Filed by Automated Filing Services Inc. (604) 609-0244 - Paloma Enterprises, Inc.

General Form for Registration of Securities of Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934

PALOMA ENTERPRISES, INC.
(Exact name of small business issuer as specified in its charter)

657 Palomar St. Ste. J, Chula Vista, CA, 91911
(Address of principal executive offices) (Zip Code)

Title of each class To be registered	Name of each exchange on which each class is to be registered
Common	NASDAQ Over the Counter Bulletin Board

All statements contained in this Form 10-SB, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words "believe," "anticipate," "expect" and words of similar import. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties that may cause actual results to differ materially.

Such risks include, among others, the following: international, national and local general economic and market conditions: our ability to sustain, manage or forecast our growth; 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.

Consequently, all of the forward-looking statements made in this Form 10-SB are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations.

As used in this Form 10-SB, unless the context requires otherwise, "we" or "us" or the "Company" means Paloma Enterprises, Inc.

Paloma Enterprises, Inc. (“Paloma”; “Paloma Enterprises”; the “Company”) was incorporated on August 11, 2005 under the laws of the State of Nevada. The Company has its registered office in Carson City, Nevada, and maintains a business office in Chula Vista, California.

On October 31 2005, the Company entered into an agreement to purchase a party rental company in Chula Vista called Party Production Rentals, Inc. (“Party Production”), which was formed under the laws of the State of California on November 23, 2004.

Under the terms of the Agreement, Paloma issued 5, 000,000 shares to the sole shareholder of Party Production at a deemed price of $0.001 per share (for $5,000) A further 10,000,000 shares were delivered on August 1, 2006 (the “Closing”), at a deemed price of $0.001 per share (for $10,000) for a total of$15,000.

Party Production is wholly-owned subsidiary that employs the executives and staff who oversee the day-to-day operations of the Company’s business.

Paloma Enterprises has not been involved in any bankruptcy, receivership, or similar proceeding. The Company has not undergone any material reclassification, merger,

consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.

Paloma Enterprises, through its subsidiary Party Productions, is a full service party rental company.

Management of the Company has been serving clients since November 2004 as Party Productions., and most recently, through Paloma Enterprises since October of 2005. Party Productions started in August of 1996 as a sole proprietorship at 657 Palomar St Ste J, Chula Vista, CA 91911. The Company still occupies this location and conducts all of its business at this address.

In January 2005, the Company started an e-commerce website to integrate the brick-and-mortar store products and services with a convenient online presence. The Company’s Uniform Resource Locator (URL) for its ecommerce website is: www.partyproductionrentals.com.

Party Production inventories a large amount of party supplies. With access to this inventory, our party planners can arrange weddings, events and large gatherings for crowds both small (50 – 100 guests) and large (500 – 1000 guests). Products that we offer include,

--- Beverage Service. As a part of our beverage service, we offer our customers the choice of a champagne fountain, coffee makers, thermal beverage containers, punch bowls, champagne buckets, and bar equipment.

--- Canopies and tenting. We provide frame tents, of various sizes, that have sidewalls, with or without windows, and lighting for any occasion.

--- Tables and Chairs. Also available for rent are tables of various sizes and varieties. Customers can chose from banquet tables, round tables, serpentine tables, or even kid’s tables. We provide folding chairs, wooden folding chairs, Chiavarris, wicker chairs, kid’s chairs, and bar stools.

--- China, Flatware, and Glasses. We offer clients a broad selection of china, flatware and glassware to accommodate customers who are hosting a special event such as a rehearsal dinner, wedding reception, or holiday dinner party. For customers desiring to rent china for their party or special event we have many selections available. Among the selections offered are white pattern, white and silver band, and ivory with gold band. To fully furnish the dinner place setting we offer flatware and glasses such wine glasses, water goblets, and assorted cocktail glasses.

--- Serving and Catering. For serving dinners, we offer bowls, chafing dishes, serving trays, and pitchers.

--- Linens. Table clothes are available to rent along with table drapes, napkins, aisle runners and chair covers. Our selection includes multiples sizes and colors to fit the specific needs of the customer.

--- Concessions and Party Equipment. We also offer specialized equipment for different party themes. For instance, we carry cotton candy machines, hot dog machines, snow cone machines, and popcorn machines. We also rent out karaoke machines, fogging machines, dance floors and staging.

--- Outdoor Equipment. For outdoor events, we rent out umbrellas, barbeque grills, and heaters.

