UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB

(Mark one)

[X] Quarterly Report Under Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                For the quarterly period ended September 30, 2002

[ ] Transition Report Under Section 13 or 15(d) of the Securities
    Exchange Act of 1934

         For the transition period from ______________ to _____________

                         Commission File Number: 0-32829


                            Palomar Enterprises, Inc.
        (Exact name of small business issuer as specified in its charter)

       Nevada                                                  88-0470235
(State of incorporation)                                (IRS Employer ID Number)


              7898 E. Acoma Drive, Suite 209, Scottsdale, AZ 85260
                    (Address of principal executive offices)

                                 (480) 951-2537
                           (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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: November 8, 2002: 8,205,000

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]
<PAGE>
                            PALOMAR ENTERPRISES, INC.

              Form 10-QSB for the Quarter ended September 30, 2002

                                Table of Contents


                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

   Item 1.  Financial Statements                                              3

   Item 2.  Management's Discussion and Analysis or Plan of Operation        15


PART II - OTHER INFORMATION

   Item 1. Legal Proceedings                                                 18

   Item 2. Changes in Securities                                             18

   Item 3. Defaults on Senior Securities                                     20

   Item 4. Submission of Matters to a Vote of Security Holders               20

   Item 5. Other Information                                                 20

   Item 6. Exhibits and Reports on Form 8-K                                  21


SIGNATURES                                                                   21

                                       2
<PAGE>
ITEM 1 - PART 1 - FINANCIAL STATEMENTS

                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)
                                 BALANCE SHEETS
                           September 30, 2002 and 2001

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                  September 30,       September 30,
                                                                      2002                2001
                                                                  -------------       -------------
<S>                                                                 <C>                 <C>
                                     ASSETS
CURRENT ASSETS
  Cash on hand and in bank                                          $   8,768           $     176
  Advances due from officers and affiliated entities                   16,992                  --
  Prepaid expenses                                                      3,269                  --
                                                                    ---------           ---------

      TOTAL CURRENT ASSETS                                             29,029                 176
                                                                    ---------           ---------
OTHER ASSETS
  Investments in other companies                                        2,800                  --
  Deposits and other                                                    2,423                  --
                                                                    ---------           ---------

      TOTAL OTHER ASSETS                                                5,223                  --
                                                                    ---------           ---------

TOTAL ASSETS                                                        $  34,252           $     176
                                                                    =========           =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable - trade                                          $   1,778           $      --
  Accrued payroll and related liabilities                               4,193                  --
                                                                    ---------           ---------

      TOTAL CURRENT LIABILITIES                                         5,971                  --
                                                                    ---------           ---------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock - $0.001 par value
   50,000,000 shares authorized. 8,105,000 and 9,440,000
   shares issued and outstanding, respectively                          8,105               9,440
  Additional paid-in capital                                          103,738               2,360
  Deficit accumulated during the development phase                    (56,144)            (11,624)
                                                                    ---------           ---------
                                                                       55,699                 176
  Treasury stock - at cost (280,000 shares)                           (27,418)                 --
                                                                    ---------           ---------

      TOTAL STOCKHOLDERS' EQUITY                                       28,281                 176
                                                                    ---------           ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $  34,252           $     176
                                                                    =========           =========
</TABLE>


The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)
                 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
          Nine and Three months ended September 30, 2002 and 2001 and
    Period from March 10, 1999 (date of inception) through September 30, 2002

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                         Period from
                                                                                                        March 11, 1999
                                       Nine months     Nine months     Three months    Three months   (date of inception)
                                          ended           ended           ended           ended            through
                                       September 30,   September 30,   September 30,   September 30,    September 30,
                                           2002            2001            2002            2001             2002
                                       -------------   -------------   -------------   -------------    -------------
<S>                                     <C>             <C>             <C>             <C>              <C>
REVENUES                                $       --      $       --      $       --      $       --       $       --
                                        ----------      ----------      ----------      ----------       ----------
OPERATING EXPENSES
  Rent to affiliated entity                 10,000              --              --              --           10,000
  Payroll and related expenses               8,098              --           8,098              --            8,098
  Consulting, legal and
   professional fees                        14,083           2,159           2,872             920           16,242
  Other general and administrative
   expenses                                 10,663           3,159           8,997           1,822           20,304
                                        ----------      ----------      ----------      ----------       ----------
TOTAL OPERATING EXPENSES                    42,844           5,318          19,967           2,742           54,644
                                        ----------      ----------      ----------      ----------       ----------

LOSS FROM OPERATIONS                       (42,844)         (5,318)        (19,967)         (2,742)         (54,644)

OTHER INCOME
  Loss on abandonment of investments        (1,500)             --          (1,500)             --           (1,500)
                                        ----------      ----------      ----------      ----------       ----------
LOSS BEFORE PROVISION
 FOR INCOME TAXES                          (44,344)         (5,318)        (21,467)         (2,742)         (56,144)

PROVISION FOR INCOME TAXES                      --              --              --              --               --
                                        ----------      ----------      ----------      ----------       ----------

NET LOSS                                   (44,344)         (5,318)        (21,467)         (2,742)         (56,144)

OTHER COMPREHENSIVE INCOME                      --              --              --              --               --
                                        ----------      ----------      ----------      ----------       ----------

COMPREHENSIVE LOSS                      $  (44,344)     $   (5,318)     $  (21,467)     $   (2,742)      $  (56,144)
                                        ==========      ==========      ==========      ==========       ==========
Netloss per weighted- average share
 of common stock outstanding,
 calculated on Net Loss - basic and
 fully diluted                          $    (0.01)            nil             nil             nil       $    (0.01)
                                        ==========      ==========      ==========      ==========       ==========
Weighted-average number of shares
 of common stock outstanding             8,202,491       9,440,000       7,723,261       9,440,000        5,739,492
                                        ==========      ==========      ==========      ==========       ==========
</TABLE>

The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
                Nine months ended September 30, 2002 and 2001 and
   Period from March 10, 1999 (date of inception) through September 30, 2002

