U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended September 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from _____________to_______________
Commission file number: 0-49936
St. Joseph Energy, Inc.
----------------------------------------------
(Name of small business issuer in its charter)
Colorado CH 47-0844532
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
906 East 7th Street Hastings, Nebraska 68901
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (402) 461-4957
Indicate by checkmark whether the registrant (1) has 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 [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:
Outstanding at September 30, 2002
---------------------------------
2,748,920
$.001 par value common stock
MARINA CAPITAL, INC.
FORM 10-QSB
TABLE OF CONTENTS
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements............................................... 1
ITEM 2. Management Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 2
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings.................................................. 3
ITEM 2. Changes in Securities and Use of Proceeds.......................... 3
ITEM 3. Defaults Upon Senior Securities.................................... 3
ITEM 4. Submission of Matters to a Vote of Security Holders................ 4
ITEM 5. Other Information.................................................. 4
ITEM 6. Exhibits and Reports on Form 8-K................................... 4
ii
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
CONDENSED FINANCIAL STATEMENTS
UNAUDITED
INDEX
Page
____
Unaudited Condensed Balance Sheets........................................ F-1
Unaudited Statements of Operations for the Three-month
and Nine-months ended September 30, 2002 and 2001..................... F-2
Unaudited Statements of Cash Flows for the Nine-months
ended September 30, 2002 and 2001.................................... F-3
Notes to Unaudited Condensed Financial Statements......................... F-4
1
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
September 30, 2002
Assets
Current assets:
Cash............................................................. $ 8,030
Inventory, at cost (Note 3)...................................... 1,068
Total current assets 9,098
--------
Property and equipment, net...................................... 5,492
--------
$ 14,590
========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities......................... $ 750
--------
Total current liabilities................................... 750
--------
Shareholders' equity (Note 5):
Preferred stock................................................ -
Common stock................................................... 2,749
Additional paid-in capital..................................... 194,171
Deficit accumulated during development stage................... (183,080)
--------
Total shareholders' equity................................... 13,840
--------
$ 14,590
========
See accompanying notes to condensed financial statements
F-1
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
March 19,
1999
(Inception)
Three Months Ended Nine Months Ended Through
September 30, September 30, September 30,
__________________ __________________
2002 2001 2002 2001 2002
__________ __________ __________ __________ __________
Operating expenses:
Professional fees.................$ 4,750 $ - $ 6,250 $ 500 $ 17,801
Investment loss .................. - 119,500 - 119,500 119,500
Contributed rent (Note 2)......... 600 600 1,800 1,800 8,400
Compensation...................... - - - 58 1,358
Office and shop supplies.......... - 211 - 657 2,445
Depreciation...................... 902 738 2,704 2,228 8,871
Other............................. 14 8,073 32 8,703 9,205
---------- --------- ---------- --------- ---------
Total operating expenses..... 6,266 129,122 10,786 133,446 167,580
---------- --------- ---------- --------- ---------
Loss from operations......... (6,266) (129,122) (10,786) (133,446) (167,580)
Interest expense.................... - - - - (15,500)
---------- --------- ---------- ---------- ---------
Loss before income taxes..... (6,266) (129,122) (10,786) (133,446) (183,080)
Income tax provision (Note 4)....... - - - - -
---------- --------- ---------- ---------- ---------
Net loss.....................$ (6,266) $(129,122) $ (10,786) $ (133,446) $(183,080)
========== ========= ========== ========== =========
Basic and diluted loss per share....$ (0.00) $ (0.05) $ (0.00) $ (0.05)
========== ========= ========== =========
Weighted average common shares
outstanding....................... 2,742,920 2,701,720 2,719,898 2,701,720
========= ========= ========= =========
See accompanying notes to condensed financial statements
F-2
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
March 19,
1999
(Inception)
Nine Months Ended Through
September 30, September 30,
_____________
2002 2001 2002
____ ____ ____
Cash flows from operating activities:
Net loss.......................................... $ (10,786) $ (133,446) $ (183,080)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation.................................. 2,704 2,228 8,871
Office space contributed by an
