UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB





[xx]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005



Commission file Number:  0-50608



PACIFIC ALLIANCE VENTURES LTD.

(Exact name of small business issuer as specified in its charter)



Nevada

(State or other jurisdiction of incorporation or organization)



98-0414501

(I.R.S. Employer Identification Number)



Suite C102, 10000 North 31st Avenue

Phoenix, Arizona   85051   USA

(Address of principal executive offices)



(602) 252-4477

(Issuer's telephone number)





State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

20,065,135 common shares as at November 10, 2005



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



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

(check one):  Yes [  ]    No [ X ]









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PACIFIC ALLIANCE VENTURES LTD.





INDEX



PART 1.

FINANCIAL INFORMATION



Item 1.

Financial Statements



Balance Sheet as of September 30, 2005



Statement of Operations for the three and nine months ended September 30, 2005 and 2004



Statement of Stockholders Equity for the nine months ended September 30, 2005



Statements of Cash Flows for the nine months ended September 30, 2005 and 2004



Notes to Financial Statements



Item 2

Management Discussion and Analysis



Item 3

Controls and Procedures



PART II.

OTHER INFORMATION



Item 1

Legal Proceedings



Item 2

Unregistered Sales of Equity Securities and Use of Proceeds



Item 3

Defaults Upon Senior Securities



Item 4

Submission of Matters to a Vote of Security Holders



Item 5

Other Information



Item 6

Exhibits and Reports on Form 8K





SIGNATURES







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PACIFIC ALLIANCE VENTURES LTD.

BALANCE SHEET

September 30, 2005

(Unaudited)

|                     |                                                        |                                                  |              |                                      |             
|-------------------- | ------------------------------------------------------ | ------------------------------------------------ | ------------ | ------------------------------------ | ------------
|                     |                                                        |                                                  |              | ASSETS                               |             
|Current Assets       |                                                       
|                     | Cash                                                   |                                                  | $    216,443
|                     |                                                        |                                                  |              | Total current assets                 | $    216,443
|                     |                                                        |                                                  |              | LIABILITIES AND STOCKHOLDERS' EQUITY |             
|Current Liabilities  |                                                       
|                     | Accounts payable                                       | $             28                                
|Stockholders' Equity |                                                       
|                     | Common stock, par value $.0005, authorized 100,000,000 |                                                 
|                     |                                                        | shares; issued and outstanding 20,065,135 shares | 10,032      
|                     | Additional paid-in capital                             | 214,358                                         
|                     | Retained deficit                                       | (7,975)                                         
|                     |                                                        |                                                  |              |                                      | 216,415     
|                     |                                                        |                                                  |              |                                      | $    216,443
|                     |                                                        |                                                  |              |                                      |             





See Notes to Financial Statements



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4







PACIFIC ALLIANCE VENTURES LTD.

STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2005 and 2004

(Unaudited)

|                                                     |                       |                |                      |                 |                                       |               |                                       |               |                                      |  |                                     
|---------------------------------------------------- | --------------------- | -------------- | -------------------- | --------------- | ------------------------------------- | ------------- | ------------------------------------- | ------------- | ------------------------------------ |  | ------------------------------------
|                                                     |                       |                |                      |                 | Three Months Ended
September 30, 2005 |               | Three Months Ended
September 30, 2004 |               | Nine Months Ended
September 30, 2005 |  | Nine Months Ended
September 30, 2004
|Revenues                                             |                       |                |                      |                 |                                       |               |                                      
|                                                     | Marketing income      | $        7,500 |                      | $             - |                                       | $      59,700 |                                       | $      33,800
|                                                     | Interest income       | 153            |                      |                 |                                       | 153           |                                       |              
|                                                     |                       |                |                      |                 | 7,653                                 |               | -                                     |               | 59,853                               |  | 33,800                              
|Expenses                                             |                       |                |                      |                 |                                       |               |                                      
|                                                     | Copywriting           | -              |                      | -               |                                       | 44,700        |                                       | 20,000       
|                                                     | Professional services | 11,089         |                      | 4,913           |                                       | 22,455        |                                       | 11,249       
|                                                     | Salaries              | 3,000          |                      | 3,000           |                                       | 9,000         |                                       | 9,000        
|                                                     | Other                 |                | 1,947                |                 | 1,955                                 |               | 4,974                                 |               | 7,149                               
|                                                     |                       |                |                      |                 | 16,036                                |               | 9,868                                 |               | 81,129                               |  | 47,398                              
|                                                     |                       |                |                      | Net loss        | $    (8,383)                          |               | $      (9,868)                        |               | $    (21,276)                        |  | $   (13,598)                        
|Basic and diluted net loss per common share          | $             (0.00)  |                | $             (0.00) |                 | $             (0.00)                  |               | $             (0.00)                 
|Weighted average number of common shares outstanding | 20,065,135            |                | 19,810,200           |                 | 19,977,355                            |               | 19,810,200                           
|                                                     |                       |                |                      |                 |                                       |               |                                       |               |                                      |  |                                     





See Notes to Financial Statements



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5







PACIFIC ALLIANCE VENTURES LTD.