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                               Period from
                                                                                              March 10, 1999
                                                       Nine months         Nine months     (date of inception)
                                                          ended               ended             through
                                                       September 30,       September 30,      September 30,
                                                           2002                2001               2002
                                                       -------------       -------------      -------------
<S>                                                     <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss for the period                               $ (44,344)          $  (5,318)          $ (56,144)
  Adjustments to reconcile net loss to net cash
   provided by operating activities
    Depreciation                                               --                  --                  --
    Common stock issued for services                           --                  --               6,000
    Loss on abandonment of investments                      1,500                  --               1,500
    (Increase) Decrease in
      Prepaid expenses                                     (3,269)                 --              (3,269)
      Security deposits                                    (2,423)                 --              (2,423)
    Increase (Decrease) in
      Accounts payable - trade                              1,778                  --               1,778
      Accrued payroll and related expenses                  4,193                  --               4,193
                                                        ---------           ---------           ---------
NET CASH USED IN OPERATING ACTIVITIES                     (42,565)             (5,318)            (48,365)
                                                        ---------           ---------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES
   Cash advances to officers and affiliated entities      (26,492)                 --             (26,492)
   Repayments of cash advances to
     officers and affiliated entities                       9,000                  --               9,000
   Cash paid for investments in other companies            (3,800)                 --              (3,800)
                                                        ---------           ---------           ---------
NET CASH USED IN INVESTING ACTIVITIES                     (21,292)                 --             (21,292)
                                                        ---------           ---------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from sales of common stock                    106,500                  --             112,300
   Cash paid to acquire equity                             (5,400)                 --              (5,400)
   Cash used to purchase treasury stock                   (32,670)                 --             (32,670)
   Cash received from sale of treasury stock                4,195                  --               4,195
                                                        ---------           ---------           ---------
NET CASH USED IN FINANCING ACTIVITIES                      72,625                  --              78,425
                                                        ---------           ---------           ---------

INCREASE (DECREASE) IN CASH                                 8,768              (5,318)              8,768
Cash at beginning of period                                    --               5,494                  --
                                                        ---------           ---------           ---------

CASH AT END OF PERIOD                                   $   8,768           $     176           $   8,768
                                                        =========           =========           =========

SUPPLEMENTAL DISCLOSURE OF INTEREST AND
INCOME TAXES PAID
  Interest paid for the period                          $      --           $      --           $      --
                                                        =========           =========           =========
  Income taxes paid for the period                      $      --           $      --           $      --
                                                        =========           =========           =========
</TABLE>

The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                          NOTES TO FINANCIAL STATEMENTS

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Palomar  Enterprises,  Inc.  (Company)  was  incorporated  on March 10,  1999 in
accordance  with the laws of the State of  Nevada.  The  Company  was  initially
formed for the purpose of  developing  an aircraft  service  company for private
aircraft  owners that would offer on-site  preventative  maintenance  and repair
services.  The Company has had no substantial  operations or substantial  assets
since inception.

In November  2001, the Company  abandoned the initial  business plan and adopted
one whereby the Company will obtain  non-performing  debt owed by debtors  which
allegedly cannot be located from unrelated third-party  financial  institutions.
The  Company   anticipates   using  the  services  of  various  debtor  location
organizations to aid in the collection of the acquired debt.  During the quarter
ended September 30, 2002, the Company has been  unsuccessful  with this business
plan and is in the process of  evaluating  and  acquiring  various  interests in
other operating entities.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
adopted a year-end of December 31.

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange  Commission  on its  Annual  Report on Form  10-KSB  for the year ended
December 31, 2001.  The  information  presented  within these interim  financial
statements  may not include all  disclosures  required by accounting  principles
generally  accepted in the United  States of America and the users of  financial
information  provided for interim  periods should refer to the annual  financial
iand footnotes when reviewing the interim financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 31, 2002.

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

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented

                                       6
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE C - GOING CONCERN UNCERTAINTY

Due to the  lack  of  sustaining  operations  from  inception,  the  Company  is
considered in the  development  stage and, as such, has generated no significant
operating revenues and has incurred cumulative operating losses of approximately
$60,000.

Further,  the Company has  abandoned  its initial  business plan and a successor
business plan to support  future  operations.  During the third quarter of 2002,
the Company made nominal  investments  in other  companies to either acquire the
entity in question or to have the rights to a portion of the investee  company's
future revenue streams.
At this point in time, the ultimate success of these investments is uncertain.

The Company is fully dependent upon the available cash on hand and either future
sales of securities or upon its current management and/or advances or loans from
controlling  shareholders or corporate  officers to provide  sufficient  working
capital to preserve the integrity of the corporate entity during the development
phase.

There is no assurance that the Company will be able to obtain additional funding
through the sales of additional  securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company.
It  is  the  intent  of  management  and  controlling  shareholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.

However,  there is no legal obligation for either management and/or  controlling
shareholders to provide such additional funding.

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. CASH AND CASH EQUIVALENTS

   The Company  considers all cash on hand and in banks,  including  accounts in
   book overdraft  positions,  certificates  of deposit and other  highly-liquid
   investments  with maturities of three months or less,  when purchased,  to be
   cash and cash equivalents.

2. INVESTMENTS IN OTHER COMPANIES

   Non-equity  investments in other companies are carried at historical cost and
   evaluated quarterly for permanent impairments to carrying value in accordance
   with Statement of Financial  Accounting Standards No. 121 "Accounting for the
   Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of". Any
   permanent  impairment,  if any,  is charged to  operations  in the quarter in
   which the determination of impairment is made.

   At  September  30,  2002,  all  equity  investments  in other  companies  are
   classified as "held-to-maturity". The Company evaluates the carrying value of
   all  marketable   securities   classified  as   "held-to-maturity"  or  "othe
   investments  that  do not  have  a  readily  determinable  fair  value"  on a
   quarterly  basis  in  accordance  with  Statement  of  Financial   Accounting
   Standards No. 121  "Accounting  for the  Impairment of Long-Lived  Assets and
   Long-Lived  Assets to be Disposed of". Any permanent  impairment,  if any, is
   charged to operations in the quarter in which the determination of impairment
   is made.

                                       7
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

3. ORGANIZATION COSTS

   The Company has adopted the  provisions of AICPA  Statement of Position 98-5,
   "Reporting on the Costs of Start-Up  Activities" whereby all organization and
   initial costs incurred with the incorporation  and initial  capitalization of
   the Company were charged to operations as incurred.

4. RESEARCH AND DEVELOPMENT EXPENSES

   Research and development expenses are charged to operations as incurred.

