Angel Acquistion (AGEL)

[Phisherman]

10QSB: PALOMAR ENTERPRISES INC
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Edgar Online
1:44 p.m. 08/14/2007
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
Forward-Looking Information
Much of the discussion in this Item is "forward looking" as that term is used in
There are several factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow. Readers are cautioned not to place undue reliance on the forward- looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-QSB to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of its public disclosure practices. Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and related notes contained in Item 1 of Part I of this Form 10-QSB, as well as the financial statements in Item 7 of Part II of our Form 10-KSB for the fiscal year ended, December 31, 2006.

Current Business Plan

Overview
We provide brokerage services in the real estate market, as well as purchase, renovate, develop and sell residential properties. We also through our subsidiary produce infomercials and media stream advertising.

RESULTS OF OPERATIONS:

Three months ended June 30, 2007 compared to the three months ended June 30, 2006:

Total net sales and revenue were at $282,749 for the three months ending June 30, 2007 compared to $ 204,012 for the prior period. This represents an increase of 18 percent.

Our gross profit for the three months ended June 30, 2007 compared to 2006 decreased to $39,1from $103,691. This was mainly due to the fact that the profits on housing decreased and our media business results in small gross profits.

Total operating expenses for the three months ended June 30, 2007 were $619,007 compared to $642,971 for the same period in 2006.

Net loss for the period ending June 30, 2007 was $(881,898) compared to a net loss for the prior period in 2006 which was$(588,847). This increase was mainly the result of recognizing a derivative loss on our financing.

Interest expense, net for the three months ending June 30, 2007 was $82,764 The interest expense for the prior period in 2006 was $70,845. .

Six months ended June 30, 2007 compared to the six months ended June 30, 2006.

Total net sales and revenues were at $606,095 for the six months ended June 30, 2007 compared to $378,716 for the prior period, a increase of 38 percent.

Total operating expenses for the six months ended June 30, 2007 were $2,726,887 compared to 2006, which were $1,158,317. the main area of increase was stock issued for services.

Net loss was ($2,983,965) for six-month period ending June 30, 2007, compared to a loss of ($1,070,552) for the same period in 2006.

Interest expense, net for the six months ended June 30, 2007 was $181,547 compared to 99,295.

LIQUIDITY AND CAPTIAL RESOURCES:

As of June 30, 2007 we had a deficiency in working capital of $2,530,605.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements, we believe the following critical accounting policy involve the most complex, difficult and subjective estimates and judgments.

OFF-BALANCE SHEET ARRANGEMENTS.

We do not have any off-balance sheet arrangements.

Aug 14, 2007

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