--- Wedding Accessories. We provide arches, kneeling benches, candelabras, and Cinderella Balls for weddings.

The Company expands its service offerings and product line continuously, as customer feedback and requests dictate changing trends. All products we add become part of our rental inventory and are stored by us at our warehouse.

At present, our target market consists of the San Diego and Southern California urban markets. We plan to use the Internet and a number of web based advertising and marketing strategies to grow our client base market and to reach to new clients in the San Diego and Southern California area, other large Southern California urban centers, as well as Las Vegas, Nevada.

The Company markets its services through traditional print advertising such as phone book and yellow pages listings. The Company plans to markets its services in the future through traditional print advertising, trade journals and magazines. The Company will also use its full service website (www.partyproductionrentals.com) to advertise to and inform clients about new products and services. We plan to market our services via the Internet through search engine optimization and the implementation of affiliate advertising and banner advertising.

Our website has been functional since January 2005. The Company’s website now plays an integral and expanding role in the efficiency of how the Company does business. In March 2005, Internet sales accounted for 0.6%, and in April 2005, they increased to 4.6%, and have grown steadily since. We drive website traffic to our site by using affiliate advertising and banner advertising, through links on associated websites for parties and rental equipment.

--- Marketing Mediums: The list below reflects the marketing mediums we will deploy over the next five years in order of importance and feasibility. Our goal is to allocate a marketing budget to the mediums we believe, over time, to be the most effective.

--- Marketing Promotion: Management intends to continue developing a marketing and promotion strategy to build Paloma’s brand, grow the Company’s client base, and promote client loyalty and client retention. These activities include both offline and online advertising:

--- Online affiliate program: The Company intends to establish an affiliate program and other initiatives aimed at increasing traffic and supporting the brand development. Under the proposed affiliate program, the Company would pay registered affiliates referral fees for sales generated via their links to the Company's Web site.

--- Online direct marketing: As the customer base grows, management will have an opportunity to collect significant data about the Company's customers. With our clients’ permission, management intends to maximize the value of this information by delivering

meaningful information and special offers to customers via e-mail and other means. In addition, management intends to publish an online newsletter delivered by e-mail to subscribers in which will be highlighted important industry news and developments.

--- Offline advertising: The Company intends to use offline advertising to promote the Company’s brand through offline advertising. The Company employs offline advertising to promote both brand and specific merchandising opportunities. The Company's plan is to focus these efforts on print advertisements in trade journals and trade shows that cater to the special events industries, such as food, catering, wedding planning and wedding services. As revenues ramp up, management plans to continue to utilize additional forms of traditional offline advertising, such as television, radio, magazines, outdoor advertising and direct mail, in order to continue building our brand recognition.

--- Independent Sales Organizations: The Company intends to generate new merchant accounts by contracting independent sales organizations. This marketing effort will be coordinated through the central office of the Company.

We have an existing database of 800 potential contacts . With an industry standard success ratio of 10% with direct mail and follow up calls, we plan to add eighty new clients. The anticipated cost of the plan is $500 for each mailer. We plan on doing one mailer every three months.

The following are the key elements and tactics of our long-term business development strategy:

--- Improve our product offerings: To compete effectively, and expand our market share, the Company must continually develop and introduce new products and service enhancements that reflect new trends. We plan to improve and expand our service offerings on an ongoing basis through acquisitions of complementary product lines, the introduction of new services, and our internal research and development efforts.

--- Expand our operations: Management believes there is a significant opportunity to grow our business in the San Diego and Southern California markets through our Internet site and direct mail drops (campaigns).

--- Leverage strategic partnerships: Management intends to build and strengthen strategic partnerships so that our partner companies will recommend our rental party products special event services. We intend to fully support their efforts to maximize sales and plan to continue to recruit new companies as partners.

Party Production Rentals has definite brand recognition and loyalty in the local area as repeat business accounts for over 65% of sales. The Company, however, operates in a highly competitive market. The Company competes with a variety of smaller and larger rental companies and retailers, including single owner-operated party equipment supplies stores, specialty party supplies stores, warehouse/ merchandise clubs, designated

departments in drug stores, general mass merchandisers, supermarkets and department stores of local, regional and national chains and catalog and Internet merchandisers.