5. ADVERTISING EXPENSES

   Advertising and marketing expenses are charged to operations as incurred.

6. INCOME TAXES

   The Company  utilizes the asset and liability method of accounting for income
   taxes.  At September  30, 2002 and 2001,  the deferred tax asset and deferred
   tax  liability  accounts,  as  recorded  when  material,  are ethe  result of
   temporary  differences.  Temporary  differences  represent differences in the
   recognition  of  assets  and  liabilities  for  tax and  financial  reporting
   purposes, primarily accumulated depreciation and amortization.

   As of September  30, 2002 and 2001,  respectively,  the deferred tax asset is
   related solely to the Cnet operating loss carryforward and is fully reserved.

7. EARNINGS (LOSS) PER SHARE

   Basic earnings (loss) per share is computed by dividing the net income (loss)
   by the  weighted-average  number of shares of common  stock and common  stock
   equivalents  (primarily  outstanding  options  and  warrants).  Common  stock
   equivalents  represent  the  dilutive  effect of the assumed  exercise of the
   outstanding stock options and warrants,  using the treasury stock method. The
   calculation of fully diluted  earnings  (loss) per share assumes the dilutive
   effect of the  exercise of  outstanding  options  and  warrants at either the
   beginning  of the  respective  period  presented  or the  date  of  issuance,
   whichever is later.  As of  September  30, 2002,  the  Company's  outstanding
   warrants are considered anti-dilutive due to the Company's net operating loss
   position.  At September 30, 2002, the Company had no warrants  and/or options
   outstanding.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

                                       8
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS - CONTINUED

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  Company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

NOTE F - ADVANCES DUE FROM OFFICERS AND AFFILIATED ENTITIES

Through September 30, 2002, the Company has advanced a net approximately $16,992
to various affiliated entities and former corporate officers as follows:

         Entity                 Advances    Repayments     Write-offs    Net due
         ------                 --------    ----------     ----------    -------
Energy River Corporation         $13,982      $(5,000)      $    --      $ 8,982
FutureCarz, Inc./Edward Heisler    7,500           --            --        7,500
Terry Neild                        4,000       (4,000)           --           --
Investment Regency Group             510           --            --          510
Hunt 1, Inc.                         500           --           500           --
                                 -------      -------       -------      -------

     Totals                      $27,549      $(9,000)      $   500      $16,992
                                 =======      =======       =======      =======

These advances are non-interest bearing and repayable upon demand.

NOTE G - INVESTMENTS IN OTHER COMPANIES

Investments in other  companies  consists of the following at September 30, 2002
and 2001:

                                    Carrying value at          Carrying value at
                                      September 30,              September 30,
     Investee company                     2002                       2001
     ----------------               -----------------          -----------------
Non-equity investments
   Monterey Venture Group, LLC           $2,800                    $    --
                                         ======                    =======

MONTEREY VENTURE GROUP, LLC

Monterey Venture Group,  LLC, dba Just Buy It Today.com,  LLC is in the business
of selling,  via the internet,  prototypes  of products  which have not yet been
mass-produced  and,  therefore,  are not  readily  available  for  sale  through
traditional  retail  channels.  Current  products in the Monterey Venture Group,
LLC's portfolio include mobile game systems,  mosquito repellent, burn spray and
foot cleaner for diabetics. The Company is obligated to make a $4,000 non-equity
working  capital  investment,  of which $2,800 has been made as of September 30,
2002.

In exchange for this investment, the Company is entitled to the following:

     Contract Year One (ending July 18, 2003):  25% of Monterey  Venture  Group,
     LLC's gross sales,  as calculated on the accrual method of accounting by an
     independent accountant and remitted to the Company no later than August 18.
     2003.

                                       9
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE G - INVESTMENTS IN OTHER COMPANIES - CONTINUED

MONTEREY VENTURE GROUP, LLC - CONTINUED

     Contract Year Two (ending July 18, 2004):  25% of Monterey  Venture  Group,
     LLC's gross sales,  as calculated on the accrual method of accounting by an
     independent accountant and remitted to the Company no later than August 18,
     2004.  However,  if Monterey  Venture Group,  LLC's gross sales in year one
     equal or exceed $500,000,  then the Company's  percentage for Year Two will
     be lowered to 15%.

     Contract Year Three (ending July 18, 2005):  25% of Monterey Venture Group,
     LLC's gross sales,  as calculated on the accrual method of accounting by an
     independent accountant and remitted to the Company no later than August 18,
     2005.  However, if Monterey Venture Group, LLC's gross sales in either year
     one or two equal or exceed $500,000, then the Company's percentage for Year
     Three will be lowered to 5%.

If Monterey Venture Group, LLC's realizes three consecutive years of gross sales
equaling or exceeding  $500,000 per year,  Monterey Venture Group, LLC will have
the right to buy the Company's investment at the fair market value as determined
by an independent appraiser.

In the event that Monterey  Venture  Group,  LLC does not realize gross sales of
$500,000 for three  consecutive  years, the Company will continue to receive 25%
of Monterey  Venture  Group,  LLC's gross sales annually until this benchmark is
reached.

NATIONAL MENDING CORP.

National Mending Corp. is in the business of cleaning up consumer credit reports
for a fee. The Company is obligated to make a $5,000 investment, of which $1,000
was made as of September 30, 2002.

In exchange for this  investment,  the Company is entitled to receive 25% of the
net profit of National Mending Corp., paid quarterly,  for a period of three (3)
years from October 5, 2002.  National  Mending Corp. has the option to terminate
the  relationship at any time after the third  anniversary date for no more than
three (3) times the initial investment by the Company in National Mending Corp.

National  Mending  Corp.  and  the  Company  share  offices.  Accordingly,  this
agreement requires the Company to furnish National Mending Corp. will all office
equipment  and  support,  as  necessary.  Further,  the Company has the right to
invoice National Mending Corp. for all direct out-of-pocket expenses incurred by
the Company outside of "reasonable and ordinary" office expenses.

National  Mending Corp.  has the right to terminate  this agreement upon 15 days
written  notice to the Company  after the third  anniversary  of this  agreement
(October  5, 2005) and the Company is entitled to receive 25% of the net profits
of National  Mending Corp. up to the effective date of termination.  The Company
has the right to terminate  the  agreement  upon 15 days written  notice at such
time that the Company determines this agreement to no longer be a cost effective
venture.

