CARLSBAD, Calif., Aug. 1 /PRNewswire-FirstCall/ -- Palomar Enterprises, Inc. (BULLETIN BOARD: PLMA) , announced today that The Company has provided the following update to the business of Palomar Enterprises.
We are now providing our fourth update to shareholders over the last seven months. This is an update to our shareholders on the status of all of our businesses and our strategy for the next several months. The market for our stock has been difficult since hitting a high of .048 back in early March of this year. We have decided to take steps that will benefit our Company as well as its shareholders. In this update, we will lay out our strategy and answer as many questions as we can.
All of our businesses continue to grow at a very good pace. This will bear out in our next quarterly reports to the SEC. We have decided to adopt a strategy of building value for our shareholders by restructuring our capital structure. Last week, we announced that 350 million common shares would be converted back to preferred stock and retired back to treasury. This will effectively cut our number of shares outstanding by 65 percent. In the near future we expect to announce further measures to reduce the number of shares outstanding in the stock of Palomar Enterprises.
With regard to revenues, we expect Palomar to generate more income this year than in The Company's history. Currently, The Company has in excess of $13,000,000 in Real Estate Inventory that is on the market to be sold by our licensed agents, which will translate to commission revenue for Palomar Enterprises.
Foreclosure Business: We are concentrating our efforts in the real estate foreclosure market in various locations but are focusing specifically on the lucrative areas in southern California. We are also expanding eastward into the Midwestern US. This business is growing rapidly and we expect to see strength for at least the next 3 to 5 years.
Stock Dividends: The Company has paid out two dividends of free trading stock to its shareholders and we expect to pay our next dividend of the common stock of The Blackhawk Fund Media later this year, which will be announced shortly.
No Reverse Splits
As mentioned in our last three shareholder updates, we have no intention of doing a reverse split or anything else that would decrease the value of our stock. In fact we are working in a direction that will eliminate as much stock as possible over the next few months.
Questions and Answers:
Q: Why is the dividend of Blackhawk Fund Media shares to Palomar shareholders so small?
A: The dividend is meant for long-term shareholders of Palomar. Over a period of a year, each dividend payment will add up to a significant total for those that have a decent position in Palomar. We expect that over time, Blackhawk Fund Media will increase in value as well. Finally, if we paid out a large, one-time dividend most people are likely to buy Palomar for the dividend then sell Blackhawk as well as Palomar. In other words, this is a way to pay a dividend to our loyal investors and not just traders of the stock.
Q: You announced the retirement of 350 million shares last week. When might we expect that stock to be out of the market and into retirement?
A: The retirement of the shares is two-part. First the stock is being converted back to preferred shares as it was before. Then we will report the adjusted outstanding common shares in our quarterly SEC filings, which will reduce the outstanding common shares by 65%. This reduction of shares increases the intrinsic value of each share held by shareholders. The process will be completed within the next two to three weeks.
Q: Is there a significant short position in the stock of Palomar?
A: We are determining that now but believe, given what has transpired over the last few months, there could be a significant short position in the stock. We are implementing several measures over the next several weeks and months to force the short positions to settle their positions. In most cases forcing shorts to cover only works for a short period of time. However, we believe that by remaining dynamic with our plans for the Company as well as the stock, it will make Palomar a very hard target for shorters.
Q: Are we to expect the business of Palomar (foreclosures) to continue to grow and if so, how long?
A: We believe the foreclosure market will continue to be strong over the next 3 to 5 years. We also expect our revenue stream and profitability to continue to grow over the next 5 years. Our coastal development projects continue to yield high margin of profits, which we see increasing as the real estate market improves.
Q: How does The Blackhawk Fund Media's business affect Palomar?
A: Blackhawk is a wholly owned subsidiary of Palomar. Blackhawk's revenues and profits are applied to the bottom line of Palomar. We pay a dividend of Blackhawk to Palomar Shareholders as well. We expect rapid growth of Blackhawk's business over the next few years. And, we fully expect both companies to do extremely well financially and in the market place too.
Q: What other means are you using to lower the number of shares outstanding?
A: We expect to announce further measures to lower the number of shares outstanding next week. We are finalizing that strategy right now.
From time to time, the Company may issue news releases that contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. This material may contain statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, the Company claims the protection of the safe harbor for forward-looking statement provisions contained in the Private Securities Litigation Reform Act of 1995 and any amendments thereto. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions, or future events or performance are not statements of historical fact and may be "forward- looking statements." "Forward-looking statements" are based upon expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties that could cause actual results or events to differ materially from those anticipated.
http://www.thepalomargroup.com/
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