Three Months
        and the Nine Months Ended April 30, 2001 and 2002....................F-2

        Consolidated Statements of Cash Flows for the Nine Months
        Ended April 30, 2001 and 2002........................................F-3

Notes to Consolidated Financial Statements...................................F-4

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations............................................2

Item 3. Quantitative and Qualitative Disclosures About Market Risk...........11



                                    PART II

                               OTHER INFORMATION

Item 1. Legal Proceedings....................................................12

Item 2. Changes in Securities and Use of Proceeds............................12

Item 3. Defaults Upon Changes of Senior Securities...........................12

Item 4. Submission of Matters to a Vote of Security Holders..................12

Item 5. Other Information....................................................12

Item 6. Exhibits and Report on Form 8-K......................................12

SIGNATURES...................................................................13

This Report on Form 10-QSB contains express or implied forward-looking
statements.  The words "believes", "expects", "anticipates", "intends",
"forecasts", "projects", "plans", "estimates", and similar expressions identify
forward-looking statements.  Such statements reflect the Company's current views
with respect to future events and financial performance or operations and speak
only as of the date the statements are made.  Such forward-looking statements
involve risks and uncertainties and readers are cautioned not to place undue
reliance on forward-looking statements.  The Company's actual results may differ
materially from such statements.  Factors that cause or contribute to such
differences include, but are not limited to, those discussed elsewhere in this
Form 10-QSB in, for example, Item 2, in the section entitled "Risk Factors."
Although the Company believes that the assumptions underlying its forward-
looking statements are reasonable, any of the assumptions could prove inaccurate
and, therefore, there can be no assurance that the results contemplated in such
forward-looking statements will be realized.  The inclusion of such forward-
looking information should not be regarded as a representation by the Company or
any other person that the future events, plans or expectations contemplated by
the Company will be achieved.  The Company undertakes no obligation to publicly
update, review or revise any forward-looking statements to reflect any change in
the Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.


                                     PART I

                             FINANCIAL INFORMATION

Item 1.         Financial Statements

<PAGE>F-1

                           Malahat Energy Corporation
                         (A Development Stage Company)
                           Consolidated Balance Sheet
                                 April 30, 2002
                                  (Unaudited)

ASSETS

Current Assets:
   Cash                                                    $        7,205
   Accounts receivable - other                                     28,632
   Recoverable tax credits                                         55,872
      Total Current Assets                                         91,709

Property and equipment, net                                        15,627

Other Assets - biofuel system                                      56,905

                                                           $      164,241
                                                                =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                        $      109,445
   Due to related parties                                           7,153
      Total Current Liabilities                                   116,598

Stockholders' equity
   Common stock, $.001 par value,
    100,000,000 shares authorized,
    15,500,000 shares issued and outstanding                       15,500
   Additional paid in capital                                   1,895,773
   (Deficit) accumulated during the development stage          (1,859,558)
                                                                   51,715
Other comprehensive income:
   Currency translation adjustment                                 (4,072)
                                                                   47,643

                                                           $      164,241
                                                                =========

<PAGE>F-2

                           Malahat Energy Corporation
                         (A Development Stage Company)
                     Consolidated Statements of Operations
    For the Three Months and Nine Months Ended April 30, 2001 and 2002, and
          the Period From Inception (July 26, 1994) to April 30, 2002
                                  (Unaudited)

<table>
<caption>

                                           <c>               <c>                <c>               <c>             <c>

                                                      Three Months                         Nine Months               Inception to
                                               April 30,          April 30,         April 30,         April 30,         April 30,
                                                 2001               2002              2001               2002             2002
                                              ----------       ----------         ----------        ----------         ----------

Revenue                                      $         -     $          -        $         -     $       7,218       $     13,477

Operating expenses:
  Research and development                        29,867           (1,776)            82,044          (176,694)           249,772
  Interest                                             -                -             38,840                 -            235,645
  General and administrative expenses             63,180           85,555            265,470           386,365          1,387,618
                                                  93,047           83,779            386,354           209,671          1,873,035

Net (loss)                                       (93,047)         (83,779)          (386,354)         (202,453)        (1,859,558)

Other comprehensive income:
  Currency translation adjustment                      -            4,531                  -            (7,686)            (4,072)