The names of our principal competitors with websites are Raphaels (http://www.raphaels.com/), Classic Party Rentals (http://www.classicpartyrentals.com/), San Diego Party Rentals (http://www.sdpartyrentals.signonsandiego.com/) and ABC Party Rentals (http://www.abcpartyrental.com/). These companies compete with us primarily through their web presence. All of our competitors have a higher web profile than we do and many of our competitors in our markets have greater financial resources than we do.

Paloma is not dependent on the availability raw materials. As such, we do not need to purchase raw materials for the successful operation of our business. At present, we rely on a number of suppliers so we may procure specific product lines. In the event that we lose one or more suppliers, we believe that the potential disruption to our business would be short lived, as there are many companies that we can use to obtain products from on favorable terms, and because we have established a credible credit history with our suppliers. As such, we do not feel that a disruption in our supply chain would seriously harm our business and operating results over the long-term, but could be problematic over the short-term (potentially four to six weeks in duration, until a new supplier is or new suppliers are found).

The Company has a broad and growing base of clients and does not face substantial risk due to a concentration of business that is generated by a small number of clients. The Company recognizes that the challenges relevant to building a broader, larger clientele are formidable. The Company plans to execute a comprehensive marketing and sales strategy to build its client base.

The Company is not currently subject to direct federal, state or local regulation other than regulations applicable to businesses generally and directly applicable to online commerce. The Company is not currently subject to direct regulation by any governmental agency other than laws and regulations generally applicable to businesses. Paloma Enterprises promotes best practices and ethical business conduct in relation to the Company’s corporate culture and its day-to-day operations.

Paloma Enterprises is not impacted by the costs and effects of compliance with environmental laws, other than the laws and regulations generally applicable to businesses. Paloma Enterprises operates with a high level of respect for and promotes the protection of the environment, and is not aware of circumstances that would create any significant financial responsibility for environmental matters.

The number of individuals employed by us as of December 31, 2005, was seven (7) fulltime employees. All employees work at our principal location, 657 Palomar St Ste J, Chula Vista, CA 91911.

Over the next twelve months, we will be hiring two (2) fulltime Customers Service representatives (CSRs).

You can inspect the registration statement and the exhibits and the schedules thereto filed with the commission, without charge, at the office of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549. You can also obtain copies of these materials from the public reference section of the commission at 100 F Street, NE, Room 1580, Washington, DC 20549, at prescribed rates. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Commission maintains a web site on the Internet that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission at HTTP://WWW.SEC.GOV.

FACTORS AFFECTING OPERATING RESULTS, LIQUIDITY AND CAPITAL RESOURCES; RISKS RELATED TO OUR BUSINESS; FACTORS THAT MAY AFFECT FUTURE RESULTS AND THE MARKET PRICE OF OUR STOCK:

WE OPERATE IN A RAPIDLY CHANGING ENVIRONMENT THAT INVOLVES NUMEROUS RISKS, SOME OF WHICH ARE BEYOND OUR CONTROL. THE FOLLOWING DISCUSSION HIGHLIGHTS THESE RISKS.

--- COMPETITORS HAVE LONGER OPERATING HISTORIES. Many of the Company's current and potential competitors have longer operating histories, larger customer or user bases, greater brand recognition and significantly greater financial, marketing and other resources than does the Company. Many of these current and potential competitors can devote substantially more resources to the development of their business operations than the Company can at present. In addition, larger, well-established and well-financed entities may acquire, invest in or form joint ventures with other established competitors.

--- INABILITY TO BUILD AWARENESS OF THE RECOGNITION OF OUR BRAND MAY PROHIBIT THE COMPANY FROM COMPETING EFFECTIVELY AGAINST COMPETITORS WHO HAVE GREATER NAME RECOGNITION. SALES COULD BE ADVERSELY AFFECTED. If the Company is unable to achieve or maintain a leading position in positioning of its products and services, or to promote and maintain its brand and its business, results of operations and financial condition could suffer. Management believes that the importance of brand recognition will increase as more companies utilize and market their services over the Internet. Development and awareness of our brand will depend largely on the Company's success in increasing its customer base. In order to attract and retain customers and to promote and maintain its brand in response to competitive pressures, management plans to increase the Company's marketing and advertising activities and otherwise to increase substantially its commitment to creating and maintaining brand loyalty. (For greater details regarding principal markets and distribution methods, please see "MARKETING” above.)

