UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549





FORM
10-K





|[X] | ANNUAL
    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------



For
the fiscal year ended:December 31, 2013



|[  ] | TRANSITION
    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | --------------------------------------------------------------------------------------



Commission
file number: 0-49936



ST.
JOSEPH, INC.

(Exact
name of registrant as specified in its charter)



|COLORADO                          |  | CH
    90-0197648      
|--------------------------------- |  | -----------------------
|(State
or other jurisdiction of   |  | (I.R.S.
    Employer   
|incorporationor
    organization) |  | Identification
    No.)



4870
S. Lewis, Suite 250, Tulsa, Oklahoma 74105

(Address
of principal executive offices)



(918)
742-1888

(Registrant’s
telephone number, including area code)



Securities
registered pursuant to Section 12(b) of the Act: None



Securities
registered pursuant to Section 12(g) of the Act:Class A Common Stock, par value $0.001



Indicate
by checkmark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No
[X]



Indicate
by checkmark if registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ]
No [X]



Indicate
by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes [X] No [  ]



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting
company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.



|Large
    Accelerated Filer | [  ] |  | Accelerated
    Filer         | [  ]
|--------------------------- | ---- |  | ----------------------------- | ----
|Non-Accelerated
    Filer   | [  ] |  | Smaller reporting
    company | [X] 



Indicate
by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Act). Yes [  ] No
[X]



Based
on the closing sale price of $0.43 of the registrant’s common stock on the last business day of our most recent third quarter,
ended September 30, 2013, the aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant
computed by reference to the price at which the common stock was last sold was $4,049,738.71.



As
of March 31, 2014, there were 12,705,341 shares of the registrant’s common stock issued and outstanding.


















ST.
JOSEPH, INC.



Form
10-K



For
the Fiscal Year Ended December 31, 2012



TABLE
OF CONTENTS





|         |                                                                                       |  | Page
|-------- | ------------------------------------------------------------------------------------- |  | ----
|PART I  
|Item 1.  | Business                                                                              |  | 4   
|Item 1A. | Risk Factors                                                                          |  | 6   
|Item 1B. | Unresolved Staff Comments                                                             |  | 11  
|Item 2.  | Description of Property                                                               |  | 11  
|Item 3.  | Legal Proceedings                                                                     |  | 11  
|Item 4.  | Mine Safety Disclosures                                                               |  | 11  
|         |                                                                                       |  |     
|PART II 
|Item 5.  | Market for Common Equity and Related Stockholder Matters                              |  | 12  
|Item 6.  | Selected Financial Data                                                               |  | 13  
|Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 13  
|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                            |  | 18  
|Item 8.  | Financial Statements                                                                  |  |     
|Item 9.  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure  |  | 19  
|Item 9A. | Controls and Procedures                                                               |  | 19  
|Item 9B. | Other Information                                                                     |  | 19  
|         |                                                                                       |  |     
|PART III
|Item 10. | Directors, Executive Officers, and Corporate Governance                               |  | 20  
|Item 11. | Executive Compensation                                                                |  | 24  
|Item 12. | Security Ownership of Certain Beneficial Owners and Management                        |  | 25  
|Item 13. | Certain Relationships and Related Transactions; Director Independence                 |  | 28  
|Item 14. | Principal Accounting Fees and Services                                                |  | 29  
|Item 15. | Exhibits, Financial Statement Schedules                                               |  | 30  
|         |                                                                                       |  |     
|         | SIGNATURES                                                                            |  | 31  







2







FORWARD
LOOKING STATEMENTS



This
Form 10-K, the other reports, statements, and information that we have previously filed or that we may subsequently file with
the Securities and Exchange Commission and public announcements that we have previously made or may subsequently make include,
may include, incorporate by reference or may incorporate by reference certain statements that may be deemed to be “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements
relate to such matters as, among other things, our anticipated financial performance, business prospects, technological developments,
new products, future distribution or license rights, international expansion, possible strategic alternatives, new business concepts,
capital expenditures, consumer trends and similar matters.



Forward
looking statements necessarily involve known and unknown risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance,
or achievement expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements
by terminology such as “may,” “will,” “should,” “could,” “intend,”
“expect,” “anticipate,” “assume”, “hope”, “plan,” “believe,”
“seek,” “estimate,” “predict,” “approximate,” “potential,” “continue”,
or the negative of such terms. Statements including these words and variations of such words, and other similar expressions, are
forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable
based upon our knowledge of our business, we cannot absolutely predict or guarantee our future results, levels of activity, performance,
or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements.



We
note that a variety of factors could cause our actual results and experience to differ materially from the anticipated results
or other expectations expressed in our forward-looking statements. The risks and uncertainties that may affect the operations,
performance, development and results of our business include, but are not limited to, the following: changes in consumer spending
patterns; changes in consumer preferences and overall economic conditions; the impact of competition and pricing; the financial
condition of the suppliers and manufacturers from whom we source our merchandise; economic and political instability in foreign
countries or restrictive actions by the governments of foreign countries in which suppliers and manufacturers from whom we source
products are located or in which we may actually conduct or intend to expand our business; changes in tax laws, or the laws and
regulations governing direct or network marketing organizations; our ability to hire, train and retain a consistent supply of
reliable and effective participants in our direct or network marketing operation; general economic, business and social conditions
in the United States and in countries from which we may source products, supplies or customers; the costs of complying with changes
in applicable labor laws or requirements, including without limitation with respect to health care; changes in the costs of interest
rates, insurance, shipping and postage, energy, fuel and other business utilities; the reliability, longevity and performance
of our licensors and others from whom we derive intellectual property or distribution rights in our business; the risk of non-payment
by, and/or insolvency or bankruptcy of, customers and others owing indebtedness to us; threats or acts of terrorism or war; and
strikes, work stoppages or slowdowns by unions affecting businesses which have an impact on our ability to conduct our own business
operations.



Forward-looking
statements that we make, or that are made by others on our behalf with our knowledge and express permission, are based on knowledge
of our business and the environment in which we operate, but because of the factors listed above, actual results may differ from
those in the forward-looking statements. Consequently, these cautionary statements qualify all of the forward-looking statements
we make herein. We cannot assure the reader that the results or developments anticipated by us will be realized or, even if substantially
realized, that those results or developments will result in the expected consequences for us or affect us, our business or our
operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements, which speak
only as of their dates, or on any subsequent written and oral forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by these cautionary statements. We do not undertake any obligation to
release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or
thereof or to reflect the occurrence of unanticipated events.



3







PART
I



Item
1. Business



Company
Overview



St.
Joseph, Inc.was organized under the laws of the State of Colorado on March 19, 1999 as Pottery Connection, Inc. Our Company
was originally organized to produce and sell pottery of all forms, as well as arts and crafts through the Internet. On March 19,
2001, we changed our corporate name to St. Joseph Energy, Inc. in anticipation of changing our business purpose to the exploration
and development of oil and gas properties. However, after unsuccessfully investing in two oil wells located in the State of Louisiana,
we elected to abandon that endeavor and return to our original business purpose.



On
November 6, 2003, we changed our corporate name to St. Joseph, Inc.



Staf*Tek
was organized under the laws of the State of Oklahoma on January 2, 1997. On December 2, 2003, we acquired all of the issued and
outstanding shares of common stock of Staf*Tek stock in exchange for (1) 380,500 shares of our Series A Preferred Shares (“Series
A Shares”); (2) 219,500 shares of our common stock; and (3) $200,000 in cash. The acquisition closed on January 2, 2004,
at which time Staf*Tek became a wholly owned subsidiary of St. Joseph.



We
also hope to acquire other operating companies as subsidiaries and are pursuing suitable candidates for future acquisition that
could potentially create value for our existing shareholders. Acquisition targets may be in sectors other than our current sector
of providing employment agency services. Although it is not our goal, we would also consider a reverse merger opportunity, if
it were seen to be a value creation opportunity for our existing shareholders.



To
date, we have not consummated any acquisition and cannot provide any assurance that we will be successful in this endeavor. Any
acquisition may be structured as a share exchange and may result in significant dilution to our existing shareholders.



Proposed
Reverse Acquisition of Zone USA, Inc.



On
August 7, 2012, St. Joseph entered into a nonbinding Letter of Intent with Karavos Holdings Limited, a subsidiary of e-Kong Group,
Ltd, which is a Bermuda company, headquartered in Hong Kong and traded on the Hong Kong Stock Exchange. The Letter of Intent provides
for St. Joseph to acquire 100% of Zone USA, Inc., which has a 50% ownership position in ANZ Communications, LLC.



The
Letter of Intent contemplates the transaction being structured as a reverse acquisition with St. Joseph purchasing Zone USA’s
50% ownership position in ANZ Communications in return for the issuance to Karavos Holdings Limited of (i) such number of shares
of common stock that will be equal to not less than 80% of the total issued and outstanding shares of St. Joseph on a fully diluted
and converted basis, or (ii) preferred stock convertible into such number of common stock. In addition, the Letter of Intent contemplates
that the execution of a definitive agreement for the RTO is conditional on the involved parties being satisfied with their initial
due diligence reviews, and the raising by St. Joseph of not less than $14 million in net proceeds. It is also contemplated that
the definitive agreement will contain customary representations, warranties, covenants, undertakings and indemnities, including
by the Company’s principal shareholders, together with non-competition agreements required by the Zone USA Investor (or
its affiliates) relating to the existing Company’s business and restraints on the disposal by the Company’s principal
shareholders’ shares in the Company post-closing for an agreed period.



The
proposed transaction may be subject to the approval of our shareholders and the approval of Karavos Holdings Limited owners. The
approvals necessary will depend on the transaction structure contained in any definitive agreement that may be entered into. We
cannot provide any assurance that the required approvals will be granted, and in the event they are not, we will not be able to
proceed with the transaction. Any consummation of the proposed transaction will need to be performed in compliance with applicable
securities laws and regulations, and may require the filing of comprehensive disclosure documents which may add to the expense
and time needed for the completion of the transaction. Depending on the final transaction structure we may need to register as
an Investment Company under the Investment Company Act of 1940 or obtain an exemption from such registration. In such event, we
may have to abandon the transaction of we not able to register as an Investment Company or not able to obtain an exemption. Our
management cautions investors against making investment decisions based on any expectation that the proposed transaction will
be consummated, or that the proposed transaction will result in any increase in share value, because, in its view, such expectations
are speculative.



4







The
Letter of Intent contemplates that if the parties proceed with the transaction, on its consummation, St Joseph’s board of
directors and executive officers will be replaced by nominees to be named by the existing equity holders of Zone USA.



Staf*Tek
Services, Inc.



Staf*Tek
specializes in the recruiting and placement of professional technical personnel, as well as finance and accounting personnel on
a temporary and permanent basis. Staf*Tek provides its customers with employee candidates with information technology (“IT”)
skills in areas ranging from multiple platform systems integration to end-user support, including specialists in programming,
networking, systems integration, database design, help desk support, including senior and entry level finance and accounting candidates.
Staf*Tek’s candidate databases contain information on the candidates experience, skills, and performance and are continually
being updated to include information on new referrals and to update information on existing candidates. Staf*Tek responds to a
broad range of assignments from technical one-person assignments to major projects including, without limitation, Internet/Intranet
development, desktop applications development, project management, enterprise systems development, SAP implementation and legacy
mainframe projects. Staf*Tek also provides employee candidates computer training, online assessments, certification and the opportunity
to be tested and certified in over 50 skill sets.



Staf*Tek
was founded on the premise that there is an increasing demand for high quality outsourced professional services. Staf*Tek’s
business premise combines client service orientation and commitment to quality. Staf*Tek is positioned to take advantage of what
we believe are two converging trends in the outsourced professional services industry — increasing demand for outsourced
professional services by corporate clients and increasing the supply of professionals interested in working on an outsourced basis.
Staf*Tek believes that its business premise allows it to offer challenging yet flexible career opportunities, attract highly qualified,
experienced professionals and, in turn, attract clients with varying professional needs.



Staf*Tek
is primarily a regional professional service firm that provides experienced and highly qualified personnel who can demonstrate
diversity, and flexibility in the work force. Staf*Tek has determined that its market is primarily in the Tulsa, Oklahoma area.



Supply
of Professionals



Concurrent
with the growth in the demand for outsourced services, Staf*Tek is of the belief, based on discussions with its associates that
the number of professionals seeking work on a project and non-project basis has increased due to a desire for:



| | ● | more
    flexible hours and work arrangements, coupled with competitive wages and benefits; and
| | - | -----------------------------------------------------------------------------------------------
| |   |                                                                                                
| | ● | challenging
    engagements that advance careers, develop skills, and add to experience.       



Staf*Tek
maintains its own database of approximately 20,000 trained independent contract professionals. Once a professional is placed,
he or she either becomes an employee of our Company or the client’s employee.



Marketing
and Recruiting



Staf*Tek
markets its temporary and permanent staffing services to business clients as well as employment candidates. Marketing and recruiting
directed to business clients and employment candidates consists primarily of yellow pages advertisements, classified advertisements,
websites, internet job sites, trade shows and website promotion on the Internet. We and our subsidiaries have registered the following
domain names: staftek.com and stjosephinc.com.



Management
of the Staf*Tek’s temporary and permanent staffing operations is coordinated from our headquarters in Tulsa, Oklahoma. Our
headquarters provides support and centralized services related to administrative, marketing, public relations, accounting and
training.





5









Competition



Staf*Tek’s
temporary and permanent staffing services face competition in attracting clients as well as high-quality specialized employment
candidates. The temporary and permanent placement businesses are highly competitive, with a number of firms offering services
similar to those provided by Staf*Tek on a national, regional or local basis. In many areas the local companies are the most successful
competitors. The most significant competitive factors in the temporary and permanent placement businesses are price and the reliability
of service, both of which are often a function of the availability and quality of professional personnel. We believe that Staf*Tek
derives a competitive advantage from its extensive experience and commitment to the specialized employment market, temporary employees
placed by it are, in fact, Staf*Tek’s employees for all purposes while they are working on assignments. Once a professional
is permanently placed, he or she either becomes an employee of Staf*Tek or of Staf*Tek’s client. During the temporary phase,
Staf*Tek pays the related costs of employment, such as workers’ compensation insurance, state and federal unemployment taxes,
social security and certain fringe benefits. Staf*Tek provides access to voluntary

health
insurance coverage to interested employees.



Major
Clients



Staf*Tek
is currently dependent on one client for all of our revenues and this client was a significant percentage of our revenues during
our year ended December 31, 2013. Approximately 84.6% of our revenues were derived from this client and all of our revenues were
derived from a total of three clients, during the year ended December 31, 2013.



Employees



As
of December 31, 2013, we had approximately 4 full time employees and no part-time employees.



Available
Information



We
file electronically with the U.S. Securities and Exchange Commission (SEC) our annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934. The public can obtain materials that we file with the SEC through the SEC’s website
at http://www.sec.gov or at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Information on the
operation of the Public Reference Room is available by calling the SEC at 800-SEC-0330.



Item
1A. Risk Factors



You
should carefully consider the risks described below, together with all of the other information included in this report, in considering
our business and prospects. The risks and uncertainties described below are not the only ones facing the Company. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. The
occurrence of any of the following risks could harm our business, financial condition or results of operations.



Risks
Related to Our Business and Industry



Our
business prospects are subject to various risks and uncertainties that impact our business. The most important of these risks
and uncertainties are as follows:



Our
auditor has expressed substantial doubt as to our ability to continue as a going concern. An inability to continue as a going
concern would likely lead to a loss of your entire investment.



Our
independent certified public accountant’s report on our financial statements for the fiscal years ended December 31, 2013
and 2013 contains an explanatory paragraph indicating that we have incurred recurring losses, and as of December 31, 2013, had
negative working capital and a net capital deficiency. These factors raise substantial doubt about our ability to continue as
a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this
uncertainty.