Comprehensive (loss)                            ($93,047)        ($79,248)         ($386,354)        ($210,139)       ($1,863,630)
                                              ==========       ==========         ==========        ==========         ==========
Per share information -
basic and fully diluted

Weighted average shares outstanding           10,075,000       15,500,000          8,389,077        15,500,000         10,270,804
                                              ==========       ==========         ==========        ==========         ==========
Net (loss) per share                              ($0.01)          ($0.01)            ($0.05)           ($0.01)            ($0.18)
                                              ==========       ==========         ==========        ==========         ==========
</table>


<PAGE>F-3

                           Malahat Energy Corporation
                         (A Development Stage Company)
                     Consolidated Statements of Cash Flows
             For the Nine Months Ended April 30, 2001 and 2002, and
          the Period From Inception (July 26, 1994) to April 30, 2002
                                  (Unaudited)

<table>
<caption>

                                                     <c>             <c>             <c>
                                                                                         Inception to
                                                        April 30,        April 30,          April 30,
                                                          2001             2002               2002
                                                       ---------         ---------          --------
Cash flows from operating activities:
Net cash (used in) operating activities                ($438,381)        ($165,976)        ($738,911)

Cash flows from investing  activities:
Net cash (used in) investing activities                  (18,325)          (57,976)          (78,793)

Cash flows from financing activities:
Net cash provided by financing activities                403,352                 -           828,981

Net increase (decrease) in cash                          (53,354          (223,952)           11,277
Effect of exchange rate on changes in cash                (1,120)           (4,072)           (4,072)
Beginning - cash balance                                  54,474           235,229                 -

Ending - cash balance                              $           -       $     7,205        $    7,205
                                                       =========         =========          ========
</table>


<PAGE>F-4

                           Malahat Energy Corporation
                   Notes to Consolidated Financial Statements
                                 April 30, 2002
                                  (Unaudited)

(1)     Basis Of Presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America  ("GAAP") for interim financial information and Item 310(b) of
Regulation SB.  They do not include all of the information and footnotes
required by GAAP for complete financial statements.  In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included.  The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the full year.  For further information, refer to the
financial statements of the Company as of July 31, 2001 and the two years then
ended, and the period from inception to July 31, 2001, including notes thereto.

(2)     Earnings Per Share

The Company calculates  net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents, if any, were not considered as their effect would be anti dilutive.

(3)     Impairment of Long Lived Assets

Long lived assets and certain identifiable intangibles held and used by the
Company are reviewed for possible impairment whenever events or circumstances
indicate the carrying amount of an asset may not be recoverable or is impaired.
Management has not identified any impairment losses as of April 30, 2002.

(4)     Research and Development

During the period ended April 30, 2002 the Company negotiated a refund of
certain research and development expenses which it had incurred aggregating
$176,694. The portion of the refund not yet received aggregating $28,632 is
included in accounts receivable - other in the accompanying consolidated balance
sheet.

(5)     Basis of Presentation

The Company's consolidated financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.

The Company has experienced significant losses for the period from inception
(July 26, 1994) to April 30, 2002 and the period from August 1, 2001 to April
30, 2002 aggregating $1,859,558 and $202,453, and has a working capital deficit
of $24,889 at April 30, 2002.

The Company's ability to continue as a going concern is contingent upon its
ability to implement its business plan and to attain profitable operations and
secure financing. In addition, the Company's ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which the Company operates.

The Company is pursuing equity financing for its operations. Failure to secure
such financing or to raise additional capital or borrow additional funds may
result in the Company depleting its available funds and not being able pay its
obligations.

The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

<PAGE>2

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
financial statements and notes to financial statements included elsewhere in
this interim report on Form 10-QSB.  This report and the financial statements
and notes to financial statements contain forward-looking statements, which
generally include the plans and objectives of management for future operations,
including plans and objectives relating to future economic performance and our
current beliefs regarding revenues we might earn if we are successful in
implementing our business strategies.  The Company does not undertake to update,
revise or correct any forward-looking statements.