--- THE FAILURE TO IMPROVE OUR PRODUCTS AND SERVICES OR TO OFFER NEW PRODUCTS AND SERVICES COULD CAUSE US TO LOSE CUSTOMERS. Our industry

experiences changes in preference and trend on a regular basis (yearly). Our success depends on our ability to improve our existing products and services and to develop and market new products and services. The costs and expenses associated with such an effort could be significant to us. There is no assurance that we will be able to find the funds necessary to improve our existing products and services or that if such funds are available that we can do so successfully. Our failure to improve the products and services we offer our customers or any delay in providing such products and services could cause us to lose customers to our competitors. Loss of customers could have a material adverse effect on Paloma Enterprises.

--- WE ARE RELIANT UPON OUR MANAGEMENT TO BE SUCCESSFUL. The rapid execution necessary for us to fully exploit the market for our products and services requires an effective planning and management process. Our growth is expected to continue to place a significant strain on our managerial, operational and financial resources. Our ability to manage our growth effectively will require us to continue to implement and improve our operational, financial and management information systems and to attract, identify, train, integrate and retain qualified personnel. These demands may require the addition of new management personnel and the development of additional expertise by existing management. Our success depends to a significant extent on the ability of our officers to operate effectively, both independently and as a group.

--- WE DEPEND ON THE GROWTH OF OUR CUSTOMER BASE AND INCREASED BUSINESS FROM OUR CURRENT CUSTOMERS. Our success is substantially dependent on the continued growth of our customer base. If we fail to increase our customer base, our business and operating results would be seriously harmed. Our ability to attract new customers will depend on a variety of factors, including the reliability, security, scalability and cost-effectiveness of our products and services, as well as our ability to effectively market our products and services. If we fail to generate repeat and expanded business from our current customers, our business and operating results would be seriously harmed.

--- HIGHLY COMPETITIVE INDUSTRY. The catering and party supply industry is highly competitive. Many small and large companies compete with us. Many of our competitors have substantially greater capital resources than does Paloma Enterprises. To be successful, the Company must offer the highest quality products and services. If we fail to recognize and respond to changing trends in our industry, to offer new products that are in demand, our business and our ability to conduct our operations in the future could be seriously impaired.

--- WE FACE COMPETITION FROM OTHER ORGANIZATIONS AND COMPANIES THAT PROVIDE PRODUCTS AND SERVICES SIMILAR TO OURS. The market for party rental products and services is intensely competitive. Since there are no substantial barriers to entry, we expect competition in these markets to intensify. We believe that the principal competitive factors in these markets are name recognition, reputation for quality products and services, and price competitiveness. Our existing competitors, as well as a number of potential new competitors, may have longer operating histories, greater name recognition, larger customer bases and databases and significantly greater financial and marketing resources. Such competitors may be able to undertake more extensive marketing campaigns and make more attractive offers to potential employees. Further, there can be no assurance that our competitors will not develop services that are equal or superior to ours or that achieve greater market acceptance than our offerings. There can be no assurance that we will be able to compete successfully against our current or future competitors or that

competition will not have a material adverse effect on our business, results of operations and financial condition.

--- THERE CAN BE NO ASSURANCE THAT ANY NEW PRODUCTS AND SERVICES WE INTRODUCE WILL ACHIEVE SIGNIFICANT MARKET ACCEPTANCE OR WILL GENERATE SIGNIFICANT REVENUE. To obtain a competitive position, we must enhance and improve existing services and continue to introduce new products and services to achieve market acceptance. Our inability or failure to successfully enhance and improve our services in a timely manner, and position and/or price our services could have a material adverse effect on our business, results of operations or financial position.

--- OUR PRICING FOR OUR RENTAL PRODUCTS AND OUR SERVICES MAY NOT BE CONDUCIVE TO CONTINUED USE. Intense competition in the various markets in which we compete may put pressure on us to reduce prices on our services. Changes in the customer's use of our services could also result in lower revenues if our pricing model is not adapted to such usage. Any such price reductions and resulting lower license revenues could have a material adverse effect on our business, results of operations, or financial position, if we cannot offset these price reductions with a corresponding increase in client transaction volumes or lower spending.

--- INVOLVEMENT IN LITIGATION COULD HARM OUR BUSINESS. We are not currently involved in any lawsuits arising from the ordinary course of business. The cost to us for the fees and expenses to defend a lawsuit could have a material adverse effect on our financial condition, results of operations or cash flow. In addition, there can be no assurance that we will not at some time in the future experience significant liability in connection to a lawsuit.