STATEMENT OF STOCKHOLDERS' EQUITY

For the Nine Months Ended September 30, 2005

(Unaudited)

|                             |            |  |              |  |               |  |               |  |                             |  |                             |  |                           
|---------------------------- | ---------- |  | ------------ |  | ------------- |  | ------------- |  | --------------------------- |  | --------------------------- |  | --------------------------
|                             |            |  |              |  | Common Shares |  | Common
Stock  |  | Additional 
Paid-in Capital |  | Retained Earnings (Deficit) |  | Total Stockholders' Equity
|
|
|
|
|Balances, December 31, 2004  | 19,810,200 |  | $      9,905 |  | $     87,018  |  | $     13,301  |  | $    110,224               
|Common stock issued for cash | 254,935    |  | 127          |  | 127,340       |  |               |  | 127,467                    
|Net loss for the period      |            |  |              |  |               |  | (21,276)      |  | (21,276)                   
|Balances, September 30, 2005 | 20,065,135 |  | $     10,032 |  | $   214,358   |  | $     (7,975) |  | $    216,415               
|                             |            |  |              |  |               |  |               |  |                             |  |                             |  |                           







See Notes to Financial Statements



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PACIFIC ALLIANCE VENTURES LTD.

STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2005 and 2004

(Unaudited)

|                                     |                                                         |                              |                |                                      |          |  |         
|------------------------------------ | ------------------------------------------------------- | ---------------------------- | -------------- | ------------------------------------ | -------- |  | --------
|                                     |                                                         |                              |                |                                      | 2005     |  | 2004    
|Cash Flows from Operating Activities |                                                         |                              |               
|                                     | Net loss                                                | $     (21,276)               |                | $     (13,598)                      
|                                     | Adjustment to reconcile net loss to net cash flows from |                              |               
|                                     |                                                         | operating activities         |                |                                      |         
|                                     |                                                         | Decrease in receivables      | 3,185          |                                      |         
|                                     |                                                         | Decrease in prepaids         | 1,029          |                                      |         
|                                     |                                                         | Increase in accounts payable | 28             |                                      |         
|                                     |                                                         | Decrease in taxes payable    |                |                                      | (6,689) 
|                                     |                                                         |                              |                | Cash flows from operating activities | (17,034) |  | (20,287)
|Cash Flows from Financing Activity   |                                                         |                              |               
|                                     | Cash received on common stock subscription              | 127,467                      |                | 4,584                               
|                                     |                                                         |                              |                | Net change in cash                   | 110,433  |  | (15,703)
|Cash at the beginning of the period  | 106,010                                                 |                              | 130,393       
|Cash at the end of the period        | $    216,443                                            |                              | $    114,690  
|Cash paid for income taxes           | $             50                                        |                              | $        8,117
|                                     |                                                         |                              |                |                                      |          |  |         







See Notes to Financial Statements



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NOTES TO FINANCIAL STATEMENTS







Note 1.  Organization and Significant Accounting Policies



Organization



Pacific Alliance Ventures Ltd. ("the Company") was formed October 20, 2003, and is a marketing and advertising service provider.  The Company designs marketing and advertising campaigns for corporate clients wishing to increase awareness of their products, services, corporate image and general corporate branding.



The Company conducts its business through offices in Phoenix, Arizona, and Vancouver, British Columbia, and intends to gradually increase its availability to corporate clients across North America.  The Company works with a number of freelance designers, writers, and editors who enable the Company to react to customer demands without the need to incur large fixed overhead costs.



The Company's offices are currently provided on a rent free basis by the President and Chief Executive Officer of the Company.  Due to limited Company operations, any facilities expenses are not material and have not been recognized in these financial statements.



The Company designs marketing and branding campaigns in conjunction with its clients and relies on its ability to custom-design marketing solutions in response to client's needs to secure additional business.



Interim Period Financial Statements



The interim period financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC").  Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such SEC rules and regulations.  The interim period financial statements should be read together with the audited financial statements and accompanying notes included in the Company's audited financial statements for the year ended December 31, 2004.  In the opinion of the Company, the unaudited financial statements contained herein contain all adjustments (consisting of a normal recurring nature) necessary to present a fair statement of the results of the interim period presented.