The information contained in this report is not a complete description of the
Company's business or the risks associated with an investment in our common
stock.  Before deciding to buy or maintain a position in its common stock, you
should carefully review and consider the various disclosures we made in this
report, and in other materials filed with the Securities and Exchange Commission
that discuss the Company's business in greater detail and that disclose various
risks, uncertainties and other factors that may affect business, results of
operations or financial condition.

RESULTS OF OPERATIONS

For the quarter ended April 30, 2001 the Company expended $29,867 on research
and development. For the quarter ended April 30, 2002, the Company showed a
recovery of $1,776 of research and development expenditures, attributable to
Federal government contributions it received.

The Company's operating loss for the quarter ended April 30, 2002 was $83,779 a
decrease of $9,268 from the quarter ended April 30, 2001. This decrease is
attributable to the above noted Federal government contributions.  The Company's
operating loss for the nine months ended April 30, 2002 was $202,453, a decrease
of $183,901 from the same quarter last year.  This decrease is again
attributable to the Federal government contribution.

The loss per common share for the quarter was $0.01; the same as the previous
quarter a year ago. The loss per common share for the nine months ended April
30, 2002 was $0.01 as compared to $0.05 for the nine months ended April 30,
2001.

On March 8, 2002, the Company received a refund of previously expended research
and development costs of approximately $159,000 from Natural Resources Canada, a
Federal government department with expertise in science and technology policy
and programs whose mandate is to support sustainable development and use of
natural resources.  The Company expects further such refunds from Natural
Resources Canada.

The company is concluding manufacturing arrangements with two manufacturers for
the manufacture and installation of the M500  Bio-fuel Systems in Canada and the
US.  The program established with Alliance Financing group Inc accelerates the
opportunities for the Company to provide more M500 Bio-fuel Systems for its
customers, which potentially leads to increased monthly revenue flow.

<PAGE>3

LIQUIDITY AND CAPITAL RESOURCES

As of April 30, 2002 the Company had cash of $7,205 and a  working capital
deficiency of $24,889 at April 30, 2002.

The primary source of cash for the period was the collection of an account
receivable from the government of Canada for approximately $159,000, offset by
the payment of certain accounts payable.  The primary uses of cash were the
operating loss of $202,453 and the acquisition of a bio fuel system for $56,905.

Successful completion of the Company's product from research and development to
a commercial unit phase, and its transition, ultimately, to attaining profitable
operations is dependent upon obtaining additional financing adequate to continue
its research and development activities, manufacturing the Company's M500
BioFuel System commercially and achieving a level of revenue adequate to support
and enhance the Company's operation. Management intends to obtain this funding
through government contributions and grants, incentive environmental credit
programs, the offering of securities and other forms of financing. However,
there can be no assurance that the Company will be able to obtain such
financing, which may impact the Company's ability to continue as a going
concern. While the Company believes that it has sufficient operating revenue and
cash reserves to fund ongoing operations for the year 2002, it is in the process
of seeking additional funding as described above to assist in the Company's
operations and launch into commercial production of the Company's products.

RECENT DEVELOPMENTS AND FUTURE EVENTS

On February 26, 2002, the Company announced that Crusader Technologies Corp, of
Boulder Colorado, will become a market representative for the Company to
represent the M500 Bio-fuel  System in Brazil, Japan and the Caribbean nations.

On March 8, 2002, the Company received its contribution, net of holdback, from
Natural Resources Canada of approximately $159,000 as part of its ongoing
support with development of the M500 Biofuel System for the Company.

On March 14,2002, the Company announced an energy lease program established with
Alliance Financing Group Inc. of Toronto, Canada for CDN $6,000,000 with respect
to its proprietary M500 Bio-Fuel Systems, to enable Malahat customers in the
greenhouse industry to lease the systems.  This energy lease program helps
accelerate Malahat's manufacture and use of the M500 systems by its customers.

RISK FACTORS

There are a number of uncertainties and risk factors that may bear on the
ability of the Company to achieve its business goals and reduce the possibility
of successfully fulfilling its plans. The risks and uncertainties described
below are not the only ones facing the Company. If any of the following risks
actually occur, its business, financial condition or results of operations could
be materially adversely affected.  In that case, the trading price of the common
stock could decline, and you may lose all or part of your investment in its
common stock.