6







Our
revenues and our total assets have declined precipitously over the last several years while our stockholder’s deficit has
increased, creating doubt as to our ability to continue our operations or achieve profitability.



During
our 2013 fiscal year, we had revenues of $215,589, down from $427,376 in our 2012 fiscal year, and down from $467,907 in our 2011
fiscal year. As of December 31, 2013 we had total assets of $62,849, up from $37,545 on December 31, 2012 and down from $86,553
on December 31, 2011. Over this period of time, our total stockholders’ deficit increased to $888,721 as of December 31,
2013, as compared to $645,798 as of December 31, 2012 and $419,083 as of December 31, 2011. These declines in our revenues and
asset value, combined with our growing stockholders’ deficit create doubt that we will be able to remain in operation or
achieve profitability. We have been relying primarily on funds raised from the sale of our shares in private placements. However,
our declining business operations may increase the difficulty of raising additional funds. If we are unable to reverse these trends,
we may go out of business, and our stockholders may lose their entire investment.



We
may engage in a “reverse merger” acquisition, resulting in severe dilution to existing stockholders.



In
the event we engage in a merger or acquisition, it is likely that the transaction will be structured as a” reverse merger”
that would result in severe dilution to existing stockholders. In connection with any such reverse merger, our stock may be subject
to a reverse stock split, and the value of our stockholder’s shares may be negatively impacted. We can provide no assurance
that we will engage in any reverse merger, or any other merger or acquisition transaction.



We
will require substantial additional capital to pursue our business plan.



We
have financed our operations largely through debt and the sale of equity securities. Our capital requirements will depend on many
factors, including, among other things, the cost of developing our business and marketing activities, the efficacy and effectiveness
of our proposed services, costs (whether or not foreseen), the length of time required to collect accounts receivable we may in
the future generate. Changes in our proposed business or business plan could materially increase our capital requirements. We
cannot assure you that our proposed plans will not change or that changed circumstances will not result in the depletion of our
capital resources more rapidly than currently anticipated.



We
will need to obtain substantial additional financing to, among other things, secure net proceeds of $14,000,000 in connection
with the Planned Reverse Acquisition Transaction of Zone USA, Inc. Any additional equity financing, if available, may be dilutive
to stockholders and any such additional equity securities may have rights, preferences or privileges that are senior to those
of the holders of shares of our Common Stock. Debt financing, if available, will require payment of interest and may involve our
granting security interests on our assets and restrictive covenants that could impose limitations on our operating flexibility.



In
December 2013, we engaged Brean Capital, LLC, an independent investment bank and asset management firm, to serve as our Company’s
exclusive corporate finance advisor and investment banker. In connection with the Planned Reverse Acquisition Transaction of Zone
USA, Inc., Brean will work with our Company towards consummating the Transaction and providing other customary investment banking
services, as required, to include raising net proceeds of $14,000,000 to consummate the Transaction with Zone USA. Our ability
to obtain needed financing, with or without the assistance of Brean, may be impaired by such factors as the capital markets, our
capital structure, the lack of an active market for shares of our Common Stock, and our lack of profitability, all of which would
impact the availability or cost of future financings. We cannot assure prospective investors that we will be able to obtain requisite
financing in a timely fashion or at all and, if obtained, on acceptable terms. Our inability to obtain needed financing on acceptable
terms would have a material adverse effect on the implementation of our proposed business plan.



If
we default on our secured bank loan, the bank may foreclose on substantially all of our assets, putting us out of business.



We
have an outstanding bank loan that is secured by substantially all of our assets. As of December 31, 2013, the outstanding balance
on this loan was $118,202. The bank loan which had a maturity date of August 31, 2013 called for payments of principal and interest
in the amount of $2,698 per month with a final balloon payment in the amount of $117,937, which came due on its maturity date
of August 31, 2013. On September 9, 2013, the Company received a default letter from the bank. Since that time the bank has requested
the company bring the loan current by making monthly payments of $2,698 plus late fees of $50 per month for the nine months which
the Company is delinquent, for the total amount as of March 31, 2014 of $24,732, which includes principal, interest and fees.
At such time the Company is able to bring the loan current the bank stated the remaining balance will be refinanced, which terms
are yet to be determined. At this time the principal loan balance continues to bear 6.5% interest. In the event the Company is
unable to bring the bank loan current the bank may foreclose which would force the Company out of business.



7







We
operate solely through our subsidiary, Staf*Tek Services, Inc.; our revenues are dependent on the performance of our subsidiary.



We
operate and generate revenues solely through our subsidiary, Staf*Tek. St. Joseph, Inc. has not generated any revenues since its
inception and does not expect to generate any revenues in the future. Our success depends on the success of Staf*Tek and there
is no assurance that we can achieve profitability through Staf*Tek in the future. Our performance will depend on our ability to
manage this anticipated growth effectively by hiring key management personnel, implementing and maintaining operational, administrative,
marketing and control systems on a timely basis, building and maintaining our network infrastructure, conducting successful marketing
and sales programs, attracting and retaining qualified employees and having access to working capital to support the growth in
inventory, receivables, capital requirements and operating costs necessitated by the assumed increased sales.



From
time to time, we may need additional capital to meet the objectives of our business plan, and there is no assurance that we will
be able to raise such capital or that such financing will be on terms that are favorable or acceptable to us.



The
placement of temporary employees requires substantial additional capital to fund our working capital needs. When an employee is
placed on a temporary basis, an invoice is generated for the placement fee, which may not be paid for a number of weeks while
the employment costs are immediately incurred. Thus, even though, in the long run, our success in placing temporary employees
will enhance our revenues; in the short term, our increasing placement of temporary employees is decreasing our liquidity. Accordingly,
to remain viable, we must substantially increase our revenues, raise additional capital, increase our credit facilities, and/or
reduce our operations. In the event that our plans or assumptions change or prove to be inaccurate, or if delays increase the
payment of our placement fees, we may be required to raise additional funds through the issuance of equity securities, in which
case the percentage ownership of our current stockholders will be diluted. Such equity securities may also have rights, preferences
or privileges senior to common stock. Furthermore, there can be no assurance that additional financing will be available when
needed on terms favorable to us or at all. If we are unable to raise more money, our growth could be impeded, and our business
could be materially adversely affected.



Our
failure to effectively manage growth could have a material adverse effect on our business and operations.



If
we are able to grow our business, such growth could occur rapidly at an uneven pace. Such growth will place a significant strain
on our management systems and resources. We will need to continue to improve our operational and financial systems and managerial
controls and procedures, and we will need to continue to expand, train and manage our workforce. We will have to maintain close
coordination among our technical, accounting, finance, marketing and sales personnel.



If
we lose key personnel or fail to integrate replacement personnel successfully, our ability to manage our business could be impaired.



Our
future success depends upon the continued service of our key management and other critical personnel such as John Blackmon. Whether
we are able to execute our business strategy effectively will depend in large part on how well key management and other personnel
perform in their positions and are integrated within our company. There is no assurance that we will be able to retain these key
management and personnel. The loss of any key employee could result in significant disruptions to our operations, the successful
implementation and completion of company initiatives and the results of our operations. In addition, the integration of replacement
personnel could be time consuming, may cause additional disruptions to our operations and may be unsuccessful.



Factors
outside of our control may adversely affect our operations and operating results.



The
demand for our temporary and permanent staffing services is highly dependent upon the state of the economy and upon the staffing
needs of our clients. Any variation in the economic condition or unemployment levels in the United States or in the economic condition
of the region where our clients are located, or in any specific industry may severely reduce the demand for our services and thereby
significantly decrease our revenues and profits. Furthermore, our temporary and permanent staffing services business consists
of the placement of individuals seeking temporary and permanent employment. There can be no assurance that qualified candidates
for employment will continue to seek employment through Staf*Tek. Qualified candidates generally seek temporary or permanent positions
through multiple sources, including Staf*Tek and its competitors. Any shortage of qualified candidates could materially adversely
affect our revenues.



8







Our
market is competitive, and our financial results and financial condition could be adversely affected if we are unable to anticipate
or react to this competition.



The
market for temporary and permanent staffing services is highly competitive and, because it is a service business, the barriers
to entry are quite low. There are many competitors, some of which have greater resources than us, and new competitors are constantly
entering the market. In addition, long-term contracts form a negligible portion of our revenues. Therefore, there can be no assurance
that we will be able to retain clients or market share in the future. Nor can there be any assurance that we will, in light of
competitive pressures, be able to remain profitable or maintain our current profit margins. If we fail to compete successfully
in this highly competitive market, our business, financial condition, and results of operations will be materially and adversely
affected.



We
depend on attracting and retaining qualified candidates; during periods of economic growth, our costs to do so increases and it
becomes more difficult to attract and retain people.



The
success of our staffing services depends on our ability to attract and retain qualified employees for placement with our customers.
Our ability to attract and retain qualified personnel could be impaired by rapid improvement in economic conditions resulting
in lower unemployment and increases in compensation. During periods of economic growth, we face growing competition for retaining
and recruiting qualified personnel, which in turn leads to greater advertising and recruiting costs and increased salary expenses.
If we cannot attract and retain qualified employees, the quality of our services may deteriorate and our reputation and results
of operations could be adversely affected.



Our
inability to attract and retain qualified employees could have a material adverse effect on our business, financial condition
and results of operations.



Our
business involves the delivery of professional services and is very labor intensive. Our success depends in large part upon
our ability to attract, develop, motivate and retain highly skilled technical employees. We can experience high turnover of
our personnel and are often required to recruit and train replacement personnel as a result of a changing and expanding work
force. Accordingly, we may experience increased compensation costs that may not be offset through either increased
productivity or higher customer pricing. Furthermore, the market for IT services change rapidly because of technological
innovation, new product introductions, changes in customer requirements, evolving industry standards and many other factors.
New products and new technology often render existing information services or technology infrastructure obsolete, excessively
costly or otherwise unmarketable. As a result, our success depends on our ability to attract and retain qualified employee
candidates who are knowledgeable and familiar with these new products and technologies. We cannot guarantee that we will be
successful in recruiting and retaining sufficient numbers of qualified employee candidates in the future, especially when we
need to expand our services in a short time period. Our inability to attract and retain qualified personnel, or increases in
wages or other costs of attracting, training or retaining qualified personnel, could have a material adverse effect on our
business, financial condition and results of operations.



84.6%
of our revenues come from one client.



During
our year ended December 31, 2013, approximately 84.6% of our revenues were derived from our largest client. The loss of this client
or the decline in business from this client would have a material adverse effect on our revenues and profits. Accordingly, any
events that create an adverse affect on this client’s operations or financial performance will also create a material adverse
effect on our revenues and profits.



Risk
Relating to the Planned Reverse Acquisition Transaction with Zone USA, Inc.



The
Planned Reverse Acquisition Transaction by which we acquire Zone USA, Inc. may never take place, or may take place on terms different
from those contemplated by the Letter of Intent.



Investors
are cautioned that the Company can provide no assurance that the transaction will be consummated, or if consummated that it will
have the terms described in the Letter of Intent. The Company is not a party to any binding agreement for the Planned Reverse
Acquisition Transaction, nor can it provide any assurance that it will enter into one. Currently, the Company and Karavos Holdings
Limited have only entered into a Letter of Intent that is nonbinding as to the consummation of the Planned Reverse Acquisition
Transaction or its terms. Any binding obligation to proceed with the transaction would need to be included in a definitive agreement
negotiated between the parties. Our management understands that a definitive agreement will be negotiated only after $14,000,000
in net proceeds being raised. Moreover, the definitive agreement for the Planned Reverse Acquisition Transaction may contain indemnification
or ― claw back provisions. At or prior to the time of the Planned Reverse Acquisition Transaction, it is possible that Zone
USA may have suffered from material adverse changes in its business, assets or financial condition, including for example, adverse
changes resulting from political, economic or financial conditions, changes in the industry conditions, changes in law, changes
in generally accepted accounting principles, changes in Zone USA’s business operations, changes resulting from the loss
of key customers or declines in revenue, changes resulting from failure to comply with

applicable
laws and regulations, changes resulting from lawsuits or the failure to comply with contracts.





9







The
Company can provide no assurance that the terms of any definitive agreement for the Planned Reverse Acquisition Transaction will
protect against any such adverse material changes by allowing the Company not to proceed with the transaction or by providing
for adjustments in the terms of the transaction. Further, even if the definitive agreement does allow for the Company to terminate
the transaction in the event of any such adverse material changes, the Company can provide no assurance that its management will
elect to exercise such rights.



The
Company’s future capital structure and management is subject to substantial uncertainty in connection with the Planned Reverse
Acquisition Transaction with Zone USA, Inc.



Because
the Company plans on proceeding with the reverse acquisition of Zone USA, Inc. immediately if it is successful at securing the
required $14 million in net proceeds, the Company’s management, business and corporate structure are all subject to substantial
uncertainty. Pursuant to the Letter of Intent, as supplemented by prior negotiations, any consummation of the Planned Reverse
Acquisition Transaction is expected to result in a company to be nominated by the beneficial owner of Zone USA, that is a subsidiary
of e-Kong Group Limited, a company organized in Bermuda and headquartered in Hong Kong holding 80% or more of the Company’s
common stock on a fully diluted basis, the business of Zone USA, Inc. would become the business of the Company, and the Zone USA
Investor would appoint new officers and directors of the Company.



There
is no definitive agreement in place and we can make no assurances as to what the final terms will be. Even if the final terms
of any reverse acquisition are in keeping with our expectations, it is expected that the Zone Investor will have discretion regarding
the appointment of our officers and directors, and our board and management may therefore deviate, possibly substantially, from
that of the current board and management of Zone USA, Inc. Additionally, the net proceeds used in this offering may be used for
a

variety
of purposes and may be invested into ANZ Communications, LLC assuming that Zone USA is allowed to make capital contributions,
but may also be used for acquisitions of other assets or for other purposes.



Investors
are cautioned that the Company can provide no assurance that the transaction will be consummated. The Company is not party to
any binding agreement for the Planned Reverse Acquisition Transaction, nor can it provide any assurance that it will enter into
one. Currently, the Company and Karavos Holdings Limited have only entered into a Letter of Intent that is nonbinding as to the
consummation of the proposed acquisition or its terms. Any binding obligation to proceed with the transaction would need to be
included in a definitive agreement negotiated between the parties. Our management understands that a definitive agreement will
be negotiated only after this Offering is completed with at least $14 million in net proceeds being raised.



Our
common stock is subject to the SEC’s Penny Stock Regulations which may affect the liquidity for our stock, the ability of
our stockholders to resell their shares through a broker-dealer, and their ability to obtain accurate price quotations.



Our
common stock is subject to the SEC’s “penny stock” rules. These regulations define a “penny stock”
to be any equity security that has a market price (as defined) of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, these rules require the delivery, prior to the transaction, of a disclosure
schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable
to the broker-dealer and the registered underwriter, current quotations for the securities, information on the limited market
in penny stocks and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealers’
presumed control over the market. In addition, the broker-dealer must obtain a written statement from the customer that such disclosure
information was provided and must retain such acknowledgment for at least three years. Further, monthly statements must be sent
disclosing current price information for the penny stock held in the account. The penny stock rules also require that broker-dealers
engaging in a transaction in a penny stock make a special suitability determination for the purchaser and receive the purchaser’s
written consent to the transaction prior to the purchase. The foregoing rules may materially and adversely affect the liquidity
for the market of our common stock, if any such public market develops. Such rules may also affect the ability of broker-dealers
to sell our common stock in any such public market, the ability of holders of such securities to obtain accurate price quotations
and may therefore impede the ability of holders of our common stock to sell such securities in the secondary market.





10









Item
1B. Unresolved Staff Comments



Not
applicable.



Item
2. Description of Property



We
lease approximately 2,286 square feet of office space from a non-affiliated third party at 4870 South Lewis, Suite 250, Tulsa,
OK 74105. Our monthly lease payment is $2,715. We currently lease this office on a month-to-month basis.



