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 JUNE 30, 2004



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:
9,905,100 common shares as at June 30, 2004







Transitional Small Business Disclosure Format (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 June 30, 2004



Statements of Operations for the
three and six months ended June 30, 2004



Statement of Stockholders' Equity for the
six months ended June 30, 2004



Statements of Cash Flows for the
six months ended June 30, 2004



Notes to Financial Statements



Item 2

Plan of Operation



Item 3

Controls and Procedures



PART II.

OTHER INFORMATION



Item 1

Legal Proceedings



Item 2

Changes in Securities and Small Business Issuer

Purchases of Equity Securities



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

June
30, 2004

(Unaudited)

|                           |                                                             |                                                       |                         | ASSETS                                     |                         |  | 
|-------------------------- | ----------------------------------------------------------- | ----------------------------------------------------- | ----------------------- | ------------------------------------------ | ----------------------- |  | 
|Current
      Assets       |                                                             |                                                       |                         |                                           
|                           | Cash                                                        |                                                       | $
              124,153 |                                            |                         | 
|                           |                                                             |                                                       |                         | LIABILITIES
      AND STOCKHOLDERS' EQUITY |                         |  | 
|Current
      Liabilities  |                                                             |                                                       |                         |                                           
|                           | Taxes
      payable                                         | $
                     565                            |                         |                                            |                        
|Stockholders'
      Equity |                                                             |                                                       |                         |                                           
|                           | Common
      stock, par value $.001, authorized 100,000,000 |                                                       |                         |                                            |                        
|                           |                                                             | shares;
      issued and outstanding 9,905,100 shares | 9,905                   |                                            |                         | 
|                           | Additional
      paid-in capital                            | 87,018                                                |                         |                                            |                        
|                           | Retained
      earnings                                     | 27,081                                                |                         |                                            |                        
|                           |                                                             |                                                       |                         |                                            | 124,004                 |  | 
|                           | Stock
      subscriptions receivable                        | (416)                                                 |                         |                                            |                        
|                           |                                                             |                                                       |                         |                                            | 123,588                 |  | 
|                           |                                                             |                                                       |                         |                                            | $
              124,153 |  | 



See
Notes to Financial Statements



1

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PACIFIC
ALLIANCE VENTURES LTD.

STATEMENTS
OF OPERATIONS

For
the Three and Six Months Ended June 30, 2004

(Unaudited)



|                                                  |                                |           |                                |                         | Three
      Months Ended
      June 30, 2004 |  | Six
      Months Ended
      June 30, 2004
|------------------------------------------------- | ------------------------------ | --------- | ------------------------------ | ----------------------- | -------------------------------------------- |  | ------------------------------------------
|Revenues,
      marketing income                  | $
                      33,800 |           | $
                      33,800
|Expenses                                          |                                |           |                                |                        
|                                                  | Professional
      services    | 486       |                                | 6,878                  
|                                                  | Salaries                       | 3,000     |                                | 6,000                  
|                                                  | Tax
      and licenses         | 254       |                                | 706                    
|                                                  | Creative
      design          | 4,456     |                                | 4,456                  
|                                                  | Copy
      writing             | 20,000    |                                | 20,000                 
|                                                  | Other                          |           | 11                             |                         | 32                                          
|                                                  |                                |           |                                | Net
      income (loss) | $
                        5,593              |  | $
                      (4,272)           
|Basic
      and diluted net loss per common share | $
                      0.00   |           | $
                   (0.00)   
|Weighted
      average number of common shares    |                                |           |                               
|                                                  | outstanding                    | 9,905,100 |                                | 9,905,100              



| | 
| | 







See
  Notes to Financial Statements



2

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PACIFIC
  ALLIANCE VENTURES LTD.