Revenue Recognition



As marketing service agreements are relatively short-term in nature, revenue is recognized when agreements are complete.  Any costs incurred on agreements in process are deferred until the agreement is complete.  Also, any advance payments from customers are deferred until the agreement is complete.  Completion of marketing service agreements occurs when the customer has approved and accepted the advertising materials.



See Notes to Financial Statements



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All revenue in the nine months ended September 30, 2005, was from two customers, one of which is a company owned in part by an officer and director of the Company.



Earnings per Share



Basic income (loss) per share is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding in the period.  On February 21, 2005, the Board of Directors approved a 2-for-1 split of the Company's stock.  The accompanying financial statements are presented on a post-split basis.  Earnings per share for all periods presented have been adjusted accordingly.  Diluted earnings per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive common shares.  There were no potentially dilutive securities during the periods ended September 30, 2005 and 2004.



Comprehensive Income



There are no reconciling items between the net loss presented in the Statements of Operations and comprehensive loss as defined by Statement of Financial Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive Income."



Stock-Based Compensation



The Company has no stock-based compensation arrangements.  Should it enter into these types of arrangements, the Company intends to follow the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations.  Compensation cost for stock options granted to non-employees will be measured using the Black-Scholes valuation model at the date of grant multiplied by the number of options granted, amortized over the estimated life of the option.  This compensation cost will be recognized ratably over the vesting period.  This accounting policy will change with the adoption of SFAS No. 123(R), which will be effective beginning with the first interim reporting period after 2005.















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MANAGEMENT DISCUSSION AND ANALYSIS



The following Managements Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, as described below.  Pacific Alliance Ventures Ltd. (the Company, we, or us) actual results could differ materially from those anticipated in these forward-looking statements.  The following discussion should be read in conjunction with the unaudited interim financial statements and notes thereto included in Part I  Item 1 of this Quarterly report, and the audited financial statements and notes thereto and the Management Discussion and Analysis or Plan of Operations included in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004.



Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.



Forward-Looking Statements



This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.



Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.



Overview



We are a Nevada corporation incorporated on October 20, 2003.  We are in the publishing and marketing business.  We do not conduct research or development but sub-contract all actual production.  Our primary target is mid-sized companies trying to build brand, product and/or service recognition for their product, services and companies.  These mid-sized companies are large enough to be able to fund significant marketing efforts, yet small enough to be aware that they need to differentiate themselves from their competitors in order to excel in their particular market sectors.  Because of our limited human resources, we are not able to focus on any single industry and must accept clients from all industries.



Because of the size and evolution of our clients, they usually do not have more than one person in their own companies devoted to marketing and promotions.  They are aware of their marketing needs, but not able to fulfill those needs internally.  This is different from larger companies that frequently are capable of designing and fulfilling their marketing and advertising requirements in-house; or smaller companies that are not sufficiently large to develop the budgets required for effective direct marketing campaigns.



Thus, our services fit a real need for marketing expertise.  Our attention to detail and custom-designed advertising programs are generally beyond the capabilities of any of our clients to perform in-house.



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Our potential clients can exist in any business sector that relies on an appeal to individual retail customers or end-users of a product or service, or in any business that wishes to improve their public image or build their brand awareness in their particular marketplace.  For this reason, our clients could span virtually all business sectors.



Critical Accounting Policies



Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which except for lack of all detailed note disclosures, have been prepared in conformity with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, we evaluate these estimates, including those related to impairment or disposal of long-lived assets, contingencies and litigation.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.



We consider the following accounting policy to be both those most important to the portrayal of our financial condition and require the most subjective judgment:



- Revenue recognition



Revenue recognition:



The Company generates all of its revenue from marketing and advertising sales.  All significant marketing projects commence when a sizable deposit has been made by the client.  We do not incur significant external expenses, nor do we contractually expose ourselves to significant external expenses with subcontractors, until such time as performance payments from our clients are received.  We expect each contract to approximate the following schedule: a progress payment of 10% received at signing of contract; another progress payment of 30% received when the intellectual advertising material has been created and accepted by the client; another progress payment of 30% received before printing and production; and a final progress payment of 30% received before delivery to the U.S. Post Office.  Accordingly, we generally are not exposed to significant cash flow risks.



As marketing service agreements are relatively short-term in nature, revenue is recognized when agreements are complete.  We record revenue when it is actually received.  Expenses such as printing and postage are not incurred until our client has submitted progress payments to cover such expenses.  Revenue received is not refundable to the client and we do not make performance claims that could expose us to future liabilities.