Item
3. Legal Proceedings



On
or about January 24, 2012, our subsidiary, Staf*Tek Services, Inc. was served notice that Danny McGowan, a former employee hired
and assigned to work for Staf*Tek’s client as a contractor, filed a lawsuit against Staf*Tek Services, Inc. and its client
in the District Court in Tulsa County, Oklahoma, Case No. CJ-2011-7039, in connection with a wrongful termination complaint. Mr.
McGowan alleges that he was terminated after one month of employment, but feels he had a guaranteed contract for six months. The
wording in his employment agreement that he identifies as guaranteeing his employment for six months was inserted at the request
of Staf*Tek’s client.



Staf*Tek’s
client terminated Mr. McGowan for performance issues after one month of employment. Mr. McGowan filed a lawsuit against Staf*Tek
and the client and subsequently filed a motion for default judgment, which was granted by the judge. On March 9, 2012, Staf*Tek
filed a motion to vacate the default judgment and requested a new trial. Staf*Tek has engaged counsel and intends to vigorously
defend this action. As of this date, the client that terminated Mr. McGowan has been dismissed from the lawsuit by the judge because
they had not been served within six months of the original filing of the lawsuit by Mr. McGowan’s counsel. Mr. McGowan and
his attorney were three weeks late responding to our request for discovery and we requested dismissal. However, the judge did
not grant dismissal. Mr. McGowan is seeking damages against Staf*Tek in an amount in excess of $75,000, not to exceed $85,000.
Management deems the suit to be without merit, however, the costs of defending against the complaint could be substantial. In
the event judgment is made against the Company and payment deemed appropriate it may force the Company out of business.



Item
4. Mine Safety Disclosures



Not
applicable.



11







PART
II



Item
5. Market for Common Equity and Related Stockholder Matters



(a)
Market Information



Our
Class A common stock is quoted on the OTC Markets under the symbol “STJO”. The following table shows the high and
low closing prices for the periods indicated.



|Quarter
    ended      |  | High |      |  | Low |  
|---------------------- |  | ---- | ---- |  | --- | -
|March
    31, 2013     |  | $    | 0.88 |  |     | $
|June
    30, 2013      |  | $    | 0.85 |  |     | $
|September
    30, 2013 |  | $    | 0.43 |  |     | $
|December
    31, 2013  |  | $    | 0.49 |  |     | $



|Quarter
    ended      |  | High |      |  | Low |  
|---------------------- |  | ---- | ---- |  | --- | -
|March
    31, 2012     |  | $    | 0.70 |  |     | $
|June
    30, 2012      |  | $    | 0.53 |  |     | $
|September
    30, 2012 |  | $    | 1.00 |  |     | $
|December
    31, 2012  |  | $    | 1.20 |  |     | $



The
above information was obtained from Yahoo! Finance. Because these are over the counter market quotations, these quotations reflect
inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions. There is currently
no public trading market for our preferred stock.



(b)
Holders of Common Equity.



As
of March 31, 2014, there were approximately 290 holders of record of our common stock. This figure does not take into account
those shareholders whose certificates are held in the name of broker-dealers or other nominees.



(c)
Dividend Information.



We
have never paid any cash dividends on our common shares, and we do not anticipate that we will pay any dividends with respect
to those securities in the foreseeable future. It is our present policy to not to pay cash dividends on our common stock but to
retain earnings, if any, to fund growth and expansion. Any payment of cash dividends of the common stock in the future will be
dependent upon our financial condition, results of operations, current and anticipated cash requirements, plans for expansion,
as well as other factors the Board of Directors deems relevant.



(d)
Sales of Unregistered Securities



In
a private placement during the year ended December 31, 2013, the Company sold 410,000 shares of common stock to accredited investors
at a price of $0.50 per share for gross proceeds totaling $205,000. No underwriters were used and no underwriting discounts or
commissions were payable. The shares have been offered and sold by the Company in reliance upon the exemption from registration
provided by Regulation D promulgated under the Securities Act of 1933, as amended. The shares were offered and sold only to accredited
investors; as such term is defined by Rule 501 of Regulation D. All of the shares sold in the private placement are restricted
securities pursuant to Rule 144.



In
a private placement during the year ended December 31, 2012, the Company sold 190,000 shares of common stock to accredited investors
at a price of $0.50 per share for gross proceeds totaling $95,000. No underwriters were used and no underwriting discounts or
commissions were payable. The shares have been offered and sold by the Company in reliance upon the exemption from registration
provided by Regulation D promulgated under the Securities Act of 1933, as amended. The shares were offered and sold only to accredited
investors; as such term is defined by Rule 501 of Regulation D. All of the shares sold in the private placement are restricted
securities pursuant to Rule 144.



12









During
the year ended December 31, 2012, a Director of the Company exercised 7,500 shares of its common stock at a strike price of $1.05
per share for total consideration of $7,875.



The
securities mentioned above were not registered under the Securities Act of 1933, as amended (the “Securities Act”),
and qualified for exemption under Section 4(2) of the Securities Act because the issuance of the securities did not involve a
public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number
of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered.



Transfer
Agent



Our
transfer agent is Corporate Stock Transfer, Inc. at 3200 Cherry Creek South Drive, Suite 430, Denver, Colorado 80209.



Item
6. Selected Financial Data



Not
applicable.



Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations



This
Annual Report on Form 10-K and other reports filed by St. Joseph, Inc. (the “Company”) from time to time with the
U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information
that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and
assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements,
which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,”
“believe,” “estimate,” “expect,” “future,” “intend,” “plan,”
or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify
forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject
to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section
of the this Annual Report on Form 10-K., relating to the Company’s industry, the Company’s operations and results
of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize,
or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed,
estimated, expected, intended, or planned.



Although
the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee
future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities
laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements
to actual results.



Our
financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments
and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments
and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities
as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented.
Our financial statements would be affected to the extent there are material differences between these estimates and actual results.
In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s
judgment in its application. There are also areas in which management’s judgment in selecting any available alternative
would not produce a materially different result. The following discussion should be read in conjunction with our consolidated
financial statements and notes thereto appearing elsewhere in this report.



13







Business
Description



St.
Joseph, Inc.was organized under the laws of the State of Colorado on March 19, 1999 as Pottery Connection, Inc. Our Company
was originally organized to produce and sell pottery of all forms, as well as arts and crafts through the Internet. On March 19,
2001, we changed our corporate name to St. Joseph Energy, Inc. in anticipation of changing our business purpose to the exploration
and development of oil and gas properties. However, after unsuccessfully investing in two oil wells located in the State of Louisiana,
we elected to abandon that endeavor and return to our original business purpose.



On
November 6, 2003, we changed our corporate name to St. Joseph, Inc.



Staf*Tek
was organized under the laws of the State of Oklahoma on January 2, 1997. On December 2, 2003, we acquired all of the issued and
outstanding shares of common stock of Staf*Tek stock in exchange for (1) 380,500 shares of our Series A Preferred Shares (“Series
A Shares”); (2) 219,500 shares of our common stock; and (3) $200,000 in cash. The acquisition closed on January 2, 2004,
at which time Staf*Tek became a wholly owned subsidiary of St. Joseph.



We
also hope to acquire other operating companies as subsidiaries and are pursuing suitable candidates for future acquisition that
could potentially create value for our existing shareholders. Acquisition targets may be in sectors other than our current sector
of providing employment agency services. Although it is not our goal, we would also consider a reverse merger opportunity, if
it were seen to be a value creation opportunity for our existing shareholders.



To
date, we have not consummated any acquisition and cannot provide any assurance that we will be successful in this endeavor. Any
acquisition may be structured as a share exchange and may result in significant dilution to our existing shareholders.



Staf*Tek
Services, Inc.



Staf*Tek
specializes in the recruiting and placement of professional technical personnel, as well as finance and accounting personnel on
a temporary and permanent basis. Staf*Tek provides its customers with employee candidates with information technology (“IT”)
skills in areas ranging from multiple platform systems integration to end-user support, including specialists in programming,
networking, systems integration, database design, help desk support, including senior and entry level finance and accounting candidates.
Staf*Tek’s candidate databases contain information on the candidates experience, skills, and performance and are continually
being updated to include information on new referrals and to update information on existing candidates. Staf*Tek responds to a
broad range of assignments from technical one-person assignments to major projects including, without limitation, Internet/Intranet
development, desktop applications development, project management, enterprise systems development, SAP implementation and legacy
mainframe projects. Staf*Tek also provides employee candidates computer training, online assessments, certification and the opportunity
to be tested and certified in over 50 skill sets.



Staf*Tek
was founded on the premise that there is an increasing demand for high quality outsourced professional services. Staf*Tek’s
business premise combines client service orientation and commitment to quality. Staf*Tek is positioned to take advantage of what
we believe are two converging trends in the outsourced professional services industry — increasing demand for outsourced
professional services by corporate clients and increasing the supply of professionals interested in working on an outsourced basis.
Staf*Tek believes that its business premise allows it to offer challenging yet flexible career opportunities, attract highly qualified,
experienced professionals and, in turn, attract clients with varying professional needs.



Staf*Tek
is primarily a regional professional service firm that provides experienced and highly qualified personnel who can demonstrate
diversity, and flexibility in the work force. Staf*Tek has determined that its market is primarily in the Tulsa, Oklahoma area.



Proposed
Reverse Acquisition of Zone USA, Inc.



On
August 7, 2012, St. Joseph entered into a nonbinding Letter of Intent with Karavos Holdings Limited, a subsidiary of e-Kong Group,
Ltd, which is a Bermuda company, headquartered in Hong Kong and traded on the Hong Kong Stock Exchange. The Letter of Intent provides
for St. Joseph to acquire 100% of Zone USA, Inc., which has a 50% ownership position in ANZ Communications, LLC.



The
Letter of Intent contemplates the transaction being structured as a reverse acquisition with St. Joseph purchasing Zone USA’s
50% ownership position in ANZ Communications in return for the issuance to Karavos Holdings Limited of (i) such number of shares
of common stock that will be equal to not less than 80% of the total issued and outstanding shares of St. Joseph on a fully diluted
and converted basis, or (ii) preferred stock convertible into such number of common stock. In addition, the Letter of Intent contemplates
that the execution of a definitive agreement for the RTO is conditional on the involved parties being satisfied with their initial
due diligence reviews, and the raising by St. Joseph of not less than $14 million in net proceeds. It is also contemplated that
the definitive agreement will contain customary representations, warranties, covenants, undertakings and indemnities, including
by the Company’s principal shareholders, together with non-competition agreements required by the Zone USA Investor (or
its affiliates) relating to the existing Company’s business and restraints on the disposal by the Company’s principal
shareholders’ shares in the Company post-closing for an agreed period.



14







The
proposed transaction may be subject to the approval of our shareholders and the approval of Karavos Holdings Limited owners. The
approvals necessary will depend on the transaction structure contained in any definitive agreement that may be entered into. We
cannot provide any assurance that the required approvals will be granted, and in the event they are not, we will not be able to
proceed with the transaction. Any consummation of the proposed transaction will need to be performed in compliance with applicable
securities laws and regulations, and may require the filing of comprehensive disclosure documents which may add to the expense
and time needed for the completion of the transaction. Depending on the final transaction structure we may need to register as
an Investment Company under the Investment Company Act of 1940 or obtain an exemption from such registration. In such event, we
may have to abandon the transaction of we not able to register as an Investment Company or not able to obtain an exemption. Our
management cautions investors against making investment decisions based on any expectation that the proposed transaction will
be consummated, or that the proposed transaction will result in any increase in share value, because, in its view, such expectations
are speculative.



The
Letter of Intent contemplates that if the parties proceed with the transaction, on its consummation, St Joseph’s board of
directors and executive officers will be replaced by nominees to be named by the existing equity holders of Zone USA.



Results
of Operations for the Years Ending December 31, 2013 and December 31, 2012



|                                                    |  |                       |          |   | Change                |  |         | Change | 
|--------------------------------------------------- |  | --------------------- | -------- | - | --------------------- |  | ------- | ------ | 
|                                                    |  | December
    31, 2013 |          |   | December
    31, 2012 |  |         | $      | 
|                                                    |  |                       |          |   |                       |  |         |        | 
|Net
    Revenues                                    |  | $                     | 215,589  |   |                       |  | 100.0   | %      | 
|Cost
    of Revenues                                |  |                       | 151,024  |   |                       |  | 70.05   | %      | 
|Gross
    Margin (loss)                             |  |                       | 64,565   |   |                       |  | 29.95   | %      | 
|                                                    |  |                       |          |   |                       |  |         |        | 
|Operating
    Expenses:                             |  |                       |          |   |                       |  |         |        | 
|Selling,
    General andAdministrative
    Expenses |  |                       | 681,304  |   |                       |  | 316.02  | %      | 
|Depreciation
    and Amortization                   |  |                       | -        |   |                       |  | 0.00    | %      | 
|Total
    Operating Expenses                        |  |                       | 681,304  |   |                       |  | 316.02  | %      | 
|Income
    (Loss) from Operations                   |  |                       | (616,739 | ) |                       |  | -286.07 | %      | 
|                                                    |  |                       |          |   |                       |  |         |        | 
|OTHER
    INCOME AND (EXPENSE):                     |  |                       |          |   |                       |  |         |        | 
|Other
    Income (expense)                          |  |                       | -        |   |                       |  | 0.00    | %      | 
|Interest
    Expense                                |  |                       | (66,900  | ) |                       |  | -31.03  | %      | 
|Net
    Other Expense                               |  |                       | (66,900  | ) |                       |  | -31.03  | %      | 
|Loss
    before provision for income taxes          |  |                       | (683,639 | ) |                       |  | -317.10 | %      | 
|Provision
    for Income Taxes                      |  |                       | -        |   |                       |  | 0.00    | %      | 
|Net
    Income (Loss)                               |  |                       | (683,639 | ) |                       |  | -317.10 | %      | 
|Benefit
    from tax loss carryforward              |  |                       | -        |   |                       |  | 0.00    | %      | 
|Net
    Income (Loss)                               |  | $                     | (683,639 | ) |                       |  | -317.10 | %      | 



Revenues



Net
Revenues for the twelve months ended December 31, 2013 decreased to $215,589 from $427,376 for the twelve months ended December
31, 2012. The decrease in net revenues of 211,787 or approximately 50%, below the 2012 period is due primarily to decreased revenues
generated by the loss of contracted employees working for us and a decrease in hiring due to economic conditions since the prior
period. If the Company continues to show a decrease in revenues it may force the Company out of business.



15







Cost
of Revenues



Cost
of Revenues for the twelve months ended December 31, 2013 decreased to $151,024 from $289,236 for the twelve months ended December
31, 2012. The overall decrease in cost of revenues of $138,212, or approximately 48%, below the 2012 period is directly attributable
to the cost associated with the decrease in number of newly contracted employees described above.



Gross
Profit



The
overall gross margin for the twelve months ended December 31, 2013 increased to $64,565 from $138,140 for the twelve months ended
December 31, 2012. The overall increase in gross margin of $73,575 or approximately 53% over the 2012 period is directly attributable
to reduced costs in hiring and retaining our newly contracted employees.



Operating
Expenses



Total
operating expenses for the twelve months ended December 31, 2013 increased to $681,304 from $628,799 for the twelve months ended
December 31, 2012. Reasons for the overall increase in operating expenses of $52,505 or approximately 8%, above the 2012 period
is covered below in our discussions of General and Administrative Expenses and Stock-Based Compensation.



Stock-based
Compensation – Grants and Modification of Stock Options



On
August 10, 2011 the Company’s board of directors extended the deadline from August 24, 2011 to August 24, 2012 for the exercise
of the 460,000 options set at $1.05 per share, previously granted to officers, directors and key personnel. The extension was
considered a modification of the original stock options. Accordingly, the Company re-valued the stock options, which resulted
in a charge to stock-based compensation totaling $156,067.