STATEMENT
  OF STOCKHOLDERS' EQUITY

For
  the Six Months Ended June 30, 2004

(Unaudited)





|                                           |           |  |                           |  | Common
        Shares    |  | Common
        Stock     |         | Additional
        Paid-in Capital |  | Retained
        Earnings |         | Stock
        Subscriptions Receivable |  | Total
        Stockholders' Equity
|------------------------------------------ | --------- |  | ------------------------- |  | ------------------------ |  | ------------------------ | ------- | ---------------------------------- |  | ------------------------- | ------- | -------------------------------------- |  | ----------------------------------
|                                          
|                                          
|                                          
|                                          
|Balances,
        December 31, 2003        | 9,905,100 |  | $
                  9,905 |  | $
                87,018 |  | $
                31,353 |         | $
                (5,000)          |  | $
              123,276  
|Cash
        received on subscribed common |           |  |                           |  |                          |  |                          |         |                                    |  |                          
|                                           | stock     |  |                           |  |                          |  |                          |         |                                    |  | 4,584                     |         | 4,584                                 
|Net
        loss                           |           |  |                           |  |                          |  |                          | (4,272) |                                    |  |                           | (4,272)
|Balances,
        June 30, 2004            | 9,905,100 |  | $
                  9,905 |  | $
                87,018 |  | $
                27,081 |         | $
                   (416)         |  | $
              123,588  
|                                           |           |  |                           |  |                          |  |                          |         |                                    |  |                           |         |                                        |  |                                   







See
  Notes to Financial Statements



3

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PACIFIC
  ALLIANCE VENTURES LTD.

STATEMENT
  OF CASH FLOWS

For
  the Six Months Ended June 30, 2004

(Unaudited)





|Cash
        Flows From Operating Activities |                                                                               
|-------------------------------------------- | ------------------------------------------------------------------------------
|                                             | Net
        loss                                                              
|                                             | Adjustment
        to reconcile net loss to net cash from operating activities
|                                             |                                                                               
|                                             |                                                                               
|Cash
        Flows From Financing Activity   |                                                                               
|                                             | Cash
        received on subscribed common stock                              
|                                             |                                                                               
|Cash
        at the beginning of the period  | 130,393                                                                       
|Cash
        at the end of the period        | $
                124,153                                                     
|Cash
        paid for income taxes           | $
                    8,117                                                   









See
  Notes to Financial Statements



4

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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 period ended December 31, 2003.  In the
  opinion of the Company, the unaudited financial statements contained herein
  contain all adjustments 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.



5

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Earnings
  per Share



Basic
  income or loss per share is computed by dividing net income or loss available
  to common shareholders by the weighted average number of common shares
  outstanding in the period.  Diluted earnings per share takes into
  consideration common shares outstanding (computed under basic earnings per
  share) and potentially dilutive securities.  There were no potentially
  dilutive securities during the six month period ended June 30, 2004.



Comprehensive
  Income



There
  are no reconciling items between the net loss presented in the Statements of
  Operations and comprehensive loss as defined by 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.





6

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PLAN OF OPERATIONS



Our current working capital of approximately $124,000 is sufficient to fund the continuing operations and expansion of our business for the next 12 months.  It is also sufficient to pay the expenses associated with our reporting company obligations including increased accounting and legal fees.



We do not anticipate requirement for major capital expenditures during the next 12 months related to our ongoing business.  We do not conduct research and development and subcontract all actual production. Existing casual relationships with freelance designers and editors and their attendant costs are expected to remain relatively constant due to normal marketplace competition.  Costs for these services differ depending on the individual project with such variables as the number of pages, types of printing, number of colors, etc, all affecting the cost of any given project.  As a general guide, costs of US$1,000 per page for editors and US$500 per page for design are typical.  We have sufficient office space to accommodate existing and expanded operations for the next 12 months.



Contract employees are hired as needed.  There are no immediate plans to hire permanent employees.  We do not store goods in warehouses as this is a function performed by the commercial printers whom we engage to produce and distribute our advertising materials.



The following is a discussion of our general plan of operation for the next 12 months.  This plan of operation will be implemented by our C.E.O. and is based on her prior experience in the publishing and marketing industries.



