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 MARCH 31, 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)


             8930 E. Raintree Drive, Suite 100, Scottsdale AZ 85260
                    (Address of principal executive offices)


                                 (480) 444-0081
                           (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: May 7, 2002: 9,440,000

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

                Form 10-QSB for the Quarter ended March 31, 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        10

PART II - OTHER INFORMATION

   Item 1 - Legal Proceedings                                                12

   Item 2 - Changes in Securities                                            12

   Item 3 - Defaults on Senior Securities                                    12

   Item 4 - Submission of Matters to a Vote of Security Holders              13

   Item 5 - Other Information                                                13

   Item 6 - Exhibits and Reports on Form 8-K                                 13

SIGNATURES                                                                   13

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

                            PALOMAR ENTERPRISES, INC.
                          (a development stage company)
                                 BALANCE SHEETS
                             March 31, 2002 and 2001

                                   (UNAUDITED)

                                                           March 31,   March 31,
                                                             2002        2001
                                                           --------    --------
                                     ASSETS
CURRENT ASSETS
   Cash on hand and in bank                                $     --    $  3,515
                                                           --------    --------

     TOTAL CURRENT ASSETS                                        --       3,515
                                                           --------    --------

TOTAL ASSETS                                               $     --    $  3,515
                                                           ========    ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable - trade                                $    863    $     --
                                                           --------    --------

     TOTAL CURRENT LIABILITIES                                   --          --
                                                           --------    --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock - $0.001 par value 50,000,000
     shares authorized. 9,440,000 shares
     issued and outstanding, respectively                     9,440       9,440
   Additional paid-in capital                                 3,860       2,360
   Deficit accumulated during the development phase         (14,163)     (8,285)
                                                           --------    --------

     TOTAL STOCKHOLDERS' EQUITY                                (863)      3,515
                                                           --------    --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $     --    $  3,515
                                                           ========    ========

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
                 Three months ended March 31, 2002 and 2001 and
     Period from March 10, 1999 (date of inception) through March 31, 2002

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      Period from
                                                                                    March 10, 1999
                                                     Three months   Three months  (date of inception)
                                                         ended          ended           through
                                                       March 31,      March 31,        March 31,
                                                         2002           2001             2002
                                                     -----------    -----------       -----------
<S>                                                  <C>            <C>              <C>
REVENUES                                             $        --    $        --       $        --
                                                     -----------    -----------       -----------
OPERATING EXPENSES
   Selling expenses                                           --             --                --
   General and administrative expenses                     2,363          1,979            14,163
                                                     -----------    -----------       -----------

     TOTAL OPERATING EXPENSES                              2,363          1,979            14,163
                                                     -----------    -----------       -----------

LOSS FROM OPERATIONS                                      (2,363)        (1,979)          (14,163)

OTHER INCOME                                                  --             --                --
                                                     -----------    -----------       -----------

LOSS BEFORE PROVISION
   FOR INCOME TAXES                                       (2,363)        (1,979)          (14,163)

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

NET LOSS                                                  (2,363)        (1,979)          (14,163)

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

COMPREHENSIVE LOSS                                   $    (2,363)   $    (1,979)      $   (14,163)
                                                     ===========    ===========       ===========

Net loss per weighted-average share
   of common stock outstanding, calculated
   on Net Loss - basic and fully diluted                     nil            nil       $     (0.18)
                                                     ===========    ===========       ===========

Weighted-average number of shares
   of common stock outstanding                         9,440,000      9,440,000         5,435,412
                                                     ===========    ===========       ===========
</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
                 Three months ended March 31, 2002 and 2001 and
     Period from March 10, 1999 (date of inception) through March 31, 2002

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      Period from
                                                                                     March 10, 1999
                                                   Three months    Three months   (date of inception)
                                                      ended            ended            through
                                                     March 31,       March 31,         March 31,
                                                       2002            2001              2002
                                                     --------        --------          --------
<S>                                                  <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss for the period                           $ (2,363)       $ (1,979)         $(14,163)
   Adjustments to reconcile net loss
     to net cash provided by operating
     activities
       Depreciation                                        --              --                --
       Common stock issued for services                    --              --             6,000
       Increase (Decrease) in
         Accounts payable - trade                         863              --               863
                                                     --------        --------          --------

NET CASH USED IN OPERATING ACTIVITIES                  (1,500)         (1,979)           (7,300)
                                                     --------        --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES                       --              --                --
                                                     --------        --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES
   Capital contributed to support operations            1,500              --             1,500
   Proceeds from sales of common stock                     --              --             5,800
                                                     --------        --------          --------

NET CASH USED IN FINANCING ACTIVITIES                   1,500              --             7,300
                                                     --------        --------          --------

INCREASE (DECREASE) IN CASH                                --          (1,979)               --

Cash at beginning of period                                --           5,494                --
                                                     --------        --------          --------

CASH AT END OF PERIOD                                $     --        $  3,515          $     --
                                                     ========        ========          ========
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.

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
$14,000.