The Company has a limited operating history.  The Company has not yet generated
significant revenue from its business operations.  As a new operating entity,
the Company faces risks and uncertainties relating to its ability to
successfully implement its strategy.  Some of these include:

- ability to develop and sustain revenue growth;
- managing expanding operations;
- competition;
- attracting, retaining and motivating qualified personnel;
- maintaining and developing new, strategic relationships; and
- ability to anticipate and adapt to the changing energy market and any
   changes in government regulation.

The Company has incurred losses and expects losses may continue.  The Company
has incurred operating losses since its inception and expect to continue to
incur losses in the foreseeable future.  As of April 30, 2002, it had an
accumulated deficit of $1,859,558.

To date, the Company has not produced any revenue; operations have been funded
through government grants and private equity.  The Company needs to generate
significant revenue to achieve profitability and cannot be assured that it will
realize sufficient revenue to achieve profitability.  The Company also expects
to incur significant research and development, product development, sales and
marketing and administrative expenses and, as a result, expects to continue to
incur losses for the foreseeable future.

<PAGE>4

The Company may not be able to obtain sufficient funds to grow its business and
any financing may be on terms adverse to the interests of the Company's
shareholders.  The Company may need financing to continue to grow its business.
If financing is not available when required or is not available on acceptable
terms, the Company may be unable to fund its expansion, successfully promote its
business, take advantage of business opportunities or respond to competitive
pressures, any of which could have a material adverse effect on the Company's
ongoing business.  If the Company is able to raise funds, and it does so by
issuing equity securities, holders of the Common Stock may experience
significant dilution of their ownership interest and holders of these securities
may have rights senior to those of the current holders of the Common Stock.  If
the Company obtains financing by issuing debt securities, the terms of these
securities could restrict or prevent the Company from paying dividends and could
limit its flexibility in making business decisions.  Because the Company expects
to generate losses for the foreseeable future, it does not expect that income
from its operations will be sufficient to meet its capital needs.  The Company
expects to raise funds in the future in order to fund its anticipated growth,
more aggressive marketing programs or the acquisition of complementary
businesses, technologies and services.  Obtaining financing will be subject to a
number of factors including: market and economic conditions; the Company's
financial condition and operating performance; and investor sentiment.  These
factors may make the timing, amount, terms and conditions of additional
financing unattractive for the Company.

The Company cannot be certain that its technology and products will achieve
market acceptance or whether it will be able to achieve significant revenue. The
Company is therefore very limited in its ability to predict future revenue.  The
combination of the Company's limited operating experience, the uncertain market
acceptance for its products, and other factors that are beyond its control make
it difficult for the company to accurately forecast its revenue on a quarterly
and annual basis.

The Company's business includes research and development, engineering,
modification and introduction of the M500 unit and new products and may include
entry into new business segments.  Such initial entry into any new segment has
no historical proven data or prior business records.

COMPANY'S PRODUCTS

The Company may not be able to successfully introduce new or enhanced products
and services.  The failure of any new or enhanced products and services to
achieve market acceptance and generate revenue could result in a material
adverse effect on the Company's revenues.  The Company expects to introduce
enhanced products and services in order to generate additional revenues, attract
and retain more employers and respond to competition.  Any new or enhanced
product or service introduced that is not favorably received could damage the
Company's reputation and the perception of its service mark and brand.

The Company has a limited product line and is dependent on the successful
commercialization of its M500 Biofuel System.  It may also be necessary to
develop in a timely manner new and enhanced products that achieve market
acceptance.  The Company has only one principle product that has passed
significant testing and trials and is ready for installation at customer sites.
In order to experience future revenue targets the successful implementation and
customer acceptance of its M500 BioFuel System is essential.  Even if the
Company is able to develop and commercially introduce new technology, products
or enhancements, they may not achieve market acceptance.

Improvements may also be made to the existing alternatives to the Company's
products that could render the company's technology less desirable or obsolete.

Customers may defer orders in anticipation of new products from the Company or
other providers of alternate energy systems.

The timing of orders from its customers and the possibility that these customers
may change their order requirements with little or no advance notice to the
Company.

Potential customers of the Company's technology may have invested substantial
resources in their existing power systems and, as a result, may be reluctant or
slow to adopt a new approach.  Moreover, the Company's technology is an
alternative to existing fossil fuel sources of energy and may never be accepted
by the Company's customers or may be made obsolete by other advances in energy
technology.