On November 8, 2002, the Company  issued a notice to terminate  this  agreement,
effective  November  23,  2002.  The Company  recognized a loss of $1,000 on the
abandonment of this investment.

                                       10
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE G - INVESTMENTS IN OTHER COMPANIES - CONTINUED

HUNT 1, INC.

On September 9. 2002, the Company executed a "Definitive (sic) Agreement between
Hunt 1, Inc. (DBA;  Executive  Associates")  International  and  Shareholders of
Palomar Enterprises, Inc., A Nevada Public Corporation.

This  agreement  requires  the Company to issue  100,000  shares of  restricted,
unregistered common stock for 100% of the issued and outstanding common stock of
Hunt 1,  Inc.  and to  place in  escrow  $50,000  cash to be used for  operating
expenses of Hunt 1, Inc. As of September  30,  2002,  the Company has issued the
100,000  shares of restricted,  unregistered  common stock and has not fulfilled
the requirement to raise the $50,000 in working capital.

On November 8, 2002, the Company  rescinded this  transaction  and cancelled the
100,000  shares of stock issued on September 9, 2002.  The Company  recognized a
loss of $500 as of September 30, 2002 as a result of rescinding this agreement.

NOTE H - INCOME TAXES

The  components  of income  tax  (benefit)  expense  for the nine  months  ended
September  30,  2002 and 2001  afor the  period  from  March 10,  1999  (date of
inception) through September 30, 2002, respectively, are as follows:

                                                               Period from
                                                              March 10, 1999
                          Nine months        Nine months    (date of inception)
                             ended              ended             through
                          September 30,      September 30,     September 30,
                              2002               2001              2002
                          -------------      -------------     -------------
     Federal:
       Current               $    --           $    --           $    --
       Deferred                   --                --                --
                             -------           -------           -------
                                  --                --                --
                             -------           -------           -------
     State:
       Current                    --                --                --
       Deferred                   --                --                --
                             -------           -------           -------
                                  --                --                --
                             -------           -------           -------

       Total                 $    --           $    --           $    --
                             =======           =======           =======

                                       11
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE H - INCOME TAXES - CONTINUED

As of September 30, 2002, the Company has a net operating loss  carryforward  of
approximately  $60,000  to offset  future  taxable  income.  Subject  to current
regulations,  this  carryforward  will  begin to expire in 2015.  The amount and
availability  of  the  net  operating  loss  carryforwards  may  be  subject  to
limitations set forth by the Internal  Revenue Code.  Factors such as the number
of shares ultimately issued within a three year look-back period;  whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the Company all enter into the annual cof allowable  annual  utilization  of the
carryforwards.

The Company's  income tax expense  (benefit) for the nine months ended September
30,  2002 and 2001 and fthe  period  from  March 10,  1999  (date of  inception)
through June 30, 2002, respectively, differed from the statutory federal rate of
34 percent as follows:

<TABLE>
<CAPTION>
                                                                                                 Period from
                                                                                                March 10, 1999
                                                            Nine months        Nine months    (date of inception)
                                                               ended              ended             through
                                                            September 30,      September 30,     September 30,
                                                                2002               2001              2002
                                                            -------------      -------------     -------------
<S>                                                          <C>                <C>                <C>
Statutory rate applied to loss before income taxes           $(16,400)          $ (1,800)          $(20,400)
Increase (decrease) in income taxes resulting from:
  State income taxes                                               --                 --                 --
  Other, including reserve for deferred tax asset              16,400              1,800             20,400
                                                             --------           --------           --------

      Income tax expense                                     $     --           $     --           $     --
                                                             ========           ========           ========
</TABLE>

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of September 30, 2002 and 2001, respectively:

                                               September 30,      September 30,
                                                  2002               2001
                                               -------------      -------------
Deferred tax assets
  Net operating loss carryforwards              $ 20,400            $  4,000
  Less valuation allowance                       (20,400)             (4,000)
                                                --------            --------

Net Deferred Tax Asset                          $     --            $     --
                                                ========            ========

During the nine months ended  September  30, 2002 and 2001,  the reserve for the
deferred  current  tax asset  increased  by  approximately  $16,400  and $1,800,
respectively.

                                       12
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE I - CAPITAL STOCK TRANSACTIONS

On April 11,  2002,  a  founding  shareholder  of the  Company  surrendered  and
cancelled  2,400,000 shares of common stock to the Company for no consideration.
The effect of this  action was to  reallocate  the par value of the  surrendered
shares to additional paid-in capital.

On May 15, 2002, the Company issued a Private  Placement  Memorandum to offer to
accredited  investors up to 2,500,000  Units at a price of $0.10 per Unit.  Each
unit shall consist of one (1) share of restricted, unregistered common stock and
a warrant to purchase an  additional  share of common  stock at a price of $1.00
per share.  In May and June 2002,  pursuant  to a Private  Placement  Memorandum
dated May 15, 2002, the Company sold an aggregate  550,000 shares of restricted,
unregistered  common  stock at a price of $0.10 per share for gross  proceeds of
$55,000. This Private Placement Memorandum expired on July 31, 2002.

On August 1, 2002,  the Company issued a Private  Placement  Memorandum to offer
accredited  investors  up to 20 Units at a price of $10,000 per Unit.  Each unit
shall consist of 100,000 shares of restricted,  unregistered  common stock and a
100,000  warrants to purchase an additional  share of common stock at a price of
$1.00 per share. This Private Placement  Memorandum expired on October 31, 2002.
The Company sold one (1) unit as prescribed by the terms and  conditions of this
Private Placement Memorandum and sold approximately eight (8) partial units.
These  transactions  caused  the  issuance  of an  aggregate  515,000  shares of
unregistered,  common stock to be sold at $0.10 per share for gross  proceeds of
$51,500 and the  issuance of  warrants to purchase up to an  additional  515,000
shares of restricted, unregistered common stock at a price of $1.00.

On  September  9.  2002,  the  Company  issued  100,000  shares  of  restricted,
unregistered common stock to acquire 100.0% of the issued and outstanding common
stock of Hunt 1, Inc., pursuant to an agreement,  previously  discussed in these
footnotes.  The  full  consideration  required  in this  agreement  has not been
fulfilled as of September 30, 2002. This transaction was valued at $4,500, which
approximates the discounted  "fair value" of the Company's  common stock,  based
upon the quoted closing price of the Company's  equity  securities,  on tdate of
this transaction.