Because we do not actually print or produce hard goods, we have no significant capital equipment costs.  Instead, our costs are mostly associated with the contracting out of services and production after we have already received payment from a client.



Since we generally offer a fixed price to our clients, there is a risk that we could underestimate our costs to perform such work and thus complete any given project at a loss.  If we were to be exposed to sudden cost volatility and our costs to complete printing, design and editing were to rise sharply, there is no assurance we could obtain additional project funds from our clients.  We generally do not require extended periods of time to execute our contracts and believe cost volatility is an acceptable business risk.



RESULTS OF OPERATIONS





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Revenue



Revenue was $7,500 for the quarter ended September 30, 2005.  We had no revenue during the same period in 2004.  Our business is still developing and is project based.  Our revenues may vary greatly from quarter to quarter and year to year.  Management of our company is continually sourcing new business, however, we have not yet embarked on a marketing program which could drive more business to our company.  Until we have engaged an aggressive marketing program, it is likely that we will have considerable variations in our revenue and business from quarter to quarter and year to year.



General and Administrative Expenses



General and administrative expenses consist primarily of salary for our Chief Executive Officer, legal and professional fees and other general corporate and office expenses.  General and administrative expenses including taxes and licenses, professional services and salaries were $16,036 for the quarter ended September 30, 2005.  General and administrative expenses for the same period in 2004 were $9,868.  Professional services accounted for most of the increase in general and administrative costs over the comparable period from 2004.



Product Research and Development



Management is re-evaluating our current business plan to design a strategy for maximizing our long term growth.  To date, most of our business has occurred through word of mouth and referrals from past clients.  Management is considering employing some of our cash reserves to start marketing our company in new regional markets in the United States.



Purchase of Significant Equipment



We do not intend to purchase any significant equipment over the next 12 months.  We intend to continue sub-contracting all of our actual production over the next 12 months.



Employees



We will continue to employ our Chief Executive Officer for the next 12 months.  We do not expect any material changes in the number of employees over the next 12 months.  We do and will continue to outsource contract employment as needed.



ITEM 3. - Controls and Procedures.



(a)

Evaluation of disclosure controls and procedures.



As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company carried out an evaluation under the supervision and with the participation of the Company's management, including the President and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures as of September 30, 2005.  In designing and evaluating the Company's disclosure controls and procedures, the Company and its management recognize that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives.  Additionally, in evaluating and implementing possible controls and procedures, the Company's management was required to apply its reasonable judgment.  Furthermore, in the course of this evaluation, management considered certain internal control areas, in which we have made and are continuing to make changes to improve and enhance controls.  Based upon the required evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that as of September 30, 2005, the Company's disclosure controls and procedures were effective (at the "reasonable assurance" level mentioned above) to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.





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From time-to-time, the Company and its management have conducted and will continue to conduct further reviews and, from time to time put in place additional documentation, of the Company's disclosure controls and procedures, as well as its internal control over financial reporting.  The Company may from time to time make changes aimed at enhancing their effectiveness, as well as changes aimed at ensuring that the Company's systems evolve with, and meet the needs of, the Company's business.  These changes may include changes necessary or desirable to address recommendations of the Company's management, its counsel and/or its independent auditors, including any recommendations of its independent auditors arising out of their audits and reviews of the Company's financial statements.  These changes may include changes to the Company's own systems, as well as to the systems of businesses that the Company has acquired or that the Company may acquire in the future and will, if made, be intended to enhance the effectiveness of the Company's controls and procedures.  The Company is also continually striving to improve its management and operational efficiency and the Company expects that its efforts in that regard will from time to time directly or indirectly affect the Company's disclosure controls and procedures, as well as the Company's internal control over financial reporting.



(b)

Changes in internal controls.



There were no significant changes in the Company's internal controls or other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation.



PART II

OTHER INFORMATION



Item 1.

LEGAL PROCEEDINGS



We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.



Item 2

UNREGISTERED SALES OF EQUITY SECURITIES

AND USE OF PROCEEDS



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



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(a)

Exhibits



31.1

Section 302 Certification of Chief Executive Officer

31.2

Section 302 Certification of Chief Financial Officer

32

Section 906 Certification



(b)

Reports on Form 8-K



The Issuer did not file any Form 8-Ks during the quarter ended September 30, 2005.





SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



PACIFIC ALLIANCE VENTURES LTD.





Dated:  November 10, 2005

Per:

/s/Gerald R Tuskey

Gerald R. Tuskey,

C.F.O., Secretary, Treasurer and Director