The
Company further extended the deadline to December 31, 2012 in a board of directors meeting on August 23, 2012; and again extended
the deadline to June 30, 2013 in a board meeting on December 12, 2012. The extensions were considered a modification of the original
stock options. Accordingly, the Company revalued the stock options, which resulted in charges to share-based compensation totaling
$214,563 for the year ended December 31, 2012.



On
May 2, 2013 the Company’s board of directors extended the deadline for the exercise of the 452,500 options by six months
from June 30, 2013 to December 31, 2013. The Company further extended the deadline to June 30, 2014 in a board meeting on December
21, 2013. The extensions are considered a modification of the original stock options. Accordingly, the Company revalued the stock
options, which resulted in charges to share-based compensation totaling $193,997 for the year ended December 31, 2013.



On
November 13, 2013, the Company granted options to one employee to purchase 50,000 shares of the Company’s common stock at
an exercise price of $1.05 per share. The options vested on the date of grant. The quoted market price of the Company’s
common stock was $0.70 per share on the grant date. The weighted average exercise price and weighted average fair value of these
options on the date of grant were $1.05 per share. Stock option compensation totaling $16,719 was recognized during the quarter
ended December 31, 2013.



Income
(Loss) from Operations



Total
operating losses for the twelve months ended December 31, 2013 increased to $616,739 from operating losses of $490,659 for the
twelve months ended December 31, 2012. The overall increase in operating losses of $126,080 or approximately 26% above the 2012
period is primarily due to the increase in the charges for modification of stock options.



Other
Income (Expense)



Net
other expenses for the twelve months ended December 31, 2013 increased to $66,900 from $28,494 for the twelve months ended December
31, 2012. The overall increase in our other expenses of $38,406, or approximately 135% over the 2012 period is primarily due to
an increase in interest expense.



16







Net
Income (Loss)



Net
loss for the twelve months ended December 31, 2013 increased to $683,639 from $519,153 for the twelve months ended December 31,
2012. This increase in net loss of $164,486 or approximately 32% above the 2012 period is due primarily to the increase in charges
resulting from the modifications of stock options.



Liquidity
and Capital Resources



|                                              |  | December
    31, 2013 |          |   | December
    31, 2012 |  
|--------------------------------------------- |  | --------------------- | -------- | - | --------------------- | -
|Net
    cash used in operating activities     |  | $                     | (372,593 | ) |                       | $
|Net
    cash provided by investing activities |  | $                     | -        |   |                       | $
|Net
    cash provided by financing activities |  | $                     | 366,505  |   |                       | $



For
the year ended December 31, 2013, we had a cash balance of $527.



Cash
Used in Operating Activities



Net
cash used in our operating activities of $372,593 for the twelve months ended December 31, 2013 was primarily attributable to
the net loss and offset by depreciation and stock-based compensation expenses, decreases in accounts receivable, and increases
in accounts payable and accrued liabilities.



Cash
Used in Investing Activities



Net
cash used in our investing activities of $0 for the twelve months ended December 31, 2013.



Cash
Provided by Financing Activities



Net
cash provided by our financing activities of $366,505 for the twelve months ended December 31, 2013 primarily from proceeds of
common stock sales and related party loans.



Internal
Sources of Liquidity



For
the year ended December 31, 2013, the funds generated from our operations were insufficient to fund our daily operations. For
the year ended December 31, 2013, we had a gross margin of $64,565, and we were thus unable to meet our operating expenses of
$681,304 for the same period. After accounting for our net other expenses (interest expense) of $66,900 for this period, we suffered
a net loss of $683,639 for the period. We can provide no assurance that funds from our operations will increase sufficiently to
meet the requirements of our daily operations in the future. In the event that funds from our operations are insufficient to meet
our expenses, we will need to seek other sources of financing to maintain liquidity.



External
Sources of Liquidity



Because
the funds generated from our operations have been not been sufficient to fully fund our operations, we have been on dependent
on debt and equity financing to make up the shortfall. We actively pursue all potential financing options as we look to secure
additional funds to both stabilize and grow our business operations. Our management will review any financing options at their
disposal, and will judge each potential source of funds on their individual merits. There can be no assurance that we will be
able to secure additional funds from debt or equity financing, as and when we need to, or if we can, that the terms of such financing
will be favorable to us or our existing stockholders. As a result, our independent registered public accounting firm has issued
a “going concern” modification to its report on our audited financial statements for the years ended December 31,
2013 and 2012.



The
Company originally had a $200,000 line of credit of with a bank. In August 2010, the Company converted its line of credit with
the bank to a bank loan which is collateralized by all of assets of the Company’s subsidiary company, Staf*Tek, including
all receivables and property and equipment. The bank loan agreement included the following provisions: 1) an agreement to provide
insurance coverage for the collateralized assets in the amount of $180,000; 2) covenants to provide certain financial documents
to the bank on a monthly and annual basis. The interest rate on the loan was 6.5 % and the monthly principal and interest payment
was $2,698 with a final balloon payment in the amount of $117,937 due on the maturity date of August 31, 2013. On September 9,
2013, the Company received a default letter from the bank and since that time the bank requested information for consideration
for an extension which terms have yet to be determined. The principal loan balance continues to bear 6.5% interest.



17







During
the year ended December 31, 2013, we had a private offering(s) in which we sold 410,000 shares of common stock to accredited investors
at a price of $0.50 per share for gross proceeds of $205,000.



We
also borrowed $10,300 from related parties and $140,000 from third parties during the year ended December 31, 2013.



Preferred
A Stock Dividends



Our
Series A Shares have a stated value of $3.00 per share. Each holder of Series A Shares is entitled to receive a dividend equal
6.75% of the stated value of the Series A Shares payable on each anniversary of the date of issuance of such shares. The Company
is currently delinquent in making dividend payments pursuant to the terms of a settlement agreement, as disclosed in an 8-K released
on May 9, 2009. The accrued balance due on Series A Convertible Preferred Stock dividends total $42,047 and $42,047 as of December
31, 2013 and 2012, respectively. The Company will commence dividend payments pursuant to the terms of a settlement agreement as
funds are available. The preferred A stock may be converted to the Company’s common stock at the rate of one share of e
preferred A stock for one share of common stock at any time by the shareholder. The convertible preferred A stock can be called
for redemption by the Company no sooner than two (2) years after the date of issuance, and only if the Company’s common
stock is trading on a recognized United States stock exchange for a period of no less than thirty consecutive trading days at
a market value of $5.00 or more per share. However, as of this date, the stock has not traded at that amount. In September 2009,
the three largest holders of the Series A shares converted 380,500 shares of Series A shares to common stock on a one-to-one basis.
Following this conversion, only 5,708 shares of Series A stock remain outstanding.



Critical
Accounting Policies



The
discussion and analysis of our financial condition and results of operations are based on our financial statements, which have
been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation
of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates,
including those related to bad debts, inventory obsolescence, intangible assets, payroll tax obligations, and litigation. We base
our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. Actual results
may differ from these estimates under different assumptions or conditions.



We
have identified below the accounting policies, revenue recognition and software costs, related to what we believe are most critical
to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan
of Operation where such policies affect our reported and expected financial results.



Off
Balance Sheet Arrangements



During
the year ended December 31, 2013, we did not engage in any material off-balance sheet activities or have any relationships or
arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other
contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we
have any commitment or intent to provide additional funding to any such entities.



Item
7A. Quantitative and Qualitative Disclosures about Market Risk



We
do not hold any derivative instruments and do not engage in any hedging activities.



18







Item
8. Financial Statements



Our
financial statements are contained in pages F-2 through F-14 which appear at the end of this Annual Report.



Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



None.



Item
9A. Controls and Procedures



(a)
Evaluation of Disclosure and Control Procedures



The
Company’s Chief Executive Officer and the Company’s Chief Financial Officer evaluated the effectiveness of the Company’s
disclosure controls and procedures as of December 31, 2013 and had concluded that the Company’s disclosure controls and
procedures are effective. There have been no changes in our internal control over financial reporting during the year ended December
31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The term disclosure controls and proceduresmeans controls and other procedures that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated
and communicated to the Company’s management, including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.



(b)
Management’s Report on Internal Control over Financial Reporting



The
Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial
reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements in accordance with Generally Accepted Accounting Principles (“GAAP”).



Because
of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance of such
reliability and may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods
is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.



Management
has conducted, with the participation of our Chief Executive Officer and our Principal Accounting Officer, an assessment of the
effectiveness of our internal control over financial reporting as of December 31, 2013. Management’s assessment of internal
control over financial reporting used the criteria set forth in SEC Release 33-8810 based on the framework established by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control over Financial Reporting
– Guidance for Smaller Public Companies. Based on this evaluation, Management concluded that our system of internal
control over financial reporting was effective as of December 31, 2013, based on these criteria.



(c)
Changes in Internal Control over Financial Reporting



There
were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.



Item
9B. Other Information



None.



19







PART
III



Item
10. Directors, Executive Officers, and Corporate Governance



The
following table and biographical summaries set forth information, including principal occupation and business experience, about
our directors and executive officers:



|Name                  |  | Age |  | Position                                            |  | Officer
    and/or
Director Since
|--------------------- |  | --- |  | --------------------------------------------------- |  | ---------------------------------
|                      |  |     |  |                                                     |  |                                  
|Gerald
    McIlhargey |  | 66  |  | President,
    Chief Executive Officer and Director |  | March 2004                       
|                      |  |     |  |                                                     |  |                                  
|Kenneth
    Johnson   |  | 54  |  | Secretary,
    Treasurer and Director               |  | April 2000                       
|                      |  |     |  |                                                     |  |                                  
|Bruce
    Schreiner   |  | 59  |  | Director                                            |  | October
    2003                 
|                      |  |     |  |                                                     |  |                                  
|Donal
    Ford        |  | 58  |  | Director                                            |  | August
    2006                  
|                      |  |     |  |                                                     |  |                                  
|Maureen
    O’Brien   |  | 65  |  | Director                                            |  | August
    2006                  
|                      |  |     |  |                                                     |  |                                  
|John
    Blackmon     |  | 57  |  | President
    of Staf*Tek Services, Inc.            |  | June
    2004                    



Gerald
McIlhargey – President, Chief Executive Officer and Director



Mr.
McIlhargey has served as President and CEO of St. Joseph, Inc. since August 2006 and as a member of the Board since 2004. For
nearly three decades, he has served in senior executive roles with both public and private companies, including International
Corona Resources, Collingwood Energy, Sense Technologies and Maple Leaf Petroleum. Mr. McIlhargey received a Bachelor of Education
degree from Simon Fraser University in British Columbia, Canada in 1972.



Kenneth
Johnson – Secretary, Treasurer and Director



Mr.
Johnson has been a Director and Secretary and Treasurer of the Company since April of 2000. He has served as the Secretary, Treasurer
and Director of Staf*Tek from December of 2003 to the present. For the past nine years, Mr. Johnson has been employed as a senior
support representative with College Bookstore Management Systems (CMBS), a division of Nebraska Book Co., Inc. A provider of point
of sale and inventory control computer software for the college bookstore industry. he is involved in product development, customer
support and training. Mr. Johnson graduated from Hastings College in 1985, earning a Bachelor of Arts Degree in Business Administration.



Bruce
E. Schreiner, CPA – Director



Mr.
Schreiner, CPA, has been a Director of the Company since October of 2003. He has also served as a Director of Staf*Tek Services,
Inc. since October, 2003 to the present. Mr. Schreiner is a partner in the accounting firm of Schroeder & Schreiner, P.C.
He served as an Agent with the Internal Revenue Service for over five years, culminating in an appointment to the Technical and
Review Staff of Omaha, Nebraska, for the Nebraska District. Mr. Schreiner is a member of the American Institute and Nebraska Society
of Certified Public Accountants and the Grand Island Area Chamber of Commerce. He is currently on the Board of Directors of Sense
Technologies, Inc., a public company. Mr. Schreiner graduated magna cum laude from Hastings College in 1975, earning a Bachelor
of Arts Degree in both Economics and Business Administration with emphasis in Accounting.



Donal
Kent Ford – Director



Mr.
Ford has been a Director of the Company since August 24, 2006. For the past ten years, he has been President of Pinnacle Financial
Services, Inc., a Third Party Administrator for Pension and Profit Sharing Plans located in Lantana, Florida. Mr. Ford is a credentialed
member of the American Society of Pension Actuaries and is actively involved in the South Florida Benefits Council. Mr. Ford has
a Bachelor of Science in Business Administration from the University of Florida and a Doctor of Chiropractic from Life University.
He is also a Certified Pension Consultant with the American Society of Pension Professionals and Actuaries.



Maureen
O’Brien – Director



Ms.
O’Brien has been a Director of the Company since August 24, 2006. For the past seven years Ms. O’Brien has worked
as Executive Assistant to David Core, CEO of Pinnacle Financial Services, Inc. For seven years prior to that Ms. O’Brien
specialized in startup ventures with Real Applications, Inc. which included integrating an acquired programming services company.



20







John
Blackmon – President, Staf*Tek Services, Inc.



Mr.
Blackmon has been Staf*Tek’s President since August 24, 2006. Recently, he has expanded staffing services to include senior
and entry-level finance and accounting services. Before joining Staf*Tek, Mr. Blackmon was a Senior Manager of IT with MCI/WorldCom.
He joined MCI/WorldCom, now Verizon, in 1997 in the operations organization and was quickly moved to the IT organization where
his responsibilities included operations management, management of both technical and support organizations, and progressing to
lead the development and implementation of all E*Commerce application solutions for the Wholesale division of WorldCom.



Board
of Directors’ Term of Office



Directors
are elected at our annual meeting of shareholders and serve for one year until the next annual meeting of shareholders or until
their successors are elected and qualified.



Family
Relationships



There
are no family relationships among the officers and directors, nor are there any arrangements or understanding between any of the
Directors or Officers of our Company or any other person pursuant to which any Officer or Director was or is to be selected as
an officer or director.



Involvement
in Certain Legal Proceedings



During
the last ten years, none of our Directors, persons nominated to become Directors, or executive officer were subject to any of
the following events material to an evaluation of the ability or integrity of any such person:



| | ● | A
    petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent
    or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was
    a general partner at or within two years before the time of such filing, or any corporation or business association of which
    he was an executive officer at or within two years before the time of such filing;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Such
    person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations
    and other minor offenses);                                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ● | Such
    person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of
    competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:                                                                                                                                                                                                                          



| | ● | Acting
    as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
    transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any
    of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
    or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
    any conduct or practice in connection with such activity;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ● | Engaging
    in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ● | Engaging
    in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
    Federal or State securities laws or Federal commodities laws;                                                                                                                                                                                                                                                                                                                                                                                                      



21







| | ● | Such
    person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or
    State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any
    activity described in paragraph (f)(3)(i) Item 401 of Regulation S-K, or to be associated with persons engaged in any such
    activity;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Such
    person was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission (the
    “Commission”) to have violated any Federal or State securities law, and the judgment in such civil action or finding
    by the Commission has not been subsequently reversed, suspended, or vacated;                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Such
    person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to
    have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading
    Commission has not been subsequently reversed, suspended or vacated;                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Such
    person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding,
    not subsequently reversed, suspended or vacated, relating to an alleged violation of:                                                                                                                                                                              





| | ● | Any
    Federal or State securities or commodities law or regulation; or                                                                                                                                                                                                                                      
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                               
| | ● | Any
    law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent
    injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or
    removal or prohibition order; or
| |   |                                                                                                                                                                                                                                                                                                               
| | ● | Any
    law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or                                                                                                                                                                                                  



| | ● | Such
    person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
    organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined
    in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or
    organization that has disciplinary authority over its members or persons associated with a member.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Committees
of the Board of Directors; Meetings



During
the year ended December 31, 2013, the Board met six times, and no director attended fewer than 17% of the aggregate number of
meetings of the Board and committees on which such director served.