<PAGE>5

ALTERNATIVE ENERGY AS A NEW, VIABLE SOURCE OF ENERGY

There is uncertainty regarding the ongoing need for on site power generation as
well as the uncertainty regarding the adoption of the Company's current and
future products, including its recently introduced M500 BioFuel System which it
expects to be commercially introduced by the end of 2001; and the rate of growth
of the markets for its products.

The Company's business is dependent on a market for on-site biomass power
technology, and if this market does not expand as it anticipates, or if
alternatives to its products are successful, its business will suffer.  The
market for biomass power technology is rapidly evolving and it is difficult to
predict its potential size or future growth rate.

BIOMASS FEEDSTOCK SUPPLY

The Company's technology and business model depend on the availability of
sufficient biomass feedstock.  The Company's research suggests that the
availability of feedstock and the logistics of transportation of sufficient
feedstock to customers' premises at an acceptable cost can be achieved for the
present and foreseeable future.  However, any major increase in the costs of
supplying feedstock can adversely affect the viability of the Company's business
model.  As biomass to energy technology becomes more established and the
Company's competitors prove to be successful in commercializing their technology
there is a risk that biomass feedstock such as wood chips could become
commoditized increasing the costs of supply and delivery thereby affecting the
profitability of the Company's operations.

TECHNOLOGY AND INTELLECTUAL PROPERTY

The M500 BioFuel System is the Company's proprietary technology, and the Company
is dependent on its intellectual property for the success of its business.
Without control over its intellectual property the Company may be unable to
compete, if its technology and secrets fall into the hands of competitors.  The
Company has filed for patent protection in both the United States and Canada.

The Company intends to use all efforts to maintain the integrity of its
intellectual property, however, unauthorized parties may attempt to copy or
otherwise obtain and use its technology.  Monitoring unauthorized use of M500
BioFuel System may be difficult, especially as the system is placed on
customers' premises, and it cannot be certain that the steps it has taken will
prevent unauthorized use of its technology.  The Company may also be unable to
defend its intellectual property rights in foreign countries where applicable
laws may not protect its proprietary rights as fully as in the United States. In
addition, the measures the Company undertakes may not be sufficient to
adequately protect its proprietary technology and may not preclude competitors
from independently developing products with functionality or features similar to
those of the company's technology.

<PAGE>6

Failure to adequately protect the Company's intellectual property rights could
permit others to appropriate its proprietary technology.  The unauthorized
reproduction or other misappropriation of the Company's proprietary technology
could enable third parties to benefit from its technology and brand without
paying the Company.  If this were to occur, the Company's revenues could be
materially adversely affected, and the value of the Company's mark and brand
could be diminished.  The steps the Company has taken to protect its proprietary
rights may not be adequate to deter misappropriation of proprietary information.
The Company may not be able to detect unauthorized use of its proprietary
information or take appropriate steps to enforce its intellectual property
rights.  The laws of other countries in which the Company may market its
services in the future are uncertain and may afford little or no effective
protection of the Company's intellectual property.  If the Company resorts to
legal proceedings to enforce its intellectual property rights, the proceedings
could be burdensome and expensive.  The proceedings also could involve a high
degree of risk.

Defending against intellectual property infringement claims could be time
consuming and expensive, and the Company may be liable for infringing on the
intellectual property rights of others.  If the Company is not successful in
defending against these claims, the Company could be subject to significant
damages and the disruption of its business.  Successful intellectual property
infringement claims against the Company could result in monetary liability or a
material disruption in the conduct of its business.  The Company cannot be
certain that its products, services, content and brand do not or will not
infringe valid patents, copyrights or other intellectual property rights held by
third parties.  The Company expects that infringement claims in its markets will
increase in number as more participants enter the markets.  The Company may be
subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of its business. The
Company may incur substantial expenses in defending against these third party
infringement claims, regardless of their merit.

SALES, MARKETING AND DISTRIBUTION

The Company is dependent on certain distribution channels for marketing its M500
BioFuel system to the greenhouse industry and therefore management of its
distribution relationships is essential to the Company's future success in
delivery of its technology to this industry.  The future growth of the Company's
business will depend in part on its ability to create new relationships with
partners for the commercialization of its technology in other industries, to
identify and develop additional channels for the distribution its technology and
to manage these relationships.  The Company will also look to identify and
develop relationships with additional partners that could serve as distributors
for its technology.