Our primary target market is mid-sized companies trying to build brand, product and/or service recognition for their products, 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 any industry.  There is a risk that our lack of industry focus could be construed by potential clients as a lack of expertise in their particular industry.



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.



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.



Our cost of sales varies depending on the type of services or the exact type of work we are performing.  In general terms, if we propose work that specifies the provision of creative ideas, artwork and design, then we obtain non-binding price estimates from a number of potential sub-contractors to perform those functions, add a suitable and competitive administration fee and profit margin, before submitting the proposal to our potential client.  Our fees and profit margins are as aggressive at any given time as we feel the market will bear.  Those specific fees and margins might be stronger or weaker depending on many

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factors including but not limited to; general economic activity; advertising and marketing activity; number and quality of vendors offering marketing and advertising services; number and quality of subcontractors offering specified services; market prices of raw goods needed by subcontractors, such as trucking costs; paper and ink costs; US Postal rates; and other factors.



Growth



We are a young company although we have seasoned professionals as management.  We have a limited operating history and have relied on a small number of contracts.  Despite our limited operating history we have generated positive cash flow and net income.  Our present financial condition is stable and we expect to be able to operate profitably in the future.



In our next 12 months of operation, our primary focus will be to solidify our market share in the Southwest United States.  We would like to target the retail sales industry to be able to supply some of its marketing and advertising needs because of its pervasive scope.  We have not yet made meaningful progress penetrating this industry.  Our secondary focus will be to initiate our business presence in new geographic regions in other areas of North America, initially through an internet build-up, and eventually through the opening of additional sales offices.



Management expects to be able to maintain current creative control and head office functions in our existing Phoenix office.  Because our business model currently relies on strong and diverse relationships with various subcontractors and freelance professionals, we believe we can accommodate expected growth rates with little or no requirements for additional capital or infrastructure.



Our rate of expected growth cannot be determined because it relies in large part on the general strength of the overall economy and the advertising and marketing needs of divergent sectors within the broader economy.  Fundamentally, it is the rates of growth and sales of our clients that determines our potential growth rate.  Eventually our rate of growth could slow, based on the demands upon the time of our key personnel.  If our revenue and project growth exceeds the capacity of current management to properly execute future marketing projects, then we will need to determine whether to engage additional full time senior management at that time.



Management considers its current ability to provide exceptional customer service with creative intellectual capital to be our strongest asset.  As long as we continue to deliver these attributes to clients, we believe our business can grow successfully.



Sales and Payment



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.  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.

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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.  We have already achieved our first major milestone which was completion of a large advertising contract and are currently working on two smaller contracts.  This includes receiving progress payments; working with subcontractors including editor; designer; printer; and shipper; and, receiving final payment.  Our first large contract was successfully performed from start to finish in less than 90 days, which we expect to be typical of potential new contracts in the future.  In the future, we expect to be able to secure additional similar contracts, the exact completion time for which would be determined at the time of contract negotiations.  We would expect future completion periods to be approximately 90 days.



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.



Inventory and Shipping



We do not warehouse any kind of inventory because we provide mainly intellectual services, with actual finished goods provided by subcontractors.  Delivery of advertising medium is generally achieved via U.S. Post.



Item 3 - Controls and Procedures



Our C.E.O. and C.F.O. have concluded that our controls and other procedures designed to ensure that information required to be disclosed in reports that we submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms are effective, based upon their evaluation of these controls and procedures as of a date within 90 days of the filing date of this Form 10-QSB.



There were no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of this evaluation, including any corrective actions with regard to significant deficiencies and weaknesses.



PART II

OTHER INFORMATION



Item 1.

LEGAL PROCEEDINGS



None



Item 2

CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER

PURCHASES OF EQUITY SECURITIES



None



Item 3

DEFAULTS UPON SENIOR SECURITIES



None

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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



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



None



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:  August 12, 2004

Per:

/s/Gerald R. Tuskey



Gerald R. Tuskey,

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