The
Board has two standing committees, the Audit Committee and the Compensation Committee. The Board does not have a separate Nominating
Committee and performs all of the functions of that committee.



Audit
Committee



The
Audit Committee has as its primary responsibilities the appointment of the independent auditor for the Company, the pre-approval
of all audit and non-audit services, and assistance to the Board in monitoring the integrity of our financial statements, the
independent auditor’s qualifications, independence and performance and our compliance with legal requirements. The Audit
Committee has adopted a written charter,which was mailed to its shareholders in 2006. During the year ended December 31,
2013, the Audit Committee met three time(s). Bruce Schreiner, Donal Ford, and Maureen O’Brien are the current members of
the Audit Committee.



Since
we are not a “listed” company, we are not subject to rules requiring the members of our Audit Committee to be
independent; however we use the rules of The NASDAQ Stock Market in determining whether directors are independent for
disclosure purposes. Based on its review of the applicable rules of The NASDAQ Stock Market governing audit committee
membership, the Board believes that all members of the Audit Committee are “independent” within the meaning of
such rules. The Securities and Exchange Commission (“SEC”) requires a company to disclose whether it has an
“Audit Committee Financial Expert” serving on its audit committee. Based on its review of the criteria of an
Audit Committee Financial Expert under the rule adopted by the SEC, the Board believes that one member of the Audit
Committee, Mr. Schreiner, qualifies as an Audit Committee Financial Expert. Each of the other current members have made
significant contributions and provided valuable service to St. Joseph and its stockholders as members of the Audit Committee
and the Board believes that each of them has demonstrated that he is capable of (i) understanding generally accepted
accounting principles (“GAAP”) and financial statements, (ii) assessing the general application of GAAP
principles in connection with the accounting for estimates, accruals and reserves, (iii) analyzing and evaluating our
financial statements, (iv) understanding internal controls and procedures for financial reporting, and (v) understanding
audit committee functions, all of which are attributes of an Audit Committee Financial Expert under the rule adopted by the
SEC. Given the business experience and acumen of these individuals and their service as members of the Audit Committee, the
Board believes that each of them is qualified to carry out all duties and responsibilities of the Audit Committee.



22







AUDIT
COMMITTEE REPORT



The
following is the Audit Committee’s report submitted to the Board of Directors for the fiscal year ended December 31, 2013.
The Audit Committee has:



|● | reviewed
    and discussed the Company’s audited financial statements with BF Borgers CPA PC, the Company’s independent registered
    accounting firm;                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                 
|● | discussed
    with BF Borgers CPA PC the matters required to be discussed by Statement on Auditing Standards No. 114, as may be modified
    or supplemented; and                                                                                               
|  |                                                                                                                                                                                                                                                                 
|● | received
    from BF Borgers CPA PC, the written disclosures and the letter regarding their independence as required by Independence Standards
    Board Standard No. 1, as may be modified or supplemented, and discussed the auditors’ independence with them.



Based
on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial
statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, for filing
with the Securities and Exchange Commission.





|AUDIT COMMITTEE
|---------------
|Bruce Schreiner





The
Audit Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this
Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934,
as amended, and shall not otherwise be deemed filed under these acts.



Compensation
Committee



The
Compensation Committee recommends to the Board annual salaries for senior management and reviews all company benefit plans. During
the year ended December 31, 2013, the Compensation Committee met three times and reviewed the compensation of all St. Joseph employees.
The current members of the Compensation Committee are Bruce Schreiner, Kenneth Johnson and Donal Ford.



Compliance
with Section 16(A) of the Exchange Act



Section
16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more
of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in
beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and
regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).



Based
solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the
fiscal year ended December 31, 2013, were timely.



Code
of Ethics



The
Company has adopted a Code of Ethics for adherence by its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer
and Controller to ensure honest and ethical conduct; full, fair and proper disclosure of financial information in the Company’s
periodic reports filed pursuant to the Securities Exchange Act of 1934; and compliance with applicable laws, rules, and regulations.
Any person may obtain a copy of our Code of Ethics by mailing a request to the Company at the address appearing on the front page
of this Annual Report on Form 10-K or by viewing it on our website found at www.stjosephinc.com.



23







Item
11. Executive Compensation



The
following table sets forth compensation information for services rendered by certain of our executive officers in all capacities
during the last two completed fiscal years. The following information includes the dollar value of base salaries and certain other
compensation, if any, whether paid or deferred. The executive officers of the company did not receive any stock award, option
award, non-equity incentive plan compensation, or nonqualified deferred compensation earnings during the last two completed years.



Summary
Compensation Table



|Name
    and Position(s)               |  | Year |  | Salary($) |        | Bonus |  | Stock
    Awards |  | Option
    Awards1 |  | Total
    Compensation
|-------------------------------------- |  | ---- |  | --------- | ------ | ----- |  | ---------------- |  | ------------------ |  | ----------------------
|Gerald
    McIlhargey                  |  | 2013 |  |           |        |       |  |                  |  |                    |  |                       
|President,
    CEO and Director        |  | 2012 |  |           |        |       |  |                  |  |                    |  |                       
|                                       |  |      |  |           |        |       |  |                  |  |                    |  |                       
|Kenneth
    L. Johnson                 |  | 2013 |  |           |        |       |  |                  |  |                    |  |                       
|Secretary,
    Treasurer and Director  |  | 2012 |  |           |        |       |  |                  |  |                    |  |                       
|                                       |  |      |  |           |        |       |  |                  |  |                    |  |                       
|John
    Blackmon                      |  | 2013 |  | $         | 77,000 |       |  |                  |  |                    |  |                       
|President,
    Staf*Tek Services, Inc. |  | 2012 |  | $         | 77,000 |       |  |                  |  |                    |  |                       



Compensation
Summary



Gerald
McIlhargey – Mr. McIlhargey was appointed President and Chief Executive Officer of our Company on May 17, 2006. Mr.
McIlhargey has served as a Director of our Company since March of 2004. We do not have an employment agreement with Mr. McIlhargey
and he is not receiving any compensation for serving as our Acting President. On August 24, 2006, he received options to purchase
100,000 shares of our common stock for agreeing to serve as a Director on our Board. The options have an exercise price of $1.05
per share and expire on June 30, 2014.



Kenneth
L. Johnson –We do not have an employment agreement with Mr. Johnson and he is not receiving any compensation for serving
as our Secretary and Treasurer. On August 24, 2006, he received options to purchase 50,000 shares of our common stock for agreeing
to serve as a Director on our Board. In December 2009 Mr. Johnson exercised 25,000 options. His remaining 25,000 options have
an exercise price of $1.05 per share and expire on June 30, 2014.



John
Blackmon – Mr. Blackmon is the President of our wholly-owned subsidiary, Staf*Tek Services, Inc. We do not have an employment
agreement with Mr. Blackmon. He receives an annual salary of $77,000 as compensation for serving as Staf*Tek Services, Inc.’s
President. On August 24, 2006, he received options to purchase 50,000 shares of our common stock for agreeing to serve as President
of Staf*Tek Services, Inc. The options have an exercise price of $1.05 per share and expire on June 30, 2014.



Outstanding
Equity Awards at Fiscal Year end



The
Company granted 50,000 share of our common stock options with an exercise price of $1.05 per share during the most recent completed
fiscal year.



Compensation
of Directors



The
directors receive no annual compensation other than the options they received for serving on the board of directors of St. Joseph;
however, they are reimbursed for out-of-pocket expenses incurred in connection with the Company’s business. On August 24,
2006, each of the directors listed below received fully vested options to purchase up to 50,000 shares of our common stock for

agreeing
to serve as our Directors. The options have an exercise price of $1.05 and expired on June 30, 2014. 502,500 of these options
remained outstanding and unexercised as of December 31, 2013.



As
shown by the following table, none of our directors who are not executive officers received any compensation during our fiscal
year ended December 31, 2013:



24







The
following schedule summarizes the changes in the Company’s equity awards for the year ended December 31, 2013.



|                                                 |  |             |         |  |           |   |      | Weighted  |  |   | Weighted    |  |  |           |          
|------------------------------------------------ |  | ----------- | ------- |  | --------- | - | ---- | --------- |  | - | ----------- |  |  | --------- | ---------
|                                                 |  | Awards      |         |  |           |   |      | Average   |  |   | Average     |  |  |           |          
|                                                 |  | Outstanding |         |  | Exercise  |   |      | Exercise  |  |   | Remaining   |  |  | Aggregate |          
|                                                 |  | and         |         |  | Price     |   |      | Price     |  |   | Contractual |  |  | Intrinsic |          
|                                                 |  | Exercisable |         |  | Per Share |   |      | Per Share |  |   | Life        |  |  | Value     |          
|Outstanding at January 1, 2013                   |  |             | 452,500 |  |           | $ | 1.05 |           |  | $ | 1.05        |  |  |           | 1.50
yrs.
|Granted                                          |  |             | 50,000  |  |           | $ | 1.05 |           |  | $ | 1.05        |  |  |           |          
|Exercised                                        |  |             | -       |  |           | $ | -    |           |  | $ | -           |  |  |           |          
|Cancelled/Expired                                |  |             | -       |  |           | $ | -    |           |  | $ | -           |  |  |           |          
|Outstanding and exercisable at December 31, 2013 |  |             | 502,500 |  |           | $ | 1.05 |           |  | $ | 1.05        |  |  |           | 0.50
yrs.



Item
12. Security Ownership of Certain Beneficial Owners and Management



The
following table sets forth information as of March 31, 2014 based on information obtained from the persons named below, with respect
to the beneficial ownership of our common and preferred stock by (i) each person (including groups) known to us to be the beneficial
owner of more than five percent (5%) of our common stock, and (ii) each Director and Officer, and (iii) all Directors and Officers
of the Company, as a group. Except as otherwise indicated, all stockholders have sole voting and investment power with respect
to the shares listed as beneficially owned by them, subject to the rights of spouses under applicable community property laws.



|Name of Beneficial Owner (1)                                       |  | Number of Shares of Common Stock (2) |           |     | Percent Outstanding |  |       | Number of Shares of Series A Preferred Stock (2) |  |  | Percent Outstanding | 
|------------------------------------------------------------------ |  | ------------------------------------ | --------- | --- | ------------------- |  | ----- | ------------------------------------------------ |  |  | ------------------- | 
|Gerald McIlhargey, President, Chief Executive Officer and Director |  |                                      | 889,923   | (3) |                     |  | 6.55  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Kenneth L. Johnson, Secretary, Treasurer and Director              |  |                                      | 150,000   | (4) |                     |  | 1.17  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Bruce Schreiner, Director                                          |  |                                      | 100,000   | (3) |                     |  | 0.78  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Maureen O’Brien, Director                                          |  |                                      | 75,000    | (6) |                     |  | 0.59  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Donal Ford, Director                                               |  |                                      | 75,000    | (5) |                     |  | 0.59  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|John Blackmon, President, Staf*Tek Services, Inc.                  |  |                                      | 89,954    | (5) |                     |  | 0.70  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|All Executive Officers and Directors as a Group (Five Individuals) |  |                                      | 1,319,877 |     |                     |  | 10.38 | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Hong Kong Base, Ltd.                                               |  |                                      | 1,450,000 | (7) |                     |  | 11.82 | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Desert Projects, Inc.                                              |  |                                      | 824,967   | (8) |                     |  | 6.72  | %                                                |  |  | 0                   | 
|                                                                   |  |                                      |           |     |                     |  |       |                                                  |  |  |                     | 
|Camille Quinn                                                      |  |                                      | 8,994     | (9) |                     |  | 0.03  | %                                                |  |  | 5,708               | 



|(1) | The
    address for Messrs. McIlhargey, Johnson, Schreiner, Ford, and Ms. O’Brien is: c/o St. Joseph, Inc., 4870 S. Lewis, Suite
    250, Tulsa, Oklahoma 74105. The address for Hong Kong Base, Ltd. is Unit C, 26th Floor, CNT Tower, 338 Hennessey Road, Wanchai,
    Hong Kong, China. The address for Ms. Bell is Route 1 Box 650, Haskell, Oklahoma 74436. The address for Ms. Quinn is 5800
    E. Skelly Drive, Suite 1230, Tulsa, Oklahoma 7413. Except as indicated by footnote, and subject to applicable community property
    laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown
    as beneficially owned by them.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | Based
    upon 12,705,341 shares of common stock and 5,702 shares of Series A Preferred Stock issued and outstanding on March 31, 2014.
    Percentages are rounded to the nearest one hundredth of a percent. As required by Item 403 of Regulation S-B, calculated on
    the basis of the amount of outstanding securities plus, for each person or group, any securities that person or group has
    the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights. The percentage of
    the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.                                      



25







|(3) | Includes
    fully vested options to purchase 100,000 shares of our common stock at an exercise price of $1.05 per share.                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                        
|(4) | Includes
    fully vested options to purchase 25,000 shares of our common stock at an exercise price of $1.05 per share.                               
|    |                                                                                                                                                        
|(5) | Includes
    fully vested options to purchase 50,000 shares of our common stock at an exercise price of $1.05 per share.                               
|    |                                                                                                                                                        
|(6) | Includes
    fully vested options to purchase 42,500 shares of our common stock at an exercise price of $1.05 per share.                               
|    |                                                                                                                                                        
|(7) | Hong
    Kong Base Ltd is a corporation organized under the laws of Hong Kong and is beneficially owned by Yvonne Chun Siu Fun.                        
|    |                                                                                                                                                        
|(8) | Desert
    Projects, Inc. is a corporation organized under the laws of the State of Nevada and is beneficially owned by James Ralph Houston.           
|    |                                                                                                                                                        
|(9) | Includes
    5,708 shares of common stock, which would be issuable on conversion of the 5,702 shares of Series A Preferred Stock held by
    Ms. Quinn.



Equity
Compensation Plans



The
following table sets forth information as of December 31, 2013 with respect to compensation plans under which we are authorized
to issue shares of our common stock, aggregated as follows:



| | ● | All
    compensation plans previously approved by security holders; and
| | - | -----------------------------------------------------------------------
| |   |                                                                        
| | ● | All
    compensation plans not previously approved by security holders.



|                                                           |  | Equity Compensation Plan Information                                                            |        
|---------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- | -------
|Plan
    Category                                          |  | Number
    of securities to be issued upon exercise of outstanding options,
warrants and rights |        
|                                                           |  |                                                                                                 | (a)    
|Equity compensation plans approved by security holders     |  |                                                                                                 | 502,500
|                                                           |  |                                                                                                 |        
|Equity compensation plans not approved by security holders |  |                                                                                                 | 0      
|                                                           |  |                                                                                                 |        
|Total                                                      |  |                                                                                                 | 502,500



| | (1) | On
                                         August 24, 2006, we adopted our 2006 Stock Option Plan, which reserved 1,125,000 shares
                                         of our common stock for issuance pursuant to the plan. On August 24, 2006, our Board
                                         of Directors granted stock options to our officers, directors and employees pursuant
                                         to the plan to purchase 410,000 share of our common stock at an exercise price of $1.05
                                         per share and a term that ends on August 24, 2012. On December 1, 2010, and November
                                         13, 2013 there were 75,000 and 50,000 options granted respectively which expired on June
                                         30, 2014.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Description
of Securities



St.
Joseph, Inc. has 100,000,000 Common Stock authorized for issuance and 25,000,000 Preferred Stock authorized for issuance. As of
March 31, 2014, there are 12,705,341 shares of Common Stock issued and outstanding. There are 5,708 shares of Series A Preferred
Stock that are issued and outstanding; and zero shares of Series B Preferred Stock have been issued.



The
holders of the outstanding series of Preferred Stock have the following rights:



Voting
Rights.Holders of the Series A Preferred Stock have no voting rights.



Conversion
Rights.Holders of the Series A Preferred Stock may convert their shares at any time into an equal number of shares of our
Common Stock by delivering to the Corporation a completed and signed conversion notice. The Series A and Series B Preferred Stock
are convertible into Common Stock on a one-for-one basis but only shares of Series A stock are issued and outstanding as of the
date of this Memorandum.