Further, the Company's two Private Placement  Memorandums were issued outside of
the U. S.  Securities  and  Exchange  Commission's  60-day  safe  harbor for the
utilization of various  exemptions from registration under the Securities Act of
1933.  Accordingly,   the  Company  may  be  required  to  prepare  and  file  a
registration  statement on either Form S-1 or SB-2 to cover the shares of common
stock  sold  under  the May 15,  2002  and  August  1,  2002  Private  Placement
Memorandums.

NOTE J- TREASURY STOCK

The Company,  utilizing the brokerage  account of an entity  affiliated  through
common  officers  and a brokerage  account in the  Company's  name traded in the
equity  securities of the Company on the open market.  The Company  executed the
following transactions:

     August  28,  2002 -  Purchased  140,000  shares  at a  total  net  cost  of
     approximately  $14,705;  August 28,  2002 - Purchased  150,000  shares at a
     total net cost of approximately  $14,180;  September 12, 2002 - Sold 50,000
     shares for total net proceeds of  approximately  $5,252;  and September 17,
     2002 - Purchased 40,000 shares at a total net cost of approximately $3,785.

                                       13
<PAGE>
                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE J - TREASURY STOCK - CONTINUED

The Company  utilizes the specific  identification  method for all purchases and
sales,  using  the  first-in,  first-out  method.  There  was no  gain  or  loss
recognition on any  transaction  and the difference  between the net cost and/or
proceeds on the transactions utilizing the affiliated entity's brokerage account
is  accounted  for  as a net  receivable  from  the  affiliated  entity  in  the
accompanying financial statements.  The Company realized a loss of approximately
$1,057 on the September 12 sale transaction. All net gains or losses on the sale
of treasury stock is reflected as an adjustment to additional paid-in capital.

NOTE K - STOCK WARRANTS

In May and June 2002, in connection with the sale of Units pursuant to a Private
Placement  Memorandum,  dated May 15, 2002,  the Company  issued stock  warrants
(5/15/02  Warrants)  to the  purchasers  of  550,000  shares of common  stock to
purchase up to an additional 550,000 shares of restricted,  unregistered  common
stock at a price of $1.00 per share.

In August and September 2002, in connection with the sale of Units pursuant to a
Private  Placement  Memorandum,  dated August 1, 2002,  the Company issued stock
warrants  (8/1/02  Warrants) to the purchasers of 515,000 shares of common stock
to purchase  up to an  additional  515,000  shares of  restricted,  unregistered
common stock at a price of $1.00 per share.

                                                  Warrants
                                  Warrants      outstanding at
                                 originally      September 30,
                                   issued           2002         Exercise price
                                   ------           ----         --------------
5/15/02 Warrants                   550,000         550,000       $1.00 per share
8/1/02 Warrants                    515,000         515,000       $1.00 per share
                                 ---------       ---------

Totals at September 30, 2002     1,015,000       1,015,000
                                 =========       =========

                (Remainder of this page left blank intentionally)

                                       14
<PAGE>
PART I - ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

(1) CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain  statements  contained  in this  quarterly  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2) GENERAL

Palomar  Enterprises,  Inc. was incorporated in Nevada on March 10, 1999 for the
purpose of developing an aircraft  service  company for private  aircraft owners
that would offer on-site preventative maintenance and repair services.

Palomar initially intended to enter the aircraft inspection and repair business.
According to research  conducted by Industrial  Maintenance  & Plant  Operation,
aircraft  maintenance  has  shifted in focus from  overhaul  to  inspection  and
repair.  Successful aircraft  maintenance is a combination of strict scheduling,
meticulous documentation,  preventative and predictive measures and adherence to
FAA regulations.  Maintenance programs for new aircraft are developed along with
Reliability  Centered Maintenance (RCM) plans. RCM is based upon the probability
that an item will survive  without  failure to a specific  operating  age, under
specified operating  conditions and ua strict maintenance  schedule.  Predictive
maintenance  techniques provide valuable insight into an airplanes l term health
and preventative activities keep it safe and reliable.

During prior  periods,  we completed the process of  registering  our securities
with the  Securities  and  Exchange  Commission  in order to make our  financial
information equally available to investors or other interested parties.
We  obtained a listing  for public  trading of our stock on the Over the Counter
Electronic  Bulletin  Board and began to seek capital of $2,000,000  through the
sale of common stock in a private placement.  We received our initial funding of
$5,800  through  the sale of  common  stock to  investors  from  the  period  of
approximately  August 1, 2000 until  September  30,  2000.  We offered  and sold
58,000 common stock shares at $0.10 per share to non-affili private investors.

In October 2001, we issued a Press Release announcing "Palomar Enterprises, Inc.
launches new debt acquisition business". On November 26, 2001, we issued a Press
Release announcing "Palomar Enterprises, Inc. appoints Arnold Wenzloff President
and COO of New Debt  Acquisition  Venture  d/b/a Regency  Horizon  Corporation".
Further,  on January 24, 2002,  the Company  issued a Press  Release  announcing
"Palomar  Enterprises,  Inc. appoints Carl MacBride and Kyle Arneson to Board of
New Debt Acquisition Venture d/b/a Regency Horizon  Corporation;  Terry W. Neild
steps down as Interim President"

                                       15
<PAGE>
With these  announcements,  we  abandoned  the  aircraft  inspection  and repair
business and Terry Westergard resigned as a corporate officer and director.

On December 5, 2001,  we issued an aggregate  3,000,000  shares to Mr.  MacBride
(2,000,000  shares) and Mr. Arneson (1,000,000 shares) in escrow in anticipation
of a business combination transaction with a newly- corporation, Regency Horizon
Corporation. Regency Horizon Corporation,  wholly-owned by MacBride and Arneson,
was formed to create  funding to acquire a portfolio of  non-performing  debt of
previously  non-locat  debtors  from  unrelated  financial   institutions  at  a
discounted  amount.  Regency Horizon intended to build its portfolio of acquired
debt,  and  through  managing  collections,  return  exceptional  profits  on  a
proportionally  small capital investment.  Regency Horizon also had an agreement
to utilize the services of People Locator,  Inc., a debtor information  provider
for non-locatable  debtors controlled by MacBride. On February 6, 2002, we filed
a Current Report on Form 8-K to report this information.