C. RISKS RELATED TO SECURITIES MARKETS AND RISKS ASSOCIATED WITH OUR COMMON STOCK

--- THE OPERATING RESULTS ARE DIFFICULT TO PREDICT. Management expects both quarterly and annual operating results to fluctuate significantly in the future. Factors that may harm the business or cause the operating results to fluctuate include the following: the inability to obtain new clients at a reasonable cost; decreases in the number of clients; the ability of competitors to offer superior products and services; price competition; the failure to develop marketing relationships with key business partners; increases in the cost of online or offline advertising; the amount and timing of operating costs and capital expenditures relating to expansion of operations. Any change in one or more of these factors could reduce gross margins in future periods. Our stock is not publicly traded on a securities market at this time and may not be in the future.

--- IF WE NEED TO SELL OR ISSUE ADDITIONAL SHARES OF COMMON STOCK OR ASSUME ADDITIONAL DEBT TO FINANCE FUTURE GROWTH, OUR STOCKHOLDERS' OWNERSHIP COULD BE DILUTED OR OUR EARNINGS COULD BE ADVERSELY IMPACTED. Our business strategy may include expansion through internal growth, by acquiring complementary businesses, or by establishing strategic relationships with other financial organizations. In order to do so, to fund other activities, we may issue additional equity securities that could dilute our stockholders' stock ownership. We may also assume debt and incur impairment losses related to goodwill and other tangible assets if we acquire another company and this could negatively impact our results of operations.

--- WE HAVE ADOPTED A NUMBER OF ANTI-TAKEOVER MEASURES THAT MAY DEPRESS THE PRICE OF OUR COMMON STOCK. Our rights agreement, our ability to issue additional shares of preferred stock and some provisions of our articles of incorporation and bylaws could make it more difficult for a third party to make an unsolicited takeover attempt of us. These anti-takeover measures may depress the price of our common stock by making it more difficult for third parties to acquire us by offering to purchase shares of our stock at a premium to its market price.

--- WE HAVE NOT PAID AND DO NOT CURRENTLY PLAN TO PAY DIVIDENDS. Some investors favor companies that pay dividends. We have not declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings for funding growth, and we do not currently anticipate paying cash dividends on our common stock in the foreseeable future. Because we do not currently plan to pay dividends, your return on this investment likely depends on selling our stock at a profit. There is no assurance, however, that you will ever be able to sell this stock. Furthermore, If you are able to sell this stock there is no assurance that you will be able to sell the stock at a profit.

--- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are currently not exposed to any significant financial market risks from changes in foreign currency exchange rates or changes in interest rates and do not use derivative financial instruments. All of our revenue and capital spending is transacted in U.S. dollars. However, in the future, we may enter into transactions in other currencies. An adverse change in exchange rates would result in a decline in income before taxes, assuming that each exchange rate would change in the same direction relative to the U.S. dollar. In addition to the direct effects of changes in exchange rates, such changes typically affect the volume of sales or foreign currency sales price as competitors' products become more or less attractive.

--- SHARES OF OUR COMMON STOCK MAY BE "PENNY STOCKS”. At all times when the current market price per share of our common stock is less than $5.00, our shares of common stock will be considered "penny stocks" as defined in the Securities Exchange Act of 1934, as amended. As a result, an investor may find it more difficult to dispose of or obtain accurate quotations as to the price of the shares of our common stock being issued under this prospectus. In addition, the penny stock rules adopted by the Securities and Exchange Commission under the Exchange Act would subject the sale of shares of our common stock to regulations which impose sales practice requirements on broker-dealers. For example, broker-dealers selling penny stocks must, prior to effecting the transaction, provide their customers with a document which discloses the risks of investing in penny stocks.

Furthermore, if the person purchasing penny stocks is someone other than an accredited investor, as defined in the Securities Act, or an established customer of the broker-dealer, the broker-dealer must also approve the potential customer's account by obtaining information concerning the customer's financial situation, investment experience and investment objectives. The broker-dealer must also make a determination whether the transaction is suitable for the customer and whether the customer has sufficient knowledge and experience in financial matters to be reasonably expected to be capable of evaluating the risk of transactions in penny stocks. Accordingly, the SEC's rules may limit the number of potential purchasers of shares of our common stock. Moreover, various state securities laws impose restrictions on transferring penny stocks, and, as a result, investors in our common stock may have their ability to sell their shares impaired.