27







Dividend
Rights. Our Series A Shares have a stated value of $3.00 per share. Each holder of Series A Shares is entitled to receive
a dividend equal 6.75% of the stated value of the Series A Shares payable on each anniversary of the date of issuance of such
shares. The accrued balance due on Series A Convertible Preferred Stock dividends total $42,047 and $42,047 as of December 31,
2013 and 2012, respectively. The Series A dividend payments schedule was determined from a settlement agreement, as disclosed
in a Form 8-K that was released on May 9, 2010.



Liquidation:In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of
the Series A and Series B Preferred Stock, shall be entitled to receive, prior and in preference to any distribution of any of
the assets or funds of the Company to the holders of Common Stock, an amount on such date equal to the stated value multiplied
by the shares of Series A Preferred Stock or Series B Stock (as the case may be) owned of record by such holder plus an amount
equal to any accrued and unpaid dividends as of such date, less the amount of any distributions previously made to the holder
in respect of such shares of Series A Preferred Stock or Series B Preferred Stock (as the case may be). A payment to a Holder
of Series A Preferred Stock or Series B Preferred Stock due to liquidation shall be made before any payment shall be made or any
assets distributed to the holders of any junior stock. If upon any liquidation, the amounts payable with respect to the Series
A Preferred Stock and Series B Preferred Stock are not paid in full, holders of the Series A and Series B Preferred Stock will
share ratably in any distribution of the assets of the Corporation in proportion to the respective amounts that would be payable
per share of Series A Preferred Stock and Series B Preferred Stock (as the case may be), if the assets of the Corporation were
sufficient for all such amounts to be paid in full. Neither the consolidation nor merger of the Corporation into or with any other
entity, nor the sale or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of
the Corporation, shall be deemed to be a liquidation. Any assets to be delivered to the holders of the Series A Preferred Stock
and/or to the Holders of Series B Preferred Stock pursuant to the foregoing as a consequence of a liquidation shall be valued
at their fair market value as determined in good faith by the Board of Directors of the Corporation, whose determination shall
be conclusive and binding absent manifest error. The Series A Preferred Stock shall rank pari passu with respect to liquidation
with Series B Preferred Stock.



Redemption
Provisions.The Series A Preferred Stock can be called for redemption by the Company no sooner than two (2) years after the
date of issuance, and only if the Company’s common stock is trading on a recognized United States stock exchange for a period
of no less than thirty consecutive trading days at a market value of $5.00 or more per share. However, as of the date of this
Memorandum, the stock has not traded at that amount. The Series B Preferred Stock, of which none are issued and outstanding as
of the date of this Memorandum, may be redeemed by the Corporation, in whole or in part, at any time and from time to time beginning
on the sixth (6th) month anniversary of the Issue Date for cash at a redemption price equal to the stated value plus the total
of all accrued but unpaid Dividends on such Series B Preferred Stock.



Additionally,
there are outstanding options for the purchase of 502,500 shares of Common Stock that are all fully vested. On August 24, 2006,
St. Joseph adopted its 2006 Stock Option Plan, which reserved 1,125,000 shares of the Company’s common stock for issuance
pursuant to the plan. On August 24, 2006, the Company’s Board of Directors granted stock options to our officers, directors
and employees pursuant to the plan to purchase 410,000 share of our common stock at an exercise price of $1.05 per share, which
were all deemed effective on August 24, 2006. 25,000 of these stock options were exercised. On December 1, 2010, a further 75,000
options were granted which expired on June 30, 2014.



Item
13. Certain Relationships and Related Transactions; DIRECTOR INDEPENDENCE



Other
than disclosed below, none of the directors or executive officers of the Company nor any person who beneficially owns, directly
or indirectly, shares carrying more than 10% of the voting rights attached to all outstanding shares of the Company, nor any promoter
of the Company, nor any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any
transaction since the beginning of the Company’s 2013 fiscal year or in any presently proposed transaction which, in either
case, has or will exceed one percent of the average of the Company’s total assets at year end for the last two completed
fiscal years. The Company has not entered into transactions with any member of the immediate families of the foregoing persons,
nor is any such transaction proposed.



Gerald
McIlhargey



COLEMC
Investments, LTD., a Canadian company owned by Gerry McIlhargey, President and Director of the Company, advanced the Company a
total of $45,000 for working capital in exchange for three promissory notes. The notes matured on December 31, 2011 and December
2010 and did not bear any interest. The notes have been extended until December 31, 2014.



During
the years ended December 31, 2013 and 2012, our officer advanced the Company $10,300 and $7,500, respectively, for working capital
in exchange for two promissory notes. The notes matured on December 31, 2013 and 2012, and did not bear any interest. The notes
have been extended until December 31, 2014.



28







Director
Independence



Although
we are not “listed” by any exchange with established criteria for determining director independence, we use the criteria
established by The NASDAQ Stock Market governing audit committee membership for making such determination for disclosure purposes.
Based on its review of the applicable rules of The NASDAQ Stock Market governing audit committee membership, the Board believes
that Bruce Schreiner, Donal Ford, and Maureen O’Brien would be deemed “independent” within the meaning of such
rules.



As
Bruce Schreiner, Donal Ford, and Maureen O’Brien are the only directors on our audit and compensation committees, such committees
have no directors who are not independent.



Because
we do not have a nominating committee, our entire Board acts in such capacity, including our two directors who are not independent,
Gerald McIlhargey and Kenneth L. Johnson.



Item
14. Principal Accountant Fees and Services



Our
financial statements for the fiscal years ended December 31, 2012 and December 31, 2011, along with the related statements of
operations, stockholders’ equity and cash flows have been audited by BF Borgers PC and Borgers & Cutler CPA’s
PLLC both CPA’s of Denver, Colorado, independent registered public accounting firms, to the extent and for the period set
forth in their report, and are set forth in reliance upon such report given upon the authority of them as experts in auditing
and accounting.



Audit
Fees



Our
independent auditor, BF Borgers CPA PC, billed an aggregate of $22,500 and $22,500 for the years ended December 31, 2013 and 2012
audits. Our independent auditor also billed an aggregate of $12,500 and $12,500 in connection with the reviews of the Company’s
unaudited quarterly financial statements for the years ended December 31, 2013 and 2012.



Audit
Fees and Audit Related Fees consist of fees billed for professional services rendered for auditing our Financial Statements, reviews
of interim Financial Statements included in quarterly reports, services performed in connection with other filings with the Securities
& Exchange Commission and related comfort letters and other services that are normally provided by our independent auditors
in connection with statutory and regulatory filings or engagements.



Tax
Fees





|2013 |      |  | 2012 |  
|---- | ---- |  | ---- | -
|$    | 0.00 |  |      | $



Tax
Fees consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include
assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions.



All
Other Fees





|2013 |      |  | 2012 |  
|---- | ---- |  | ---- | -
|$    | 0.00 |  |      | $



29







Item
15. Exhibits,FINANCIAL STATEMENT SCHEDULES.



|EXHIBIT
    NO. |  | DESCRIPTION
    OF DOCUMENT                                                                                                                                                  
|--------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                                              
|2.1
    (5)     |  | Agreement
    of Share Exchange and Purchase and Sale dated January 2, 2004 between St. Joseph, Inc. and Phyllis L. Bell, and Paul D. Aelmore
    and Staf-Tek Services, Inc.
|                |  |                                                                                                                                                                              
|3.1
    (1)     |  | Articles
    of Incorporation of Pottery Connection, Inc.                                                                                                                    
|                |  |                                                                                                                                                                              
|3.2
    (1)     |  | Articles
    of Amendment to Articles of Incorporation as filed with the Colorado Secretary of State on January 19, 2001.                                                    
|                |  |                                                                                                                                                                              
|3.3
    (5)     |  | Articles
    of Amendment to Articles of Incorporation as filed with the Colorado Secretary of State on November 6, 2003.                                                    
|                |  |                                                                                                                                                                              
|3.4
    (6)     |  | Articles
    of Amendment to Articles of Incorporation as filed with the Colorado Secretary of State on September 29, 2006.                                                  
|                |  |                                                                                                                                                                              
|3.5
    (7)     |  | Articles
    of Amendment to the Articles of Incorporation filed with the Colorado Secretary of State on May 18, 2007.                                                       
|                |  |                                                                                                                                                                              
|3.6
    (7)     |  | Articles
    of Amendment to the Articles of Incorporation filed with the Colorado Secretary of State on May 23, 2007.                                                       
|                |  |                                                                                                                                                                              
|3.5
    (3)     |  | Bylaws
    of St. Joseph, Inc. (formerly known as Pottery Connection, Inc.)                                                                                                  
|                |  |                                                                                                                                                                              
|4.1
    (1)     |  | Specimen
    form of St. Joseph’s stock certificate for shares of its common stock.                                                                                          
|                |  |                                                                                                                                                                              
|4.2
    (10)    |  | 2006
    Stock Option Plan.                                                                                                                                                  
|                |  |                                                                                                                                                                              
|10.1
    (3)    |  | Exclusive
    Agreement between St. Joseph Energy, Inc. and David Johnson.                                                                                                   
|                |  |                                                                                                                                                                              
|10.2
    (2)    |  | Form
    of User Agreement for St. Joseph, Inc.                                                                                                                              
|                |  |                                                                                                                                                                              
|10.3
    (9)    |  | Promissory
    Note dated June 16, 2005 for $96,000 issued by St. Joseph, Inc. to John H. Simmons.                                                                           
|                |  |                                                                                                                                                                              
|10.4
    (9)    |  | Promissory
    Note dated December 28, 2006 for $25,000 issued by Staf*Tek Services, Inc. to Gerry McIlhargey.                                                               
|                |  |                                                                                                                                                                              
|10.5
    (8)    |  | Form
    of Letter Agreement for conversion of Series B Stock to common stock on December 31, 2007.                                                                          
|                |  |                                                                                                                                                                              
|10.6
    (8)    |  | Form
    of Letter Agreement for conversion of promissory notes to common stock on December 31, 2007.                                                                        
|                |  |                                                                                                                                                                              
|14.1
    (9)    |  | Code
    of Ethics.                                                                                                                                                          
|                |  |                                                                                                                                                                              
|21.1
    (9)    |  | Subsidiaries
    of St. Joseph, Inc.                                                                                                                                         
|                |  |                                                                                                                                                                              
|31.1*           |  | Principal
    Executive Officer Certification under Section 302 of the Sarbanes-Oxley Act of 2002.                                                                           
|                |  |                                                                                                                                                                              
|31.2*           |  | Principal
    Financial Officer Certification under Section 302 of the Sarbanes-Oxley Act of 2002.                                                                           
|                |  |                                                                                                                                                                              
|32.1*           |  | Principal
    Executive Officer Certification under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                           
|                |  |                                                                                                                                                                              
|32.2*           |  | Principal
    Financial Officer Certification under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                           



|*    |  | Filed herewith                                                                                                                                                                             
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                            
|(1)  |  | Filed
    on July 23, 2002 as an exhibit to St. Joseph’s registration statement on Form 10SB and incorporated herein by reference.                                                         
|(2)  |  | Filed
    on April 15, 2003 as an exhibit to St. Joseph’s annual report on Form 10-KSB for the fiscal year ended December 31,
    2002 and incorporated herein by reference.               
|(3)  |  | Filed
    on June 3, 2003 as an exhibit to St. Joseph’s amendment to registration statement on Form 10SB12G/A and incorporated
    herein by reference.                                    
|(4)  |  | Filed
    on April 15, 2004 as an exhibit to St. Joseph’s annual report on Form 10-KSB for the fiscal year ended December 31,
    2003 and incorporated herein by reference.               
|(5)  |  | Filed
    on May 5, 2004 as an exhibit to St. Joseph’s report on Form 8-K dated April 30, 2004 and incorporated herein by reference.                                                       
|(6)  |  | Filed
    on November 20, 2006 as an exhibit to St. Joseph’s quarterly report on Form 10-QSB for the quarterly period ended September
    30, 2006 and incorporated herein by reference.   
|(7)  |  | Filed
    on May 23, 2007 as an exhibit to St. Joseph’s report on Form 8-K dated May 18, 2007 and incorporated herein by reference.                                                        
|(8)  |  | Filed
    on January 28, 2008 as an exhibit to St. Joseph’s report on Form 8-K dated December 31, 2007 and incorporated herein
    by reference.                                           
|(9)  |  | Filed
    on April 20, 2007 as an exhibit to St. Joseph’s amendment 1 to annual report on Form 10-KSB for the fiscal year ended
    December 31, 2006 and incorporated herein by reference.
|(10) |  | Filed
    on August 3, 2006 as an exhibit to St. Joseph’s proxy statement on Schedule and incorporated herein by reference.                                                                



30











SIGNATURES



In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|                          | ST.
    JOSEPH, INC.
|------------------------- | --------------------
|                          |                     
|Dated: March 31,
    2014 | By:                 
|                          |                     
|                          |                     



|Dated:
    March 31, 2014 | By: | /s/
    Kenneth L. Johnson 
|------------------------- | --- | ---------------------------
|                          |     | Kenneth L. Johnson         
|                          |     | Secretary and
    Treasurer



Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.



|Signature
    and Title                             |  | Date      | 
|--------------------------------------------------- |  | --------- | 
|                                                    |  |           | 
|/s/
    Gerald McIlhargey                           |  | 31-Mar-14 | 
|Gerald
    McIlhargey                               |  |           | 
|President,
    Chief Executive Officer and Director |  |           | 
|                                                    |  |           | 
|/s/
    Kenneth L. Johnson                          |  | 31-Mar-14 | 
|Kenneth
    L. Johnson                              |  |           | 
|Secretary,
    Treasurer and Director               |  |           | 
|                                                    |  |           | 
|/s/
    Bruce Schreiner                             |  | 31-Mar-14 | 
|Bruce
    Schreiner                                 |  |           | 
|Director                                            |  |           | 
|                                                    |  |           | 
|/s/
    Donal Ford                                  |  | 31-Mar-14 | 
|Donal
    Ford                                      |  |           | 
|Director                                            |  |           | 
|                                                    |  |           | 
|/s/
    Maureen O’Brien                             |  | 31-Mar-14 | 
|Maureen
    O’Brien                                 |  |           | 
|Director                                            |  |           | 





31







ST. JOSEPH, INC.

Index to Consolidated Financial Statements



|                                                                                                          |  | Page      
|--------------------------------------------------------------------------------------------------------- |  | ----------
|                                                                                                          |  |           
|Report of Independent Registered Public Accounting Firm                                                   |  | F-2       
|                                                                                                          |  |           
|Consolidated Balance Sheet at December 31, 2013 and 2012                                                  |  | F-3       
|                                                                                                          |  |           
|Consolidated Statements of Operations for the years ended December 31, 2013 and 2012                      |  | F-4       
|                                                                                                          |  |           
|Consolidated Statement of Changes in Stockholders’ Deficit for the years ended December 31, 2013 and 2012 |  | F-5       
|                                                                                                          |  |           
|Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012                      |  | F-6       
|                                                                                                          |  |           
|Notes to Consolidated Financial Statements                                                                |  | F-7 - F-14



F-1







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of St. Joseph, Inc.:



We have audited the accompanying balance sheets
of St. Joseph, Inc. (“the Company”) as of December 31, 2013 and 2012 and the related statements of operations, stockholders’
equity (deficit) and cash flows for the years then ended. 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 audit.



We conducted our audit in accordance with standards
of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit 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, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of St. Joseph, Inc., as of December 31, 2013 and 2012,
and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting
principles in the United States of America.



The company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the Company’s internal control over financial reporting. Accordingly, we express
no such opinion.



The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the
Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.



|/s/ B F Borgers CPA PC | 
|---------------------- | 
|B F Borgers CPA PC     | 
|Denver, CO             | 
|                       | 
|March 31, 2014         | 



F-2







ST.
JOSEPH, INC.

