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 March 31, 2003
[ ] 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 March 31, 2003
---------------------------------
2,748,920
$.001 par value common stock
ST. JOSEPH ENERGY, 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................ 3
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
period ended March 31, 2003 and 2002.................................. F-2
Unaudited Statements of Cash Flows for the Three-month
period ended March 31, 2003 and 2002.................................. F-3
Notes to Unaudited Condensed Financial Statements......................... F-4
1
ST. JOSEPH ENERGY, INC.
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
March 31, 2003
Assets
Current assets:
Cash............................................................. $ 2,411
Inventory, at cost............................................... 1,304
Total current assets 3,715
--------
Property and equipment, net...................................... 4,158
--------
$ 7,873
========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities......................... $ 27,750
--------
Total current liabilities.................................... 27,750
--------
Shareholders' equity (Note 5):
Preferred stock................................................ -
Common stock................................................... 2,749
Additional paid-in capital..................................... 195,371
Deficit accumulated during development stage................... (217,997)
--------
Total shareholders' equity................................... (19,877)
--------
$ 7,873
========
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 Through
March 31, March 31,
__________________
2003 2002 2003
__________ __________ __________
Operating expenses:
Professional fees.................$ 1,250 $ - $ 49,701
Investment loss .................. - - 119,500
Contributed rent (Note 2)......... 600 600 9,600
Compensation...................... - - 1,358
Office and shop supplies.......... 70 - 2,910
Depreciation...................... 433 901 10,205
Other............................. 9 9 9,223
---------- --------- ----------
Total operating expenses..... 2,362 1,510 202,497
---------- --------- ----------
Loss from operations......... (2,362) (1,510) (202,497)
Interest expense.................... - - (15,500)
---------- --------- ----------
Loss before income taxes..... (2,362) (1,510) (217,997)
Income tax provision (Note 3)....... - - -
---------- --------- ----------
Net loss.....................$ (2,362) $ (1,510) $ (217,997)
========== ========= ==========
Basic and diluted loss per share....$ (0.00) $ 0.00
========== =========
Weighted average common shares
outstanding....................... 2,748,920 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)
Three Months Ended Through
March 31, March 31,
_____________
2003 2002 2003
____ ____ ____
Net cash used in
operating activities................. $ (3,315) $ (9) $ (36,746)
-------- --------- ---------
Cash flows from investing activities:
Acquisition of property and equipment........... - - (14,363)
Payments for mineral lease interests............ - - (135,000)
-------- --------- ---------
Net cash used in
investing activities................. - - (149,363)
-------- --------- -------
Cash flows from financing activities:
Proceeds from the sale of common stock.......... - - 189,230
Payments for offering costs..................... - - (710)
-------- --------- ---------
Net cash provided by
financing activities................. - - 188,520
-------- --------- ---------
Net change in cash................... (3,315) (9) 2,411
Cash, beginning of period......................... 5,726 1,762 -
-------- --------- ---------
Cash, end of period............................... $ 2,411 $ 1,753 $ 2,411
======== ========= =========
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, 2002 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
months ended March 31, 2003 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) 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 all periods presented resulting in a
deferred tax asset, which has been fully allowed for; therefore, the net benefit
and expense resulted in $-0- income taxes.
F-4
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
filing, St. Joseph is in the business of selling artwork, only on a consignment
basis, from artists and owners through its web site. Orders will be placed
through the web site, which will set forth the purchase price of the artwork,
and the packaging, and the cost of ground transportation in the continental
United States.
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
period ended March 31, 2003, we did not generate any revenues as compared to
generating no revenues for the three month period ended March 31, 2002.
Operating Loss
As of the three month period ended March 31, 2003, we incurred a net loss before
income taxes of $2,362 as compared to a net loss before income taxes of $1,510
for the three month period ended March 31, 2002. This represents an increase in
net operating losses of approximately 56%. The increase in the net loss was a
result of our increase in operating expenses, which included the payment of
$1,250 in professional fees.
We have incurred cumulative losses from March 19, 1999 (date of inception) to
March 31, 2003. At March 31, 2003, we had a cumulative deficit of $217,997. 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 secure necessary financing could
have a material adverse effect on our financial condition and results of
operations. Additionally, for the period ended March 31, 2003, we had a total
shareholders' equity of ($9,877).
2
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 three months ended March 31, 2003, 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 negative working capital of $24,035 at the period ended March 31, 2003.
For the period ended March 31, 2003, cash used in operating activities was
$3,315, as compared to $9 for the three month period ended March 31, 2002. For
the three month period ended March 31, 2003, there was no cash used in or
provided by investing activities as compared to using or providing any cash
three month period ended March 31, 2003. For the three month period ended March
31, 2003, there was no cash provided by financing activities as compared to no
cash being provided by or used in the three month period ended March 31, 2003.
As a result, net cash decreased by $3,315 for the three month period ended March
31, 2003, as compared to an decrease of $9 for the period ended March 31, 2002.
During the three month period ended March 31, 2003, we did not issue any shares
of our common stock.
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.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None
3
ITEM 5. Other Information.
None
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.
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: May 20, 2003
4
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 March 31, 2003, 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
March 31, 2003
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 March 31, 2003, 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
May 20, 2003