The Company has developed a business model to compete for customers business at
a discount to their existing energy pricing arrangements.  Competition could
lead to a decrease in its prices as well as a reduction in sales, lower margins
and decreased market share.  These and other competitive pressures could prevent
it from competing successfully against current or future competitors and could
materially harm its business.

<PAGE>7

RAW MATERIALS AND SUPPLIERS

For the most part, the Company's products are custom designed and manufactured
with certain components that can be bought "off the shelf", and are not intended
to be produced for inventory.  The Company's products are either obtained from
local sources or manufactured.  Generally, lead-time for delivery of materials
or components ordered will be delivered on time, or that the manufacture of the
component parts will be completed on time, and if that is not the case, the
manufacture of the M500 can be delayed.

MANUFACTURING

The Company has no experience manufacturing its M500 BioFuel system, and the
Company is dependent on outsourcing this function to third party manufacturers.
While the Company has effectively managed this process for individual units the
company has no experience in replicating its technology in larger quantities.
In addition, the Company has yet to sign a manufacturing agreement and may have
difficulty in procuring production of its M500 BioFuel System at required terms.
To be financially successful, it will have to manufacture its M500 BioFuel
System in commercial quantities at acceptable costs while also preserving the
quality levels and integrity achieved in manufacturing the M500 BioFuel System
in limited number.  This may present technological and engineering difficulties
for the product manufacturer that could adversely affect the results of the
Company's business.  There can be no assurance that it will be successful in
executing a satisfactory manufacturing agreement.

The Company may not be successful in concluding a manufacturing capability in
time to meet its M500 BioFuel System commercialization schedule or to satisfy
the requirements of its customers.

The Company has intentionally chosen to use only a limited number of
manufacturers to produce components for its technologies.  In the opinion of
management, the Company can have access to a readily available supply of raw
materials and components for all of its anticipated products from various
sources and does not anticipate any major difficulties in obtaining such raw
materials or components necessary for its business.

COMPETITION

The Company is not aware of any market ready direct competition, however, the
Company is aware that there are other companies throughout the world
developing or attempting to develop gasification processes, pyrolysis and
conversion of energy.  Such companies may be developing products and
technologies similar in nature to the M500 BioFuel System, and the Company
competes indirectly with companies that are developing other types of energy
technologies.  The Company is aware that many of its current and potential
competitors have longer operating histories, significantly greater resources,
broader name recognition and stronger financial assets.  As a result, these
competitors may have greater credibility with its existing and potential
customers.  They also may be able to adopt more aggressive pricing policies
and devote greater resources to the development, promotion and sale of their
products than it can to the Company's, which would allow them to respond more
quickly than it to new or emerging technologies or changes in customer
requirements.

<PAGE>8

EMPLOYEES

The Company has also expanded its staff and may continue to expand its staff
and facilities thereby increasing its expense levels in anticipation of future
gains in revenue.  If revenue does not develop as anticipated, the company
will incur losses.

The Company has undergone growth in the number of its employees over the past
year; however, if the company is to realize full commercialization of its M500
BioFuel System there will be significant expansion the size of its staff as
well as its physical facilities and the scope of its operations.  The Company
may experience difficulty in managing the expansion of its operations to
achieve its sales goals.  The Company's prospects and financial condition
could be harmed if it encounters difficulties in effectively managing the
budgeting, forecasting and other process control issues presented by such a
rapid expansion.

The Company's business and growth will suffer if it is unable to hire and
retain highly skilled personnel.  If the Company is unable to hire and retain
highly skilled personnel, its growth may be restricted, the quality of its
products and services reduced and its revenues may be reduced or grow at a
slower rate than expected.  The Company's future success depends, in large
part, on its ability to attract, train, motivate and retain highly skilled
employees.  Competition for highly skilled employees is intense.  The Company
may be unable to retain its skilled employees or attract, assimilate and
retain other highly skilled employees in the future.  The Company has, from
time to time, in the past, experienced, and it may experience in the future,
difficulty in hiring and retaining highly skilled employees with appropriate
qualifications.