CONSOLIDATED
BALANCE SHEETS



|                                                                                                                                           |  | December 31, 2013 |            |   | December 31, 2012 |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ---------- | - | ----------------- | -
|ASSETS                                                                                                                                     |  |                   |            |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|CURRENT ASSETS:                                                                                                                            |  |                   |            |   |                   |  
|Cash                                                                                                                                       |  | $                 | 527        |   |                   | $
|Accounts receivable, net of allowance for doubtful accounts of $2,208 and $2,208, respectively                                             |  |                   | 1,092      |   |                   |  
|Prepaid Expenses                                                                                                                           |  |                   | 60,000     |   |                   |  
|Total current assets                                                                                                                       |  |                   | 61,619     |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|Property and equipment, net of accumulated depreciation of $154,202 and $153,053, respectively                                             |  |                   | -          |   |                   |  
|Deposits                                                                                                                                   |  |                   | 1,230      |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|Total Assets                                                                                                                               |  | $                 | 62,849     |   |                   | $
|                                                                                                                                           |  |                   |            |   |                   |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                      |  |                   |            |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|CURRENT LIABILITIES:                                                                                                                       |  |                   |            |   |                   |  
|Accounts payable                                                                                                                           |  | $                 | 404,700    |   |                   | $
|Accrued liabilities                                                                                                                        |  |                   | 167,121    |   |                   |  
|Accrued preferred dividend                                                                                                                 |  |                   | 42,047     |   |                   |  
|Notes payable:                                                                                                                             |  |                   |            |   |                   |  
|Bank loan, current maturities (Note 4)                                                                                                     |  |                   | 118,202    |   |                   |  
|Advance from officer (Note 2)                                                                                                              |  |                   | 29,700     |   |                   |  
|Loan from officer (Note 2)                                                                                                                 |  |                   | 49,800     |   |                   |  
|Notes payable, other (Note 4)                                                                                                              |  |                   | 140,000    |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|Total current liabilities                                                                                                                  |  |                   | 951,570    |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|STOCKHOLDERS’ DEFICIT (Note 7):                                                                                                            |  |                   |            |   |                   |  
|Stock subscription receivable                                                                                                              |  |                   | -          |   |                   |  
|Preferred stock, Series A, $0.001 par value. 25,000,000 shares authorized, 5,708 shares issued and outstanding                             |  |                   | 6          |   |                   |  
|Common stock, $0.001 par value; 100,000,000 shares authorized, 2013 – 12,219,802 and 2012 - 11,809,802 issued and outstanding respectively |  |                   | 12,220     |   |                   |  
|Additional paid-in capital                                                                                                                 |  |                   | 3,414,239  |   |                   |  
|Retained deficit                                                                                                                           |  |                   | (4,315,186 | ) |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|Total Stockholders’ Deficit                                                                                                                |  |                   | (888,721   | ) |                   |  
|                                                                                                                                           |  |                   |            |   |                   |  
|Total Liabilities and Stockholders’ Deficit                                                                                                |  | $                 | 62,849     |   |                   | $



The
accompanying footnotes are an integral part of these financial statements.



F-3







ST.
JOSEPH, INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS



|                                               |  | Year ended   |           
|---------------------------------------------- |  | ------------ | ----------
|                                               |  | December 31, |           
|                                               |  | 2013         |           
|                                               |  |              |           
|REVENUES:                                      |  | $            | 215,589   
|                                               |  |              |           
|COST OF REVENUES                               |  |              | 151,024   
|                                               |  |              |           
|Gross Margin                                   |  |              | 64,565    
|                                               |  |              |           
|COSTS AND EXPENSES:                            |  |              |           
|General and Administrative Expenses            |  |              | 681,304   
|Depreciation and Amortization                  |  |              | -         
|Total Costs and Expenses                       |  |              | 681,304   
|                                               |  |              |           
|Operating Income (Loss)                        |  |              | (616,739  
|                                               |  |              |           
|OTHER INCOME AND (EXPENSE):                    |  |              |           
|Other Income (expense)                         |  |              | -         
|Interest Expense                               |  |              | (66,900   
|                                               |  |              |           
|Net Other Expense                              |  |              | (66,900   
|                                               |  |              |           
|Loss before provision for income taxes         |  |              | (683,639  
|                                               |  |              |           
|PROVISION FOR INCOME TAXES:                    |  |              |           
|Provision for Federal income tax               |  |              | -         
|Provision for State income tax                 |  |              | -         
|                                               |  |              |           
|Total provision for income taxes               |  |              | -         
|                                               |  |              |           
|Loss before benefit from tax loss carryforward |  |              | (683,639  
|                                               |  |              |           
|Benefit from tax loss carryforward             |  |              | -         
|                                               |  |              |           
|Net Loss                                       |  | $            | (683,639  
|                                               |  |              |           
|Loss applicable to common stockholders         |  | $            | (683,639  
|                                               |  |              |           
|Basic and diluted loss per common share        |  | $            | (0.057    
|                                               |  |              |           
|Weighted average common shares outstanding     |  |              | 12,006,766



The
accompanying footnotes are an integral part of these financial statements.



F-4







ST.
JOSEPH, INC.

CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT



|                                                  |  | Preferred
    Stock-Series A |       |  | Common
    Stock   |   |   | Additional |  |  |               |  |  |                     |        |  |                      |  
|------------------------------------------------- |  | ---------------------------- | ----- |  | ------------------ | - | - | ---------- |  |  | ------------- |  |  | ------------------- | ------ |  | -------------------- | -
|                                                  |  | Shares                       |       |  | Par
    
    value |   |   | Shares     |  |  | Par
    value |  |  | Paid-in
    Capital |        |  | Retained
    Deficit |  
|Balance December
    31, 2011                     |  |                              | 5,708 |  |                    | $ | 6 |            |  |  | 11,172,302    |  |  |                     | 11,172 |  |                      |  
|                                                  |  |                              |       |  |                    |   |   |            |  |  |               |  |  |                     |        |  |                      |  
|Collection of stock subscription
    receivable   |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|Sale of common stock @ $0.50 per share            |  |                              | -     |  |                    |   | - |            |  |  | 190,000       |  |  |                     | 190    |  |                      |  
|Exercise of stock options @ $1.05 per share       |  |                              | -     |  |                    |   | - |            |  |  | 7,500         |  |  |                     | 8      |  |                      |  
|Modification of stock options                     |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|Net
    loss for the year ended December 31, 2012 |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|                                                  |  |                              |       |  |                    |   |   |            |  |  |               |  |  |                     |        |  |                      |  
|Balance December 31, 2012                         |  |                              | 5,708 |  |                    | $ | 6 |            |  |  | 11,809,802    |  |  | $                   | 11,810 |  |                      | $
|Collection of
    stock subscription receivable   |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|Sale of common stock @ $0.50 per share            |  |                              | -     |  |                    |   | - |            |  |  | 410,000       |  |  |                     | 410    |  |                      |  
|Issuance of stock options @ $1.05 per share       |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|Modification of stock options                     |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|Net
    loss for the year ended December 31, 2013 |  |                              | -     |  |                    |   | - |            |  |  | -             |  |  |                     | -      |  |                      |  
|                                                  |  |                              |       |  |                    |   |   |            |  |  |               |  |  |                     |        |  |                      |  
|Balance
    December 31, 2013                     |  |                              | 5,708 |  |                    | $ | 6 |            |  |  | 12,219,802    |  |  | $                   | 12,220 |  |                      | $



The
accompanying footnotes are an integral part of these financial statements.



F-5







ST.
JOSEPH, INC.

CONSOLIDATED
STATEMENTS OF CASH FLOW



|                                                               |  | Years Ended  |         
|-------------------------------------------------------------- |  | ------------ | --------
|                                                               |  | December 31, |         
|                                                               |  | 2013         |         
|OPERATING ACTIVITIES                                           |  |              |         
|                                                               |  |              |         
|Net income (loss)                                              |  | $            | (683,639
|Adjustments to reconcile net loss to net cash                  |  |              |         
|provided by (used in) operating activities:                    |  |              |         
|Depreciation and amortization                                  |  |              | -       
|Stock-based compensation                                       |  |              | 210,716 
|Changes in operating assets and liabilities:                   |  |              |         
|(Increase)/decrease in accounts receivable                     |  |              | 28,608  
|(Increase)/decrease in prepaid expenses                        |  |              | (60,000 
|Increase/(decrease) in accounts payable                        |  |              | 94,409  
|Increase/(decrease) in accrued liabilities                     |  |              | 37,313  
|                                                               |  |              |         
|Net cash provided by (used in) operating activities            |  |              | (372,593
|                                                               |  |              |         
|INVESTING ACTIVITIES                                           |  |              |         
|INVESTING ACTIVITIES                                           |  |              | -       
|                                                               |  |              |         
|                                                               |  |              | -       
|                                                               |  |              |         
|FINANCING ACTIVITIES                                           |  |              |         
|Repayment on bank loan                                         |  |              | (13,795 
|(Increase)/decrease of stock subscription receivable           |  |              | 25,000  
|Proceeds from related party                                    |  |              | 5,500   
|Proceeds from officer loan and notes payable                   |  |              | 144,800 
|Payments on preferred stock dividends                          |  |              | -       
|Proceeds from sale of common stock                             |  |              | 205,000 
|                                                               |  |              |         
|Net cash provided by (used in) financing activities            |  |              | 366,505 
|                                                               |  |              |         
|INCREASE (DECREASE) IN CASH                                    |  |              | (6,088  
|                                                               |  |              |         
|CASH AT BEGINNING OF PERIOD                                    |  |              | 6,615   
|                                                               |  |              |         
|CASH AT END OF PERIOD                                          |  | $            | 527     
|                                                               |  |              |         
|SUPPLEMENTAL NON-CASH INVESTING AND FINANCING
    INFORMATION: |  |              |         
|Conversion of bank line of credit into loan                    |  | $            | -       
|                                                               |  |              |         
|SUPPLEMENTAL INFORMATION:                                      |  |              |         
|Cash paid for taxes                                            |  | $            | -       
|Cash paid for interest                                         |  | $            | 66,900  



The
accompanying footnotes are an integral part of these financial statements.



F-6







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



Organization and Basis of Presentation



St. Joseph, Inc. (the “Company”)
was incorporated in Colorado on March 19, 1999 as Pottery Connection, Inc. On March 19, 2001, the Company changed its name to St.
Joseph Energy, Inc. and on November 6, 2003, the Company changed its name to St. Joseph, Inc.



The Company, through its wholly-owned subsidiary,
specializes in the recruitment and placement of professional data processing and technical personnel for clients on both a permanent
and contract basis.



Principles of Consolidation



The consolidated financial statements for the
years ended December 31, 2013 and 2012 include the activities of St. Joseph, Inc. and its wholly-owned subsidiary, Staf*Tek Services,
Inc. (“Staf*Tek”). All significant intercompany balances and transactions have been eliminated in consolidation.



Going Concern



The accompanying financial statements have
been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal
course of business. As shown in the accompanying financial statements, the Company has incurred recurring losses and has negative
working capital and a net stockholders’ deficiency at December 31, 2013 and 2012. In our financial statements for the fiscal
years ended December 31, 2013 and 2012, the Report of the Independent Registered Public Accounting Firm includes an explanatory
paragraph that describes substantial doubt about our ability to continue as a going concern. These factors, among others, may indicate
that the Company will be unable to continue as a going concern.



The financial statements do not include any
adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to
generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans
to generate the necessary cash flows with increased sales revenue and a reduction of general and administrative expenses over the
next 12 months. However, should the Company’s operations not provide sufficient cash flow; the Company has plans to raise
additional working capital through debt and/or equity financings. Insiders have loaned working capital to the Company on an as-needed
basis over the past two years; however, there are no formal committed financing arrangements to provide the Company with working
capital. There is no assurance the Company will be successful in producing increased sales revenues, attaining profitability, or
obtaining additional funding through debt and equity financings.



Cash Equivalents and Fair Value of Financial
Instruments



For the purposes of the statements of cash
flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to
be cash equivalents. The Company had no cash equivalents at December 31, 2013 and 2012.



The carrying amounts of cash, receivables and
current liabilities approximate fair value due to the short-term maturity of the instruments.



The Financial Accounting Standards Board’s
(“FASB”) Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing
the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which
these assets and liabilities must be grouped, based on significant levels of inputs as follows:



F-7







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



| | Level 1: | Quoted prices in active markets for identical assets or liabilities.                                                              
| | -------- | ----------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                   
| | Level 2: | Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.     
| |          |                                                                                                                                   
| | Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.



The determination of where assets and liabilities
fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuations
of the majority of the assets are considered Level 1 fair value measures under ASC 820.



Accounts Receivable



Accounts receivable consists of amounts due
from customers related to the Company’s employee placement services. The Company considers accounts more than 30 days old
to be past due. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is
written off against the allowance. The Company generally does not require collateral for its accounts receivable.



Property, Equipment and Depreciation



Property and equipment are stated at cost.
Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets as follows:



|Furniture and fixtures | 7 years
|---------------------- | -------
|Office equipment       | 5 years
|Computer equipment     | 3 years



Upon retirement or disposition of an asset,
the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations.
Repairs and maintenance are charged to expense as incurred and expenditures for additions and improvements are capitalized.



Impairment and Disposal of Long-lived Assets



The Company evaluates the carrying value of
its long-lived assets when indicators of impairment are present. Impairment is assessed when the undiscounted future cash flows
estimated to be generated by those assets are less than the assets’ carrying amount. If such assets are impaired, the impairment
to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets
to be disposed of are reported at the lower of the carrying value or fair value, less costs to sell. There were no impairments
recognized for the years ended December 31, 2013 and 2012.



Revenue Recognition



Staffing service revenues are recognized when
the services are rendered by the Company’s contract employees and collection is probable. Permanent placement revenues are
recognized when employment candidates accept offers of permanent employment.



Direct Costs of Services



Direct costs of staffing services consist of
payroll, payroll taxes, contract labor, and insurance costs for the Company’s contract employees. There are no direct costs
associated with permanent placement staffing services.



Advertising Costs



The Company expenses all advertising as incurred.
The Company incurred advertising costs totaling $905 and $902 for the years ended December 31, 2013 and 2012, respectively.



F-8







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Loss Per Common Share



The Company reports earnings (loss) per share
using a dual presentation of basic and diluted earnings per share. Basic loss per share excludes the impact of common stock equivalents.
Diluted loss per share utilizes the average market price per share when applying the treasury stock method in determining common
stock equivalents. Preferred stock and common stock options outstanding at December 31, 2013 were not included in the diluted loss
per share as all 5,708 preferred shares and all 502,500 options were anti-dilutive as the Company incurred losses during the year.
Preferred stock and common stock options outstanding at December 31, 2012 were not included in the diluted loss per share as all
5,708 preferred shares and all 452,500 options were anti-dilutive as the Company incurred losses during the year. Therefore, basic
and diluted losses per share at December 31, 2013 and 2012 were equal.



Income Taxes



Income taxes are provided for the tax effects
of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes related
primarily to differences between the recorded book basis and the tax basis of assets and liabilities for financial and income tax
reporting. The deferred tax assets and liabilities represent the deductible when the assets and liabilities are recovered or settled.
Deferred taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that
are available to offset future federal income taxes.



The
Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns,
as well as all open tax years in these jurisdictions. The Company has identified its federal tax return and its state tax return
in Oklahoma as “major” tax jurisdictions, as defined. The Company believes that its income tax filings positions and
deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on
the Company’s financial conditions, results of operations, or cash flow. Therefore, no reserves for uncertain income tax
positions have been recorded pursuant to ASC 740.



Stock-Based Compensation:



The Company recognizes share-based
compensation based on the options’ fair value, net of estimated forfeitures on a straight line basis over the requisite service
periods, which is generally over the awards’ respective vesting period, or on an accelerated basis over the estimated performance
periods for options with performance conditions. The stock option fair value is estimated on the grant date using the Black-Scholes
option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price
volatility, and risk-free interest rates. The Company has modified its outstanding stock options several times over the prior three
years resulting in recognition of additional expenses (see Note 7).