On April 15, 2002,  we filed a Current  Report on Form 8-K to disclose  that the
proposed business  combination  transaction with Regency Horizon Corporation was
abandoned by mutual consent of all affiliated  parties and the 3,000,000  shares
issued to Mr. MacBride and Mr. Arneson in escrow in anticipation of the business
combination transaction were returned to the Company,  cancelled and returned to
unissued status.

As a result of the April 15, 2002 events,  Anthony Wiser resigned as a member of
our Board of Directors and as a corporate officer.  Terry W. Neild was appointed
as our sole officer and member of the Board of  Directors.  Concurrent  with Mr.
Wiser's  resignation,  he surrendered  2,400,000 shares of common stock owned by
him to the  Company  for no  consideration.  The  effect of this  action  was to
reallocate  the par  value  of the  surrendered  shares  to  additional  paid-in
capital.

We then planned to continue with the business  plan of acquiring  non-performing
debt from financial institutions and use the services of various debtor location
services to attempt collection of these purchased amounts.

On July 10, 2002,  the Company filed a Current Report on Form 8-K announcing the
resignation  of Terry Neild as President  and Director  and the  appointment  of
Jeffery Halbirt as President and CEO and Kim Moore as Vice President.

Since July 10, 2002,  the Company has been  evaluating  various  investment  and
acquisition  opportunities  for the Company.  We intend to remain in  compliance
with the various reporting  requirements of the Securities  Exchange Act of 1934
and to seek to complete a business acquisition transaction.

During  the  period  before we fully  develop  our  business  plan and  commence
operations,  we may be referred to as a shell corporation and as we trade on the
NASD  Bulletin  Board,  a  trading  and  reporting  shell   corporation.   Shell
corporations  have zero or nominal  assets and typically no stated or contingent
liabilities.  Private  companies  wishing to become publicly trading may wish to
merge with a shell (a reverse  merger)  whereby the  shareholders of the private
Company become the majority of the  shareholders  of the combined  Company.  The
private  Company may  purchase  for cash all or a portion of the common share of
the shell corporation from its major stockholders.
Typically,  the Board and officers of the private  Company  become the new Board
and officers of the combined  Company and often the name of the private  Company
becomes the name of the combined Company.

The Company has very limited  capital,  and it is unlikely that the Company will
be able to take  advantage  of more  than one  such  business  opportunity.  The
Company intends to seek  opportunities  demonstrating the potential of long-term
growth as opposed to short-term  earnings.  At the present time, the Company has
not identified  any business  opportunity  that it plans to pursue,  nor has the
Company  reached  any  agreement  or  definitive  understanding  with any person
concerning an acquisition.

(3) RESULTS OF OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES

The Company had no operating  revenue during the  respective  nine month periods
ended  September  30, 2002 and 2001 and for the period from March 10, 1999 (date
of inception) through September 30, 2002, respectively.

                                       16
<PAGE>
General and  administrative  expenses for the nine month periods ended September
30, 2002 and 2001 were approximately $44,000 and $5,300, respectively.  Net loss
for these periods was approximately  $(44,000) and $(5,300).  Earnings per share
for the nine months ended September 30, 2002 and 2001, was approximately $(0.01)
and nil for each respective period. Included in operating expenses for the three
months ended June 30, 2002 is $10,000 paid to an entity  controlled  by a member
of the Company's Board of Directors for office rent.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses for purposes  other than  fulfilling  the  obligations  of a
reporting  company  under the  Securities  Exchange Act of 1934 unless and until
such time that the Company begins meaningful operations.

At September 30, 2002 and 2001, respectively, the Company had working capital of
approximately $23,000 and $2,900.

Through September 30, 2002, the Company has advanced a net approximately $16,992
to various affiliated entities and former corporate officers as follows:

         Entity                  Advances    Repayments    Write-offs    Net due
         ------                  --------    ----------    ----------    -------
Energy River Corporation         $13,982      $(5,000)      $    --      $ 8,982
FutureCarz, Inc./Edward Heisler    7,500           --            --        7,500
Terry Neild                        4,000       (4,000)           --           --
Investment Regency Group             510           --            --          510
Hunt 1, Inc.                         500           --           500           --
                                 -------      -------       -------      -------

     Totals                      $27,549      $(9,000)      $   500      $16,992
                                 =======      =======       =======      =======

These advances are non-interest bearing and repayable upon demand.

In September 2002, the Company advanced approximately $2,800 to Monterey Venture
Group, LLC, dba Just Buy It Today.com, LLC.

Monterey Venture Group,  LLC, dba Just Buy It Today.com,  LLC is in the business
of selling,  via the internet,  prototypes  of products  which have not yet been
mass-produced  and,  therefore,  are not  readily  available  for  sale  through
traditional  retail  channels.  Current  products in the Monterey Venture Group,
LLC's portfolio include mobile game systems,  mosquito repellent, burn spray and
foot cleaner for diabetics. The Company is obligated to make a $4,000 non-equity
working  capital  investment,  of which $2,800 has been made as of September 30,
2002.

In exchange for this investment, the Company is entitled to the following:

     Contract Year One (ending July 18, 2003):  25% of Monterey  Venture  Group,
     LLC's gross sales,  as calculated on the accrual method of accounting by an
     independent accountant and remitted to the Company no later than August 18.
     2003.  Contract  Year Two (ending July 18, 2004):  25% of Monterey  Venture
     Group, LLC's gross sales, as calculated on the accrual method of accounting
     by an  independent  accountant  and  remitted  to the Company no later than
     August 18, 2004.  However,  if Monterey Venture Group, LLC's gross sales in
     year one equal or exceed $500,000,  then the Company's  percentage for Year
     Two will be lowered to 15%. Contract Year Three (ending July 18, 2005): 25%
     of Monterey Venture Group,  LLC's gross sales, as calculated on the accrual
     method of  accounting  by an  independent  accountant  and  remitted to the
     Company no later than August 18, 2005.  However, if Monterey Venture Group,
     LLC's gross sales in either year one or two equal or exceed $500,000,  then
     the Company's percentage for Year Three will be lowered to 5%.