The Company may not be able to effectively manage its expanding operations.
To execute its business plan and strategy, the Company must continue to grow
significantly.  If the Company is not able to expand its operations in an
efficient manner, its expenses could grow disproportionately to revenues or
its revenues could decline or grow at a slower rate than expected, either of
which could have a material adverse effect on its business, results of
operations and financial condition. The Company expects that the number of its
employees will double in the next fiscal year and may continue to increase for
the foreseeable future. The Company's growth is expected to result in
increased responsibility for both existing and new management personnel.  Such
growth has placed, and anticipated future growth combined with the
requirements the Company faces as a public company will continue to place, a
significant strain on the Company's management, operations, systems and
resources.  The Company expects that it will need to continue to improve its
financial and managerial controls and reporting systems and procedures, and
will need to continue to expand, train and manage its workforce.  The
Company's success depends to a significant extent on the ability of its
executive officers and other members of management to operate effectively both
independently and as a group.  The Company will also need to continue to
expand and maintain close coordination among its products, services and
technology, finance and administration and sales and marketing organizations.
There can be no assurance that if the Company continues to grow, management
will be effective in attracting and retaining additional qualified personnel,
expanding its physical facilities, integrating acquired businesses, if any, or
otherwise managing growth.  There can be no assurance the Company's
information systems, procedures or controls will be adequate to support its
operations or that management will be able to achieve the rapid execution
necessary to successfully offer its products and services and implement the
business plan and strategy.  The Company's future performance may also depend
on its effective integration of acquired businesses, if any.  Any such
integration, even if successful, may take a significant period of time and
expense, and may place a significant strain on the Company's resources.  If
the Company is not able to manage existing or anticipated growth, its
business, results of operations and financial condition will be materially
adversely affected.

<PAGE>9

The loss of any of key management and technical personnel or consultants could
negatively impact the Company's business.  The Company has greatly benefited
from the experience and dedication of its management personnel including Ben
Dulley, Jake Neufeld, Bruce Ramsay and with further assistance of engineering
and technical expertise and consultancy provided by Dr. David Wiles and Hans
Gostmann. The loss or departure of any of the Company's key employees could
materially adversely affect its ability to implement its business plan and
could lower its revenues or cause revenues to grow at a slower rate than
expected.  The Company's future success depends to a significant extent on the
continued service and coordination of the Company's management team.  In
addition, certain members of the management team have joined within the last
few months.  In addition, if one or more key employees join a competitor or
form a competing company, though the Company has non-competition arrangements
with each of its key employees, the Company may lose existing or potential
customers, which could have a material adverse effect on the Company's
business, results of operations and financial condition.  Though the Company
maintains confidentiality agreements with its employees, if the Company were
to lose a key employee, there can be no assurance that the Company would be
able to prevent the unauthorized disclosure or use of its procedures,
practices, new product development or customer lists.

EFFECT OF GOVERNMENTAL AND ENVIRONMENTAL PROTECTION REGULATIONS AND PERMITS

The Company may be subject to material federal, state, provincial or municipal
regulations, laws and permits for the installation and operation of its M500
units.  The Company believes that it will be able to comply in all material
aspects with all such laws and regulations to the extent that they be deemed
applicable to the Company's products with minimal resources expected to be
required by the company in so complying.

OTHER RISKS

The Company's stock price may experience extreme price and volume
fluctuations.  The market price of the Company's Common Stock has fluctuated
in the past and is likely to continue to be volatile and subject to wide
fluctuations.  The stock market in general and the market prices of shares in
energy companies have been extremely volatile and have experienced
fluctuations that have often been unrelated or disproportionate to the
operating performance of such companies.  The market price of the Company's
Common Stock may be subject to wide fluctuations in response to many factors,
some of which are largely beyond the Company's control.  These factors
include:

- quarterly variations in results of operations;
- adverse business developments;
- changes in financial estimates by securities analysts;
- investor perception of the Company and online recruiting and staffing
   services in general;
- announcements by competitors of new products and services; and
- general economic conditions both in the United States and in foreign
   countries.