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which (i) contained a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (ii) contained a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of Securities' laws; (iii) contained a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and significance of the spread between the "bid" and "ask" price; (iv) contains a toll-free telephone number for inquiries on disciplinary actions; (v) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (vi) contains such other information and is in such form (including language, type, size and format), as the Commission shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in penny stock, the customer (i) with bid and offer quotations for the penny stock; (ii) the compensation of the broker-dealer and its salesperson in the transaction; (iii) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (iv) month account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. If any of the Company's securities become subject to the penny stock rules, holders of those securities may have difficulty selling those securities.

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those statements included elsewhere in this statement. In addition to the historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" and elsewhere in this statement.

In the notes to the financial statements, our auditors have included a note regarding our ability to continue as a going concern. The financial statements included in this registration statement have been prepared assuming that we will be able to continue as a going concern. The reason for the going concern comment is that we have a net loss $48,219 on revenues of $285,926 and expenses of $334,145 for the period from August 11, 2005 (inception) to December 31, 2005.

Revenue increased by $52, 510 from Dec 31, 2004 to Dec 31, 2005. The reason for increased revenue is mainly attributable to an increase of sales through our web channels and we acquired more consistent orders from contractors who have been using Paloma in turn to subcontract orders.

Net income for the period ended December 31, 2004 was a loss of $13,253 (as Party Productions Inc, sole proprietorship) and for the period ended December 31, 2005 was a loss of $48,219 (as Paloma Enterprises Inc.) This was an increased loss over the year of $34,966. The reason for the increased loss is mainly attributable to an increase in our Total Expenses of $87,476. In particular, our Depreciation expense increased by 15,655 as this expense includes the depreciation from its subsidiary and predecessor, Party Production Inc. As well, we had $34,585 in leases in the period from Dec 31, 2004 to December 31, 2005 that were not present prior to December 31, 2004. Finally, we had increased Operating Expenses of $33,585 for the period ended December 31, 2005 over the period ended December 31, 2004. The increased operating expenses were a result of servicing our increased revenue.

Over the next twelve months, the Company will continue to operate Paloma Enterprises’ ongoing rental business. The Company plans to focus on its core business over the next twelve months and is not planning to undertake new projects or alter its business approach. At the present time, we have sufficient cash on hand to maintain our operations for the next twelve months.

The Company will continue to buy its linens from Ben Textiles, have the linens sewn in Mexico by Julio Rivera, an independent contractor , and continue to have them washed under our current arrangement with GBS Linens. The actual cost for manufacturing the linens is only a few dollars more than the rental charge. As a result, we believe that we will be able to grow our inventory quickly.

Management believe that the linens rental market is a strong and untapped commercial opportunity in both San Diego and Southern California. Our focus will be supplying caterers, wedding coordinators and also other party stores with overnight delivery of linens for special events; a service that can be booked online. No competitor currently has control of the market for shipping linens overnight to catering events. Clients throughout the United States will be able to use our website at www.partyproductionrentals.com to order linens for their special events. Because we are based in San Diego, it will be cheaper for potential new clients in the surrounding Southern California area to sub-rent from Party Production Rentals, rather than sub-rent from our competitors in Orange County, who would have significantly higher transportation costs to service this area.

We also plan to begin a marketing campaign that is focused on improving the functionality of our website and our web sales and marketing results. We plan to utilize leading edge SEO (Search Engine Optimization) strategies with the guidance and consultation from Carerra E-commerce. We have a signed agreement with Carrera E-commerce to set up and maintain a Search Engine Optimization program designed to have Party Production achieve high rankings among the top search engines.

We will be adding two fulltime Customers Service representatives (CSRs). They will be in charge of answering customer inquires and mail merging information as part of our mail campaign. Our CSRs will be assisting current staff and promoting sales through

telemarketing activities to potential new clients, as well as existing clients. The anticipated cost of the new staff is $1500 a month for each CSR. The Company has no plans to hire additional staff in addition to the two CSPs.

We will continue to build our network of caterers, florists, banquet halls and wedding planners. We have an existing database of 800 potential contacts.. With an industry standard success ratio of 10% with direct mail and follow up calls, we plan to add eighty new clients. The anticipated cost of the plan is $500 for each mailer. We plan on doing one mailer every three months.