If Monterey Venture Group, LLC's realizes three consecutive years of gross sales
equaling or exceeding  $500,000 per year,  Monterey Venture Group, LLC will have
the right to buy the Company's investment at the fair market value as determined
by an independent appraiser.

                                       17
<PAGE>
In the event that Monterey  Venture  Group,  LLC does not realize gross sales of
$500,000 for three  consecutive  years, the Company will continue to receive 25%
of Monterey  Venture  Group,  LLC's gross sales annually until this benchmark is
reached.

In September  2002,  the Company  advanced  $1,000 to National  Mending Corp. in
anticipation of an ongoing investment. On November 8, 2002, the Company issued a
notice to terminate  this  agreement,  effective  November 23, 2002. The Company
recognized a loss of $1,000 on the abandonment of this investment.

On September 9, 2002, the Company executed a "Definitive (sic) Agreement between
Hunt 1, Inc. (DBA;  Executive  Associates")  International  and  Shareholders of
Palomar Enterprises, Inc., A Nevada Public Corporation.

This  agreement  requires  the Company to issue  100,000  shares of  restricted,
unregistered common stock for 100% of the issued and outstanding common stock of
Hunt 1,  Inc.  and to  place in  escrow  $50,000  cash to be used for  operating
expenses of Hunt 1, Inc. As of September  30,  2002,  the Company has issued the
100,000 shares of restricted, unregistered common stock and advanced $500 of the
required $50,000 in working capital.  On November 8, 2002, the Company rescinded
this  transaction  and cancelled the 100,000 shares of stock issued on September
9, 2002.  The Company  recognized a loss of $500 as of  September  30, 2002 as a
result of rescinding this agreement and reflects the complete rescission of this
transaction as if it had occurred at September 30, 2002.

The Company did not, and has not to date,  filed a Current Report on Form 8-K to
disclose and/or discuss the respective transactions with Monterey Venture Group,
LLC, National Mending Corp. or Hunt 1, Inc., respectively.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital,  when  necessary,  to  support  and  preserve  the
integrity of the corporate  entity.  However,  there is no legal  obligation for
either  management or  significant  stockholders  to provide  additional  future
funding.  Should  this  pledge  fail to provide  financing,  the Company has not
identified any alternative  sources.  Consequently,  there is substantial  doubt
about the Company's ability to continue as a going concern.

The  Company's  need for  capital  may  change  dramatically  as a result of the
implementation of the Company's  business plan or the initiation of any business
acquisition  or  combination  transaction.  There can be no  assurance  that the
Company will identify any such business, product, technology or company suitable
for  acquisition  in the future.  Further,  there can be no  assurance  that the
Company would be successful in  consummating  any acquisition on favorable terms
or that it will be able to profitably manage the business,  product,  technology
or company it acquires.

The current  management  group may also seek,  investigate  and,  if  warranted,
acquire an interest in one or more business opportunities or ventures. As of the
date  hereof,   the  Company  has  no  operating  assets  and  has  no  business
opportunities  or ventures under  contemplation  for acquisition but proposes to
investigate  potential  opportunities  in the form of investors or entrepreneurs
with a concept  which has not yet been  placed in  operation,  or in the form of
firms which are  developing  companies in need of limited  additional  funds for
expansion into new products or services,  and which are seeking to develop a new
product or service.  The Company may also sout established  businesses which may
be  experiencing  financial or operational  difficulties  and are in need of the
limited  additional capital the Company could provide.  The Company  anticipates
that it will seek to merge with an  existing  business.  After the  merger,  the
surviving  entity will be the  Company;  however,  management  from the acquired
entity will in all likelihood  operate the Company.  There is, however, a remote
possibility  that the  Company  may  seek to  acquire  and  operate  an  ongoing
business,  in which case the existing  management might be retained.  Due to the
absence  of  capital  available  for  investment  by the  Company,  the types of
businesses  seeking to be acquired  by the Company  will no doubt be smaller and
higher risks of  businesses.  In all  likelihood,  a business  opportunity  will
involve  the  acquisition  of or merger with a  corporation  which does not need
additional  cash but which desires to establish a public  trading market for its
Common  Stock.  Accordingly,  the  Company's  ability to acquire any business of
substance may be extremely limited.

                                       18
<PAGE>
                          PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

     None

ITEM 2 - CHANGES IN SECURITIES

On April 11,  2002,  a  founding  shareholder  of the  Company,  Anthony  Wiser,
surrendered and cancelled 2,400,000 shares of common stock to the Company for no
consideration.  The effect of this action was to reallocate the par value of the
surrendered shares to additional paid-in capital.

On May 15, 2002, the Company issued a Private  Placement  Memorandum to offer to
accredited  investors up to 2,500,000  Units at a price of $0.10 per Unit.  Each
Unit shall consist of one (1) share of restricted, unregistered common stock and
a warrant to purchase an additional share at a price of $1.00 per share.

On May 22, 2002,  the Company  sold 25,000  shares of  restricted,  unregistered
common  stock and issued  25,000  warrants to purchase  an  additional  share of
restricted,  unregistered  common  stock at a price of $1.00  per share to Chris
Mendoza,  pursuant to a Private  Placement  Memorandum  dated May 15, 2002, at a
price of $0.10 per Unit for gross proceeds of $2,500.

On May 22, 2002,  the Company  sold 25,000  shares of  restricted,  unregistered
common  stock and issued  25,000  warrants to purchase  an  additional  share of
restricted, unregistered common stock at a price of $1.00 per share to Al Mayor,
pursuant to a Private  Placement  Memorandum  dated May 15, 2002,  at a price of
$0.10 per Unit for gross proceeds of $2,500.

On June 6, 2002,  the Company sold 500,000  shares of  restricted,  unregistered
common  stock and issued  500,000  warrants to purchase an  additional  share of
restricted,  unregistered  common  stock at a price of $1.00 per share to George
Howard,  pursuant to a Private  Placement  Memorandum  dated May 15, 2002,  at a
price of $0.10 per Unit for gross proceeds of $50,000.

The May 15, 2002 Private Placement Memorandum expired on July 31, 2002.

On August 1, 2002, the Company issued a Private Placement Memorandum to offer to
accredited  investors  up to 20 Units at a price of $10,000 per Unit.  Each Unit
shall consist of 100,000  shares of  restricted,  unregistered  common stock and
100,000  warrants to purchase an additional share at a price of $1.00 per share.
This Private Placement Memorandum expired on October 31, 2002.