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

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

NOTE B - GOING CONCERN UNCERTAINTY

The Company is fully  dependent  upon 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 C - 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.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

2.   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.

3.   RESEARCH AND DEVELOPMENT EXPENSES

     Research and development expenses are charged to operations as incurred.

4.   ADVERTISING EXPENSES

     Advertising and marketing expenses are charged to operations as incurred.

5.   INCOME TAXES

     The Company  utilizes  the asset and  liability  method of  accounting  for
     income  taxes.  At March 31,  2002 and  2001,  the  deferred  tax asset and
     deferred tax liability  accounts,  as recorded when material,  are entirely
     the  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 March 31, 2002 and 2001, respectively, the deferred tax
     asset is related  solely to the Company's net operating  loss  carryforward
     and is fully reserved.

6.   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 March 31, 2002 and 2001, respectively,
     the Company had no warrants and/or options outstanding.

NOTE D - 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.

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE E - INCOME TAXES

The components of income tax (benefit)  expense for the three months ended March
31,  2002 and 2001 and for the period  from March 10,  1999 (date of  inception)
through March 31, 2002, respectively, are as follows:

                                  Three months    Three months
                                      ended           ended
                                    March 31,       March 31,
                                      2002            2001         Cumulative
                                    --------        --------       ----------
     Federal:
       Current                      $     --        $     --        $     --
       Deferred                           --              --              --
                                    --------        --------        --------
     State:
       Current                            --              --              --
       Deferred                           --              --              --
                                    --------        --------        --------

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

As of December 31, 2001,  the Company has a net operating loss  carryforward  of
approximately  $14,000  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   computation  of  allowable  annual
utilization of the carryforwards.

The Company's income tax expense  (benefit) for the three months ended March 31,
2002 and 2001 and for the period from March 10, 1999 (date of inception) through
March 31, 2002,  respectively,  differed from the  statutory  federal rate of 34
percent as follows:
<TABLE>
<CAPTION>
                                                           Three months   Three months
                                                               ended          ended
                                                             March 31,      March 31,
                                                               2002           2001      Cumulative
                                                             -------        -------     ----------
<S>                                                          <C>            <C>          <C>
Statutory rate applied to loss before income taxes           $  (800)       $  (670)     $(4,800)
Increase (decrease) in income taxes resulting from:
     State income taxes                                           --             --           --
     Other, including reserve for deferred tax asset             800            670        4,800
                                                             -------        -------      -------

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

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE E - INCOME TAXES - CONTINUED

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 March 31, 2002 and 2001, respectively:

                                                      March 31,    March 31,
                                                        2002         2001
                                                      -------      -------
     Deferred tax assets
       Net operating loss carryforwards               $ 4,800      $ 2,600
       Less valuation allowance                        (4,800)      (2,600)
                                                      -------      -------

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


                (Remainder of this page left blank intentionally)



                                                                               9
<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  under  a  strict  maintenance   schedule.
Predictive  maintenance  techniques  provide  valuable insight into an airplanes
long-term health and preventative activities keep it safe and reliable.

During the initial  phase of this  business  plan,  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.  In the next phase of our business,  we planned to obtain a
listing  for  public  trading  of our stock on the Over the  Counter  Electronic
Bulletin  Board and seek capital of $2,000,000  through the sale of common stock
in a private  placement.  While we believe we have made good faith  estimates of
Palomar's  ability to secure additional  capital,  there is no guarantee that we
will receive sufficient funding to implement any future business plan steps.

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-affiliated private investors.  From inception until the date of this filing,
we have had no material operating  activities.  Our audited financial statements
for the period from March 10,  1999 (our date of  inception)  through  March 31,
2002 report no cumulative  revenues and a cumulative  net loss of  approximately
$14,000.

                                                                              10
<PAGE>
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"

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-formed  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-locatable 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.

We intend 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.

We also  intend to comply  with the  periodical  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  three month periods
ended  March 31,  2002 and 2001 and for the period  from March 10, 1999 (date of
inception) through March 31, 2002, respectively.

                                                                              11
<PAGE>
General and administrative  expenses for the three month periods ended March 31,
2002 and 2001 were approximately $2,360 and $1,980,  respectively.  Net loss for
these periods was  approximately  $(2,360) and $(1,980).  Earnings per share for
the three months ended March 31, 2002 and 2001, was nil for each period.

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 March 31, 2002 and 2001,  respectively,  the  Company had working  capital of
approximately $(860) and $3,500.

It  is  the  intent  of  management  and  significant  stockholders  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 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 seek out 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.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

     None

ITEM 2 - CHANGES IN SECURITIES

     None

ITEM 3 - DEFAULTS ON SENIOR SECURITIES

     None

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<PAGE>
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

     Exhibits - None
     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.

                                        PALOMAR ENTERPRISES, INC.

Dated: May 7, 2002                      By: /s/ Terry W. Neild
                                            ------------------------------------
                                            Terry W. Neild
                                            President, Chief Executive Officer
                                            and Chief Accounting Officer

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