Use of Estimates



The preparation of the consolidated financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect certain reported amounts of assets and liabilities; disclosure of contingent assets and liabilities at the date of the consolidated
financial statements; and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results
could differ from those estimates.



NOTE 2 – RELATED PARTY TRANSACTIONS



On September 6, 2013, COLEMC Investments, LTD.
(COLEMC), a Canadian company owned by Gerry McIlhargey, President and Director of the Company, advanced the Company $4,800 for
working capital in exchange for a promissory note. The note matured on December 31, 2013, does not bear interest and has been extended
until December 31, 2014.



In prior years, COLEMC advanced the Company
a total of $45,000 for working capital in exchange for three promissory notes. The notes matured on December 31, 2011 and December
2010 and did not bear any interest. The notes have been extended until December 31, 2014.



F-9







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



During the years ended December 31, 2012 and
2011, an officer advanced the Company $7,500 and $16,700, respectively, for working capital in exchange for two promissory notes.
During the year ended December 31, 2013, the officer advanced the Company an additional $5,500. The total balance of the notes
is $29,700 and do not bear any interest. The notes matured on December 31, 2013 and have been extended until December 31, 2014.



During the year ended December 31, 2012, a
Director of the Company exercised 7,500 shares of its common stock at a strike price of $1.05 per share (see Note 7) for total
consideration of $7,875.



During the year ended December 31, 2011, the
Company sold 20,000 shares of its common stock in a private placement for $0.50 per share to an officer of the Company’s
subsidiary for total consideration of $10,000.



NOTE 3 – PROPERTY AND EQUIPMENT



Property and equipment consisted of the following
at December 31, 2012 and 2011:



|                              |  | 2012 |          |   | 2012 |  
|----------------------------- |  | ---- | -------- | - | ---- | -
|Furniture and fixtures        |  | $    | 35,447   |   |      | $
|Office equipment              |  |      | 61,465   |   |      |  
|Computer equipment            |  |      | 37,629   |   |      |  
|Leasehold improvements        |  |      | 19,585   |   |      |  
|Total property and equipment  |  |      | 154,126  |   |      |  
|Less accumulated depreciation |  |      | (154,126 | ) |      |  
|Property and equipment, net   |  | $    | -        |   |      | $



Depreciation expense totaled $-0- and $1,073,
respectively, for the years ended December 31, 2013 and 2012.



NOTE 4 – NOTES PAYABLE



Bank Loan



The Company originally had a $200,000 line
of credit of with the bank. In August 2010, the Company converted its line of credit with the bank to a bank loan which is collateralized
by all of assets of the Company’s subsidiary company, Staf*Tek, including all receivables and property and equipment. The
bank loan agreement included the following provisions 1) an agreement to provide insurance coverage for the collateralized assets
in the amount of $180,000; 2) covenants to provide certain financial documents to the bank on a monthly and annual basis. On September
9, 2013, the Company received a default letter from the bank. Since that time the bank has requested the company bring the loan
current by making monthly payments of $2,698 plus late fees of $50 per month for the nine months which the Company is delinquent,
for the total amount as of March 31, 2014 of $24,732, which includes principal, interest and fees. At such time the Company is
able to bring the loan current the bank has stated the remaining balance will be refinanced, which terms are yet to be determined.
The loan is in default at December 31, 2013 and the principal loan balance continues to bear 6.5% interest. In the event the Company
is unable to bring the bank loan current the bank may foreclose which would likely force the Company out of business.



As of December 31, 2013 and 2012, the Company
owed the bank $118,202 and $131,997, respectively.



Interest expense on the Company’s bank
borrowing was $8,332 and $9,538, during the years ended December 31, 2013 and 2012, respectively.



F-10







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Other Notes Payable



On July 31, 2013, an individual loaned the
Company $25,000 for working capital in exchange for a promissory note. The note matures on July 31, 2014 and bears interest at
seven percent. Accrued interest on the note totaled $730 at December 31, 2013.



On October 1, 2013, two individuals loaned
the Company $30,000 for working capital in exchange for promissory notes. The notes mature on October 1, 2014 and bear interest
at seven percent. Accrued interest on the note totaled $525 at December 31, 2013.



On November 15, 2013, an individual loaned
the Company $50,000 for working capital in exchange for a promissory note. The note matures on November 15, 2014 and bears interest
at seven percent. Accrued interest on the note totaled $438 at December 31, 2013.



On November 18, 2013, an individual loaned
the Company $25,000 for working capital in exchange for a promissory note. The note matures on November 18, 2014 and bears interest
at seven percent. Accrued interest on the note totaled $63 at December 31, 2013.



On December 13, 2013, an individual loaned
the Company $10,000 for working capital in exchange for a promissory note. The note matures on December 13, 2014 and bears interest
at seven percent. Accrued interest on the note totaled $35 at December 31, 2013.



NOTE 5 – CONCENTRATION OF CREDIT
RISK



The Company conducts a significant portion
of its operations with one customer. During the year ended December 31, 2013 and 2012 approximately 86.4% and 80% of the Company’s
service revenues were conducted with this one customer, respectively.



NOTE 6 – INCOME TAXES



A reconciliation of U.S. statutory federal
income tax rate to the effective rate is as follows:



|                                                                   |  | Years Ended  |       
|------------------------------------------------------------------ |  | ------------ | ------
|                                                                   |  | December 31, |       
|                                                                   |  | 2013         |       
|U.S. Federal statutory rate                                        |  |              | 34.00 
|State income tax, net of federal benefit                           |  |              | 3.96  
|Permanent book-to-tax differences                                  |  |              | -0.00 
|Timing Differences                                                 |  |              | -0.00 
|Net operating loss for which no tax benefit is currently available |  |              | -37.96
|                                                                   |  |              | 0.00  



At December 31, 2013, the Company’s current
tax benefit consisted of a net tax asset of $957,327 due to operating loss carryforwards of approximately $3,070,916 which have
been fully provided against in the valuation allowance of $957,327. The valuation allowance results in deferred tax expense, which
offsets the net deferred tax asset for which there is no assurance of recovery. The changes in the valuation allowance for the
years ended December 31, 2013 and 2012 were $259,509 and $153,583, respectively. Net operating loss carry forwards will expire
through 2033.



The valuation allowance will be evaluated at
the end of each year, considering positive and negative evidence about whether the asset will be realized. At that time, the allowance
will either be increased or reduced; reduction could result



F-11







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



in the complete elimination of the allowance
if positive evidence indicates that the value of the deferred tax asset is no longer impaired and the allowance is no longer required.



Should the Company undergo an ownership change,
as defined in the Internal Revenue Code, the Company’s tax net operating loss carry forwards generated prior to the ownership
change may be subject to an annual limitation, which could reduce or defer the utilization of those losses.



NOTE 7 – SHAREHOLDERS’ EQUITY



Preferred
Stock



The Board of Directors is authorized to issue
shares of Series A Convertible Preferred Stock and to fix the number of shares in such series as well as the designation, relative
rights, powers, preferences, restrictions, and limitations of all such series. In December 2003, the Company issued 386,208 shares
of Series A Convertible Preferred Stock and 5,708 have not been converted to common stock at December 31, 2013. During the year
ended December 31, 2013, the Company did not issue any Series A Convertible Preferred Stock. Series A Convertible Preferred Stock
is convertible to one share of common stock and has a yield of 6.75% dividend per annum, which is paid quarterly on a calendar
basis for a period of 5 years.



The Company is currently delinquent in making
dividend payments pursuant to the terms of a settlement agreement, as disclosed in an 8-K released on May 9, 2009. The accrued
balance due on Series A Convertible Preferred Stock dividends total $42,047 and $42,047 as of December 31, 2013 and 2012, respectively.
The Company will commence dividend payments pursuant to the terms of a settlement agreement as funds are available.



Common Stock



In a private placement during the year ended
December 31, 2013, the Company sold 410,000 shares of common stock to accredited investors at a price of $0.50 per share for gross
proceeds totaling $205,000. No underwriters were used and no underwriting discounts or commissions were payable. The shares have
been offered and sold by the Company in reliance upon the exemption from registration provided by Regulation D promulgated under
the Securities Act of 1933, as amended. The shares were offered and sold only to accredited investors; as such term is defined
by Rule 501 of Regulation D. All of the shares sold in the private placement are restricted securities pursuant to Rule 144.



In a private placement during the year ended
December 31, 2012, the Company sold 190,000 shares of common stock to accredited investors at a price of $0.50 per share for gross
proceeds totaling $95,000. No underwriters were used and no underwriting discounts or commissions were payable. The shares have
been offered and sold by the Company in reliance upon the exemption from registration provided by Regulation D promulgated under
the Securities Act of 1933, as amended. The shares were offered and sold only to accredited investors; as such term is defined
by Rule 501 of Regulation D. All of the shares sold in the private placement are restricted securities pursuant to Rule 144.



During the year ended December 31, 2012, a
Director of the Company exercised 7,500 shares of its common stock at a strike price of $1.05 per share (see Note 7) for total
consideration of $7,875.



Equity Awards Granted to Employees



On November 13, 2013, the Company granted options
to one employee to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.05 per share. The options
vested on the date of grant. The quoted market price of the Company’s common stock was $0.70 per share on the grant date.
The weighted average exercise price and weighted average fair value of these options on the date of grant were $1.05 per share.
Stock option compensation totaling $16,719 was recognized during the quarter ended December 31, 2013.



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ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The following schedule summarizes the changes
in the Company’s equity awards for the year ended December 31, 2012.



|                                                 |  |             |         |  |           |   |      | Weighted  |  |   | Weighted    |  |           |          
|------------------------------------------------ |  | ----------- | ------- |  | --------- | - | ---- | --------- |  | - | ----------- |  | --------- | ---------
|                                                 |  | Awards      |         |  |           |   |      | Average   |  |   | Average     |  |           |          
|                                                 |  | Outstanding |         |  | Exercise  |   |      | Exercise  |  |   | Remaining   |  | Aggregate |          
|                                                 |  | and         |         |  | Price     |   |      | Price     |  |   | Contractual |  | Intrinsic |          
|                                                 |  | Exercisable |         |  | Per Share |   |      | Per Share |  |   | Life        |  | Value     |          
|                                                 |  |             |         |  |           |   |      |           |  |   |             |  |           |          
|Outstanding at January 1, 2013                   |  |             | 452,500 |  |           | $ | 1.05 |           |  | $ | 1.05        |  |           | 1.50 yrs.
|Granted                                          |  |             | 50,000  |  |           | $ | 1.05 |           |  | $ | 1.05        |  |           |          
|Exercised                                        |  |             | -       |  |           | $ | -    |           |  | $ | -           |  |           |          
|Cancelled/Expired                                |  |             | -       |  |           | $ | -    |           |  | $ | -           |  |           |          
|Outstanding and exercisable at December 31, 2013 |  |             | 502,500 |  |           | $ | 1.05 |           |  | $ | 1.05        |  |           | 0.50 yrs.



On August 10, 2011 the Company’s board
of directors extended the deadline for the exercise of the 460,000 options by one year from August 24, 2011 to August 24, 2012.
The Company further extended the deadline to December 31, 2012 in a board of directors meeting on August 23, 2012; and most recently
extended the deadline to June 30, 2013 in a board meeting on December 12, 2012. The extensions were considered a modification of
the original stock options. Accordingly, the Company revalued the stock options, which resulted in a charge to share-based compensation
totaling $214,563 for the year ended December 31, 2012.



On May 2, 2013 the Company’s board of
directors extended the deadline for the exercise of the 452,500 options by six months from June 30, 2013 to December 31, 2013.
The Company further extended the deadline to June 30, 2014 in a board meeting on December 21, 2013. The extensions are considered
a modification of the original stock options. Accordingly, the Company revalued the stock options, which resulted in charges to
share-based compensation totaling $193,997 for the year ended December 31, 2013.



All stock options were fully vested as of December
31, 2013 and 2012. Aggregate intrinsic value is calculated by determining the amount by which the market price of the stock exceeds
the exercise price of the options on December 31, 2013, and then multiplying that amount by the number of options. The exercise
price exceeds the market value of the stock on December 31, 2013; therefore the aggregate intrinsic value is zero.



Upon the exercise of stock options, the Company
issues new shares that are authorized and not issued or outstanding. The Company does not plan to repurchase shares to meet stock
option requirements.



The Black-Scholes options valuation model was
developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable.
In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility.
Because the Company’s stock options have characteristics significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of its stock options.



NOTE 8 – LETTER OF INTENT



On August 8, 2012, St. Joseph, Inc. filed an
8-K current report in connection with the signing of a nonbinding Letter of Intent with Karavos Holdings Limited, for the arrangement
of an acquisition of 100% of a holding company which owns 50% interest in a domestic telecommunications operating company. The
8-K current report can be viewed at the SEC’s website; http://www.sec.gov/Archives/edgar/data/1177135/000149315212000866/form8k.htm.



NOTE 9 – LEGAL PROCEEDINGS



On or about January 24, 2012, our subsidiary,
Staf*Tek Services, Inc. was served notice that Danny McGowan, a former employee hired and assigned to work for Staf*Tek’s
client as a contractor, filed a lawsuit against Staf*Tek Services, Inc. and it’s client in the district court in Tulsa County,
Oklahoma, Case No. CJ-2011-7039, in connection with a wrongful termination complaint. Mr. McGowan alleges that he was terminated
after one month of employment, but feels he had a guaranteed contract for six months. The wording in his employment agreement that
he identifies as guaranteeing his employment for six months was inserted at the request of Staf*Tek’s client.



F-13







ST. JOSEPH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Staf*Tek’s client terminated Mr. McGowan
for performance issues after one month of employment. Mr. McGowan filed a lawsuit against Staf*Tek and the client and subsequently
filed a motion for default judgment, which was granted by the judge. On March 9, 2012, Stat*Tek filed a motion to vacate the default
judgment and requested a new trial. Staf*Tek has engaged counsel and intends to vigorously defend this action. As of this date
the client that terminated Mr. McGowan has been dismissed from the lawsuit by the judge because they had not been served within
a 6 months of the original filing of the lawsuit by Mr. McGowan’s counsel. Mr. McGowan and his attorney were three weeks
late responding to our request for discovery and we requested dismissal. However, the judge did not grant dismissal. Mr. McGowan
is seeking damages against Staf*Tek in an amount in excess of $75,000. Management deems the suit to be without merit, however,
the costs of defending against the complaint could be substantial. In the event judgment is made against the Company and payment
deemed appropriate it may force the Company out of business.



NOTE 10 – COMMITMENT



The Company leases office space in Tulsa, Oklahoma
under operating lease which expired in April 2012, the Company is currently leasing the office space on a month to month basis.



Rent expense during the years ended December
31, 2013 and 2012 were $36,327 and $35,990, respectively.



NOTE 11 - SUBSEQUENT EVENT



The Company has evaluated subsequent events
through March 31, 2014. Other than those described below, there have been no subsequent events after December 31, 2013 for which
disclosure is required.



In a private placement(s) conducted subsequent
to December 31, 2013, the Company sold 190,000 shares of common stock to accredited investors at a price of $0.50 per share for
gross proceeds totaling $95,000. No underwriters were used and no underwriting discounts or commissions were payable. The shares
have been offered and sold by the Company in reliance upon the exemption from registration provided by Regulation D promulgated
under the Securities Act of 1933, as amended. The shares were offered and sold only to accredited investors; as such term is defined
by Rule 501 of Regulation D. All of the shares sold in the private placement are restricted securities pursuant to Rule 144.



Subsequent to December 31, 2013, the Company
converted loans and related accrued interest totaling $157,580 into 315,160 shares of common stock at a value of $0.50 per share.



F-14