During August and September  2002,  sold one (1) unit as prescribed by the terms
and conditions of this Private Placement Memorandum and sold approximately eight
(8) partial  units.  These  transactions  caused the  issuance  of an  aggregate
515,000 shares of  unregistered,  common stock to be sold at $0.10 per share for
gross  proceeds  of $51,500  and the  issuance  of warrants to purchase up to an
additional 515,000 shares of restricted, unregistered common stock at a price of
$1.00. The respective transactions are as follows:

August 26, 2002         Laugin Enterprises              100,000         $10,000
August 28, 2002         Gary Brennan                     75,000           7,500
August 28, 2002         Mark/Kimberly Brennan            50,000           5,000
September 3, 2002       Gerard Keehan                    50,000           5,000
September 10, 2002      Anthony Reich                    50,000           5,000
September 17, 2002      Jennifer Halbirt                 50,000           5,000
September 17, 2002      Tiffany Vasquez                  40,000           4,000
September 24, 2002      Connie Sieracki                  50,000           5,000
September 24, 2002      Reginald Schmidt                 50,000           5,000
                                                        -------         -------
    Total proceeds                                      515,000          51,500
                                                         =======
    Sales commissions                                                    (5,400)
                                                                        -------
    Net proceeds                                                        $46,100
                                                                        =======

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<PAGE>
Jennifer  Halbirt is the daughter of the Company's  President  and CEO,  Jeffery
Halbirt.

The Company notes that only the initial transaction dated August 26, 2002 was in
compliance  with  the  terms  and  conditions  related  to the  Unit  definition
contained in the August 1, 2002 Private Placement Memorandum.

Further, the Company's two Private Placement  Memorandums were issued outside of
the U. S.  Securities  and  Exchange  Commission's  60-day  safe  harbor for the
utilization of various  exemptions from registration under the Securities Act of
1933.  Accordingly,   the  Company  may  be  required  to  prepare  and  file  a
registration  statement on either Form S-1 or SB-2 to cover the shares of common
stock  sold  under  the May 15,  2002  and  August  1,  2002  Private  Placement
Memorandums.

On  September  9,  2002,  the  Company  issued  100,000  shares  of  restricted,
unregistered common stock to W.R. "Ted" Hunt to acquire 100.0% of the issued and
outstanding  common  stock of Hunt 1,  Inc.,  pursuant  to a  "Definitive  (sic)
Agreement between Hunt 1, Inc. (DBA;  Executive  Associates")  International and
Shareholders of Palomar Enterprises, Inc., A Nevada Public Corporation.

This  agreement  requires  the Company to issue  100,000  shares of  restricted,
unregistered common stock for 100% of the issued and outstanding common stock of
Hunt 1,  Inc.  and to  place in  escrow  $50,000  cash to be used for  operating
expenses of Hunt 1, Inc. As of September  30,  2002,  the Company has issued the
100,000  shares of restricted,  unregistered  common stock and has not fulfilled
the requirement to raise the $50,000 in working capital.

On November 8, 2002, the Company  rescinded this  transaction  and cancelled the
100,000  shares of stock issued on September 9, 2002.  The Company  recognized a
loss of $500 as of September 30, 2002 as a result of rescinding this agreement.

ITEM 3 - DEFAULTS ON SENIOR SECURITIES

None

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

None

ITEM 5 - OTHER INFORMATION

The Company did not, and has not to date,  filed a Current Report on Form 8-K to
disclose and/or discuss the respective transactions with Monterey Venture Group,
LLC, National Mending Corp. or Hunt 1, Inc., respectively.

Without benefit of legal counsel  consultation or discussions with the Company's
independent auditors, management of the Company, utilizing the brokerage account
of Investment Regency Group, Inc., an entity affiliated through common officers,
and a brokerage account in the Company's name traded in the equity securities of
the Company on the open market. The Company executed the following transactions:

     August  28,  2002 -  Purchased  140,000  shares  at a  total  net  cost  of
     approximately $14,705;
     August  28,  2002 -  Purchased  150,000  shares  at a  total  net  cost  of
     approximately $14,180;
     September  12,  2002 -  Sold  50,000  shares  for  total  net  proceeds  of
     approximately $4,195; and
     September  17,  2002 -  Purchased  40,000  shares  at a total  net  cost of
     approximately $3,785.

These  transactions  were not  approved by an action of the  Company's  Board of
Directors.  Further, management of the Company has not filed a Current Report on
Form 8-K to disclose the Board of Director's intentions for the Company to trade
in it's own equity securities on the open market.

The Company,  upon advise of a  representative  of it's stock  brokerage  house,
filed a Form 4 reporting the acquisition of these shares.  However,  the Company
is  obligated to file a Form 3 within 48 hours of each  acquisition  transaction

                                       20
<PAGE>
and a Form 4 within each sale  transaction.  The Company is  delinquent in these
reporting requirements as required by Sarbanes-Oxley Act of 2002, effective July
30, 2002.

The Company  utilizes the specific  identification  method for all purchases and
sales, using the first-in, first-out method.

The Company  realized a loss of  approximately  $1,057 on the  September 12 sale
transaction. All net gor losses on the sale of treasury stock is reflected as an
adjustment to additional paid-in capital.  There was no gain or loss recognition
on any  transaction in the Company's  Statement of Operations and  Comprehensive
Loss. The difference  between the net cost and/or  proceeds on the  transactions
utilizing Investment Regency Group, Inc.'s brokerage account and the actual cash
expended  or received by the Company is  accounted  for as a net  receivable  or
payable to or from Investment Regency Group, Inc. in the accompanying  financial
statements.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits

       99.1 Certification Pursuant to 18 USC, Section 1330, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002

   (b) Reports on Form 8-K

       July 10, 2002 Announcing changes in management and surrender of 2,400,000
       shares of stock by Anthony Wiser, a founding shareholder.

                                   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.

                                           PALOMAR ENTERPRISES, INC.

Dated: November 8, 2002                    By: /s/ Jeffery Halbirt
       ----------------                       ----------------------------------
                                              Jeffery Halbirt
                                              President, Chief Executive Officer
                                              and Chief Accounting Officer

                                       21