<PAGE>10

Since the Company's stock price is volatile, the Company may become subject to
securities litigation, which is expensive and could result in a diversion of
resources.  Litigation brought against the Company could result in substantial
costs to the Company in defending against the lawsuit and a diversion of
management's attention.  Securities class action litigation has often been
brought against companies that experience volatility in the market price of
their securities.  Since the Company's stock price is volatile, the Company
could be subject to securities litigation and incur higher expenses than
expected, which could have a material adverse effect on its business and
results of operations.

Future sales of the Company's Common Stock may negatively affect its stock
price.  The market price of the Company's Common Stock could decline as a
result of sales of a large number of shares of Common Stock in the market or
as a result of sales by existing shareholders, or the perception that these
sales could occur.  These sales might make it more difficult for the Company
to sell equity securities in the future at a time and at a price that the
Company deems appropriate.  The certain shares of the Company's Common Stock
currently outstanding are or will become eligible for sale without
registration pursuant to Rule 144 under the Securities Act, subject to certain
conditions of Rule 144.

The Company's officers, directors and existing stockholders, whose interests may
differ from other shareholders, will have the ability to exercise significant
control over the Company.  The Company's executive officers and directors and
entities affiliated with them will, in the aggregate, beneficially own a
majority of the Company's Common Stock.  These shareholders will be able to
exercise significant influence over all matters requiring approval by the
Company's shareholders, including the election of directors and the approval of
significant corporate transactions, including a change of control of the
Company.  The interests of these shareholders may differ from the interests of
the Company's other shareholders.

<PAGE>11

ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We develop products in Canada and sell them in North America, Asia and Europe.
As a result, our financial results could be affected by factors such as changes
in foreign currency exchange rates or weak economic conditions in foreign
markets.  As most of our sales are currently made in U.S. dollars, a
strengthening of the dollar could make our products less competitive in foreign
markets.  Our interest income is sensitive to changes in the general level of
U.S. interest rates, particularly since the majority of our investments are in
short-term instruments.  We regularly assess these risks and have established
policies and business practices to protect against the adverse effects of these
and other potential exposures.  As a result, the Company does not anticipate
material losses in these areas.  Due to the nature of our short-term
investments, we have concluded that there is no material market risk exposure.
Therefore, no quantitative tabular disclosures are required.


                                    PART II

                               OTHER INFORMATION

<PAGE>12

Item 1.         Legal Proceedings.

The Registrant is not involved in any material legal proceedings.

Item 2.         Changes in Securities.

                None.


Item 3.         Defaults Upon Senior Securities.

                None.

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

                None.

Item 5.         Other Information

                None.

Item 6.         Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit
Number                          Description


2.0     Stock Exchange Agreement between Granada Mineral Products, Inc. and
        Sarenghetti Enterprises, dated may 8, 2001, incorporated by reference to
        Exhibit No. 2 to the Registrant's Form 8-K, filed May 9, 2001.

3.1     Articles of Incorporation Certificate of Amendment of Articles of
        Incorporation, incorporated by reference to Exhibit No. 3.1 to
        Registrant's Form 10SB12G, filed February 11, 2000.

3.2     By-Laws, incorporated by reference to Exhibit No. 3.2 to Registrant's
        Form 10SB12G, filed February 11, 2000.

3.3     Articles of Merger of Granada Mineral Products, Inc. and Sarenghetti
        Enterprises, dated May 8, 2001, incorporated by reference to Exhibit No.
        3 to Registrant's Form 8-K, filed May 9, 2001.


(b) Reports on Form 8-K.

A Report on Form 8-K was filed by the Registrant on September 18, 2001,
announcing that, as of September 10, 2001, the Registrant has completed the
merger reported earlier under its former name, pursuant to a Stock Exchange
Agreement (the Agreement), dated May 8, 2001, entered into with Sarenghetti
Enterprises, a Nevada corporation (SARG), which provided for the merger of SARG
with and into the Registrant which is the surviving entity, pursuant to a tax-
free reorganization in accordance with Section 354 and 368 of the Internal
Revenue Code of 1986, as amended.

<PAGE>13

SIGNATURES

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


                                              MALAHAT ENERGY CORPORATION

                                    By: /s/   BEN DULLEY
                                              ---------------------
                                              Ben Dulley, President


Dated:  June 11, 2002