officer (Note 2)............................ 1,800 1,800 8,400
Investment loss (Note 1)...................... - 119,500 119,500
Changes in operating assets and liabilities:
Inventory................................... - (1,068) (1,068)
Accounts payable and accrued liabilities.... 750 - 750
Accrued liabilities eliminated in
abandonment............................... - - 15,500
-------- --------- ---------
Net cash used in
operating activities................. $ (5,532) $ (10,986) $ (31,127)
-------- --------- ---------
Cash flows from investing activities:
Acquisition of property and equipment............. - (5,435) (14,363)
Payments for mineral lease interests.............. - - (135,000)
-------- --------- ---------
Net cash used in
investing activities................. - (5,435) (149,363)
-------- --------- -------
Cash flows from financing activities:
Proceeds from the sale of common stock (Note 5)... 11,800 - 189,230
Payments for offering costs....................... - - (710)
-------- --------- ---------
Net cash provided by
financing activities................. 11,800 - 188,520
-------- --------- ---------
Net change in cash................... 6,268 (16,421) 8,030
Cash, beginning of period......................... 1,762 23,559 -
-------- --------- ---------
Cash, end of period............................... $ 8,030 $ 7,138 $ 8,030
======== ========= =========
Supplemental disclosure of cash flow
information:
Income taxes...................................... $ - $ - $ -
======== ========= =========
Interest.......................................... $ - $ - $ -
======== ========= =========
Non-cash investing and financing activities:
Mineral lease interests acquires for debt......... $ - $ - $ 200,000
======== ========= =========
See accompanying notes to condensed financial statements
F-3
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
(1) Basis of Presentation
The condensed financial statements presented herein have been prepared by the
Company in accordance with the instructions for Form 10-QSB and the accounting
policies in its Form 10-SB for the year ended December 31, 2001 and should be
read in conjunction with the notes thereto.
In the opinion of management, the accompanying condensed financial statements
contain all adjustments (consisting only of normal recurring adjustments) which
are necessary to provide a fair presentation of operating results for the
interim periods presented. The results of operations presented for the three
and nine months ended September 30, 2002 are not necessarily indicative of the
results to be expected for the year.
Financial data presented herein are unaudited.
(2) Related Party Transactions
An officer contributed office space to the Company for all periods presented.
The office space was valued at $200 per month based on the market rate in the
local area and is included in the accompanying financial statements as
contributed rent with a corresponding credit to contributed capital.
(3) Inventory
The Company's inventory consists of photograph prints and pottery supplies and
is stated at the lower of cost or market. Cost is determined using the specific
identification method. The Company had no movement in its inventory during the
nine months ended September 30, 2002.
(4) Income Taxes
The Company records its income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". The Company
incurred net operating losses during the nine months ended September 30, 2002
resulting in a deferred tax asset, which has been fully allowed for; therefore,
the net benefit and expense resulted in $-0- income taxes.
(5) Shareholders' Equity
During the nine months ended September 30, 2002, the Company sold 47,200 shares
of its common stock for $.25 per share pursuant to the exemptions afforded by
Section 4(2) of the Securities Act of 1933, as amended. The Company received
gross proceeds of $11,800. Following is a schedule of the changes in
shareholders' equity for the nine months ended September 30, 2002:
F-4
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
Deficit
Accumulated
Additional During
Common Stock Paid-in Development
____________
Shares Par Value Capital Stage Total
______ _________ _______ _________ ________
Balance, January 1, 2002........... 2,701,720 $ 2,702 $ 180,618 $ (172,294) $ 11,026
Sale of common stock
$.25 per share................... 47,200 47 11,753 - 11,800
Office space contributed by
an officer....................... - - 1,800 - 1,800
Net loss for the nine months
ended September 30, 2002......... - - - (10,786) (10,786)
--------- ------- -------- ---------- ---------
Balance, September 30, 2002..... 2,748,920 $ 2,749 $ 194,171 $ (183,080) $ 13,840
========= ======== ======== ========== =========
F-5
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the financial condition and results of
operations should be read in conjunction with the Financial Statements and Notes
thereto appearing elsewhere in this Form 10-QSB. As described elsewhere in this
Form 10-QSB, St. Joseph is a development stage company. As of the date of this
registration Statement, St. Joseph is in the business of producing and selling
pottery in/of all forms and does not have a current source of revenue at this
time.