Liquidity And Capital Resources
Since the date of our incorporation on August 11, 2005, we have raised $6,000 from the sale of 6,000,000 of our common shares through a private placement. As of the year ended December 31, 2005, net cash used in operating activities was $11,051.

As of December 31, 2005, the Company’s assets were composed of $17,298 in cash and cash equivalents and $89,776 in vehicles and equipment.

Income represents all of the company’s revenue less all its expenses in the period incurred. The Company has, as of December 31, 2005 generated revenues for $285,926.

The liabilities of the Company include a) payments to be made in 2006 through 2008 for the lease on a truck. The balance remaining on the lease of the truck is $4,791.85 as of December 19, 2006. The monthly payments for the lease of the truck are $345.66 and include interest charged at a rate of 18.99%. The Company will pay these monthly payments until February 2008. b) Payments towards a line of credit with Washington Mutual. The balance on the line of credit as of December 19, 2006 is $8,642.11. Interest payable on the line of credit is at 12.25% and the Company will continue to make, at minimum, the monthly interest charge. The limit of the line of Credit is $11,000. c) Accounts Payable: A loan from the Director for $19,213. The loan is unsecured and is at an interest rate of 0%. The Director has set no other conditions or payment schedule for the repayment of the loan.

On August 01, 2006 completed the transfer of 10,000,000 as per the Share Exchange Agreement filed as an exhibit.

The Company’s offices are located at 657 Palomar St. Ste J, Chula Vista, CA 91911. This space is utilized for the Company’s office and warehouse needs. The space is leased from Palomar Industrial Center at a rate of $2,703 per month for the term of the year long lease., A three-year extension was signed which began on September 2005 and runs until August 2008. The warehouse is 3148 square feet. The lease payments remain at $2,703 per month, subject to a 2% per annum price increase as described in the lease agreement filed as an exhibit. ..

The Company has $14,776 equity in vehicles which includes complete ownership of 1999 GMC cube van and the lease payments made towards a second delivery vehicle.

Other property includes $75,000 in Party Rental supplies, which comprises the entirety of the Company’s rental inventory.

(a) The following table sets forth certain information regarding the beneficial ownership of the Company's common stock by each stockholder known by the Company to be the beneficial owner of more than 5% of the Company's common stock:

(1)	(2)	(3)	(4)
Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner	Percent of Class
Common	Abbie Zands 657 Palomar St. Ste J Chula Vista, CA 91911	15,000,000 common	71.4%

(b) The following table sets forth certain information regarding the beneficial ownership of the Company's common stock by each director and executive officer of the Company.

(1)	(2)	(3)	(4)
Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner	Percent of Class
Common	Abbie Zands 657 Palomar St. Ste J Chula Vista, CA 91911	15, 000,000 common	71.4.5%

Mr. Zands graduated from San Diego State University in 1989 with a degree in International Commerce. In 1989, he became CEO of A to Z Linens, and served in that capacity until 1994. From 1994 unto the present, Mr. Zands has operated Party Productions Rentals.

The following table sets forth the remuneration of our sole director and officer for the period from inception through 12/31/05:

In conjunction with the purchase of Party Production Rentals, Inc., the Company issued 5,000,000 shares to Abbie Zands, the sole shareholder of Party Production Rentals, Inc. and sole officer and director of the Company. The Company issued an additional 10,000,000 shares upon the Closing of the acquisition of Party Production Rentals Inc. on August 01, 2006 The business reason for the Company agreeing to issue the additional 10,000,000 shares to Mr. Zands upon the closing of the acquisition of Party Production Rentals, Inc. in August of 2006 was to allow the Company to determine if Party Productions Inc could be audited.

The authorized capital stock of the Company consists of 75,000,000 shares of common stock, par value $0.001 per share, of which there are 21,000,000 shares issued and outstanding. The following summarizes the important provisions of the Company's capital stock.

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders; have no preemptive rights; have no conversion or redemption rights or sinking fund; do not have cumulative voting rights; and share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefore. In the event of a liquidation, dissolution or winding up of the company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable.

Dividends, if any, will be contingent upon the Company's revenues and earnings, if any, and capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of the Company's Board of Directors. The Company presently intends to retain

all earnings, if any, and accordingly the Board of Directors does not anticipate declaring any dividends.

Our independent stock transfer agent is West Coast Stock Transfer, located in Vancouver, British Columbia, Canada. Their mailing address and telephone number is: 850 W. Hastings, Suite 311, Vancouver, BC V6C 1E1; (604)-682-2556.

The Company has never paid cash dividends on common stock, and does not expect to pay such dividends in the foreseeable future.

The Company is not a party to any legal proceeding. No property of the Company is the subject of a pending legal proceeding.

ITEM 3 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 4 RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED SECURITIES

We issued 5,000,000 shares of common stock on Oct. 31, 2005 to Mr. Abbie Zands at a price of $0.001 per share, for total proceeds of $5,000. We issued a further 10,000,000 to Mr. Zands on August 01, 2006 as per the conditions of the acquisition of Party Productions, Inc. Mr. Zands is our sole director and our president, secretary, treasurer and chief executive officer. These shares were issued pursuant to Section 4(2) of the Securities Act. The 15, 000,000 shares of common stock are restricted shares as defined in the Securities Act. This issuance was made to Mr. Zands who is a sophisticated investor and as a promoter of our company since our inception, was in a position of access to relevant and material information regarding our operations.

We completed an offering of 6,000,000 shares of our common stock at a price of $0.001 per share to a total of 11 purchasers known to our director from September to December 2005. The total amount we received from this offering was $6,000. We completed the offering pursuant to Regulation S of the Securities Act. Each purchaser represented to us that they were a non-US person as defined in

Regulation S. We did not engage in a distribution of this offering in the United States. Each purchaser represented his intention to acquire the securities for investment only and not with a view toward distribution. Appropriate legends were affixed to the stock certificate issued to each purchaser in accordance with Regulation S. Each investor was given adequate access to sufficient information about us to make an informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.

Name of Shareholder	Investment Date	Type	Amount
ABBIE ZANDS	October 2005 August 2006	Common Common	5,000,000 10,000,00
NICOLE CHIALA	September 2005	Common	500,000
THEO CHOLEVAS	September 2005	Common	500,000
JAN ZANDS	October 2005	Common	500,000
SAMUEL ZANDS	October 2005	Common	500,000
SARA ZANDS	October 2005	Common	500,000
378540 BC LTD (DAN JABOUR)	November 2005	Common	500,000
ROB WORKMAN	November 2005	Common	500,000
VITTORIA DE COTIIS	November 2005	Common	500,000
JODI NORMAN BALES	December 2005	Common	500,000
GTE COMPUTER SOLUTIONS, INC.	December 2005	Common	1,000,000
HECTOR FLETES Total Issued and Outstanding As of December 31, 2006	December 2005	Common	500,000 21,000,000

The Company’s Bylaws provide that the Company shall indemnify its directors and officers to the fullest extent not prohibited by the Nevada General Corporation Law; provided, however, the Company may modify the extent of indemnification by individual contracts with its directors and officers; provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law; (ii) the proceeding was authorized by the Board of Directors of the Company; (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the Nevada General Corporation law; or (iv) such indemnification is required to be made under the Bylaws.

We have audited the accompanying consolidated balance sheet of Paloma Enterprises Inc as of December 31, 2005, and the related consolidated statements of operations, stockholders’ equity and cash flows for the period from inception on August 11, 2005 through December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Paloma Enterprises Inc as of December 31, 2005 and the results of its consolidated operations and its cash flows for the period from inception on August 11, 2005 through December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s recurring losses raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

PALOMA ENTERPRISES INC.
Consolidated Financial Statements
Balance Sheet
For theYear ended December 31, 2005
(Stated in US Dollars)

PALOMA ENTERPRISES INC.
Consolidated Financial Statements
Statement of Operations
For theYear ended December 31, 2005
(Stated in US Dollars)

PALOMA ENTERPRISES INC.
Consolidated Financial Statements
STATEMENT OF STOCKHOLDER’S EQUITY
From Inception (August 11, 2005) to December 31, 2005
(Stated in US Dollars)

	Common Stock			Additional		Accumulated			Total
	Shares		Amount	Paid in		Deficit			Equity
				Capital

Founder Shares Issued @
par Value of$0.001	5,000,000	$	5,000					$	5,000

Shares Issued @ $0.001	6,000,000	$	6,000					$	6,000

Net Income (Loss) for period					$	(48,219	)	$	(48,219	)
Balance, December 31, 2005	11,000,000	$	11,000		$	(48,219	)	$	(37,219	)

PALOMA ENTERPRISES INC.
Consolidated Financial Statements
Statement of Cash Flows
For theYear ended December 31, 2005
(Stated in US Dollars)