RESULTS OF OPERATION.
In 2000, we invested $335,000 in two oil and gas properties through an agreement
with LDC Operating, Inc., an unrelated third party, who owned the working
interests in the properties. We borrowed $200,000 from an individual and used a
portion of the proceeds from a stock offering to make the investment. In August
2001, we assigned all of its rights in the properties to the lender in
satisfaction of the $200,000 debt and wrote-off the investment as a total loss.
We do not expect any significant changes in the number of our employees within
the next 12 months.
Revenues
We are considered as being a development stage company. As of the three month
and nine month periods ended September 30, 2002, we did not generate any
revenues as compared to generating no revenues for the three month and nine
month periods ended September 30, 2001.
Operating Loss
As of the three month period ended September 30, 2002, we incurred a net loss
before income taxes of $6,266 as compared to a net loss before income taxes of
$129,122 for the three month period ended September 30, 2001. This represents
a decrease in net operating losses of approximately 2,000%. The substantial
decrease in the net loss was a result of our abandonment of our efforts in the
oil and gas industry and a decrease in our general and administrative costs.
For the nine month period ending September 30, 2002, and the nine month period
ending September 30, 2001, our net loss before income taxes of $10,786 and
$133,446, respectively, representing an approximate 1,200% decrease in net
losses before income taxes. This was a result of our abandonment of our oil
and gas project and reverting back to our original business purpose; thereby,
incurring minimal operating costs.
We have incurred cumulative losses from March 19, 1999 (date of inception) to
September 30, 2002. At September 30, 2002, we had a cumulative deficit of
$183,080. We will continue to incur losses during the foreseeable future and
have yet to achieve any revenues with which to offset our operating expenses.
We will need additional working capital to develop our operations in our attempt
to achieve profitability. As of the date of this report, we have no agreements
or understandings with any third parties regarding additional capital, and we
cannot guarantee that we will be successful in obtaining capital upon terms
acceptable to us, if at all. Our failure to
2
secure necessary financing could have a material adverse effect on our financial
condition and results of operations. Additionally, for the period ended
September 30, 2002, we had a total shareholders' equity of $13,840.
Income Taxes
We record our income taxes in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". We incurred net operating
losses during the nine months ended September 30, 2002 resulting in a deferred
tax asset, which has been fully allowed for; therefore, the net benefit and
expense resulted in $-0- income taxes.
Liquidity and Financial Resources
We had working capital of $8,348 at the period ended September 30, 2002. For
the period ended September 30, 2002, cash used in operating activities was
$5,532, as compared to $10,986 for the nine month period ended September 30,
2001. For the nine month period ended September 30, 2002, there was no cash
used in or provided by investing activities as compared to using $5,435 for the
nine month period ended September 30, 2001. For the nine month period ended
September 30, 2002, financing activities provided $11,800 as compared to no cash
being provided by or used in the nine month period ended September 30, 2001. As
a result, net cash increased by $6,268 for the nine month period ended September
30, 2002, as compared to an decrease of $16,421 for the period ended September
30, 2001.
During the nine month period ended September 30, 2002, we sold 47,200 shares of
its common stock for $.25 per share pursuant to the exemptions afforded by
Section 4(2) of the Securities Act of 1933, as amended. We received gross
proceeds of $11,800.
For the next 12 months, we propose to satisfy our cash requirements by the
generation of revenues through earned commissions. Additionally we propose to
raise capital through the issuance of up to $50,000 of our $0.001 par value
common stock by virtue of a private placement. We my also explore the potential
of a public offering.
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings.
We have no legal proceedings in effect.
ITEM 2. Changes in Securities and Use of Proceeds.
There have been no changes in securities during this reporting period.
ITEM 3. Defaults Upon Senior Securities.
We incurred no defaults upon senior securities during this reporting period.
3
ITEM 4. Submission of Matters to a Vote of Security Holders.
None
ITEM 5. Other Information.
On September 24, 2002, the Company's Board of Directors appointed the following
individuals as Directors to the Board.
Timothy Jon Walz. Mr. Walz worked as a free lance photographer with
Videogrophor for a period of six years. Before that engagement, Mr. Walz worked
at KOLN and KGIN, T.V. stations for a period of four years. Mr. Walz worked two
and one-half years for Schranek's Video Production as the Production Manager and
was responsible for video taping an assortment of events such as football games,
weddings, etc. Mr. Walz graduated from Hastings Community College in 1985
located in Hastings, Nebraska.
Randal C. Gahm. Mr. Gahm from January of 1997 to the present has been employed
as a Senior System Specialist, by the Nebraska Book Company in Lincoln,
Nebraska, which owns and operates over 100 college text book stores across the
U.S. Mr. Gahm is responsible for all of the technical work needed to open the
book stores, which involves cabling, setting up the servers, and then
configuring all of the workstations, cash registers, and printers to work on the
network and then to provide any additional technical phone support. From March
1986 to January 1997, Mr. Gahm was employed by Wal-Mart as a department manager
in sporting goods, pets, automotive, hardware and paints. In 1995, Mr. Gahm
received a Diploma from Lincoln School of Commerce in Tour and Travel and in
1996, he received a Diploma from Lincoln School of Commerce in Technical
Computer Services.
Greg Andersen. Mr. Andersen is currently self employed in the custom framing
business. From November 2000 to June 2002, Mr. Andersen owned and managed a
small Lincoln, Nebraska business called 6 Red Custom Framing & Sports Art, Inc.
From December of 1992 to November 2000, Mr. Andersen was employed by Nebraska
Bookstore where he supervised the Custom Framing Department. In 1991, Mr.
Andersen received a Master of Arts in History from the University of Nebraska-
Lincoln and in 1985, Mr. Andersen received a Bachelor of Arts in History from
the University of New Mexico.
As of September 24, 2002, Mr. Frank H. Rodriguez resigned as a Director and Vice
President of the Company. Mr. Rodriguez did not have any disagreements with the
Company on any matter relating to Company's operations, policies or practices.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(b) Form 8-K
There have been no reports filed on Form 8-K for the period.
4
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
St. Joseph Energy, Inc.
(Registrant)
/s/David O. Johnson
____________________
David O. Johnson
President
Date: November 15, 2002
5
Exhibit "99.1"
CERTIFICATION OF PRINCIPAL EXECUTIVE,
ACCOUNTING AND FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of St. Joseph Energy, Inc. (the
"Company") on Form 10-QSB for the period ended September 30, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I
David O. Johnson, President of the Company, hereby certify pursuant to 18 U.S.C.
ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) the Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/S/David O. Johnson
__________________
David O. Johnson
President
November 15, 2002
CERTIFICATION OF PRINCIPAL EXECUTIVE,
ACCOUNTING AND FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of St. Joseph Energy, Inc. (the
"Company") on Form 10-QSB for the period ended September 30, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I
Kenneth L. Johnson, Secretary/Treasurer of the Company, hereby certify pursuant
to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) the Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/Kenneth L. Johnson
__________________
Kenneth L. Johnson
Secretary/Treasurer
November 15, 2002