UNITED
STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D. C. 20549

FORM 10-K



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended: December 31, 2010



OR



|o | TRANSITION REPORT PURSUANT TO
  SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

For the transition period fromto



Commission File Number: 0-49936



ST. JOSEPH, INC

(Exact
name of registrant as specified in its charter)



|COLORADO                                 |  | CH909-0197648      
|---------------------------------------- |  | -------------------
|(State or other jurisdiction of          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                         |  |                    
|                                         |  |                    
|4870 S. Lewis, Suite 250, Tulsa, OK      |  | 74105              
|(Address of principal executive offices) |  | (Zip Code)         



Registrants
telephone number, including area code(918)742-1888



|Title of each class |  | Name of each exchange on which registered
|------------------- |  | -----------------------------------------
|Common stock        |  | None                                     



Securities registered pursuant to section 12(g) of the Act:  None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   Yes o     No
x

Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.    Yes o     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 o

Indicate
by checkmark 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 o

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Indicate by checkmark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant's knowledge, in a
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.      o

Indicate by checkmark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated
filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated
filer   Yes o     No o        
       Accelerated filer   Yes o     No o

Non-accelerated filer (Do not check if a smaller reporting company)    Yes o     No o        
       Smaller reporting company   Yes x     No o

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act).  Yes o     No x

Based on the closing sale price of $0.70 of the registrant's common stock on the last
business day of our most recently second fiscal quarter, June 30, 2010, 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 $5,130,637.

As of March 25, 2010 there were 11,212,302 shares of the registrant's Common Stock
issued and outstanding.

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ST. JOSEPH, INC.FORM 10-K

For the fiscal year ended December 31, 2010

TABLE OF CONTENTS



PART I

|                                             |                                                                                                   | Page  
|-------------------------------------------- | ------------------------------------------------------------------------------------------------- | ------
|Item 1.Item 1A.Item 1B.Item 2.Item 3.Item 4. | Business.Risk Factors.Unresolved Staff Comments.Properties.
Legal ProceedingsRemoved and Reserved | 258888

PART II

|Item 5.Item 6.Item 7.Item 7A.Item 8.Item 9.Item 9A(T).Item 9B. | Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.Selected financial data.Management's
Discussion and Analysis of Financial Condition and Results of Operations.Quantitative and
Qualitative Disclosures About Market Risk.Financial Statements and Supplementary Data.Changes
in and Disagreements With Accountants on Accounting and Financial Disclosure.Controls and
Procedures.Other Information. | 810101414141415
|-------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------
|

PART III

|Item 10.Item 11.Item 12.Item 13.Item 14. | Directors, Executive Officers and Corporate Governance.Executive Compensation.Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.Certain Relationships
and Related Transactions, and Director Independence.Principal Accountant Fees and Services. | 1518212324
|---------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------

PART IV

|Item 15. | Exhibits, Financial Statement Schedules. | 24
|-------- | ---------------------------------------- | --

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PART 1

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.

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PART I



ITEM 1.     BUSINESS.

Our Background and Business Development

St. Joseph, Inc. ("us," "we," "our" or the "Company") 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.

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 unsuccessful 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.  We acquired Staf*Tek
Services, Inc. ("Staf*Tek") as a wholly owned subsidiary on January 2, 2004.  We presently conduct all of our
business through Staf*Tek.

Staf*Tek Services, 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.

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:

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

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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: getsmartonline.com, staftek.com,
stafmedglobal.com, confidentialsearch.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.

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

We are dependent on a small number of clients for all of our revenues and on one client for a
significant percentage of our revenues.  During our year ended December 31, 2010, approximately 44% of our revenues
were derived from our largest client and all of our revenues were derived from a total of three clients.

Employees and Revenue Generating

We currently have four paid employees, and no part-time employees.

Acquisition Strategy

The Company has decided to pursue suitable candidates for future acquisition that potentially
create value for our existing shareholders. The Company hopes to acquire other operating companies as subsidiaries.
Acquisition targets may be in sectors other then the Company's current sector of providing employment agency services.
Although not the Company's goal, the Company would also consider a reverse merger, if it were seen to be a growth
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.

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Reports to Security Holders

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance with the Exchange Act we file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission").  Our security holders or any member of the public may
inspect and copy the reports, proxy statements and other information filed by us with the Commission at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as
well as the Commission's Regional Offices.  Our security holder or any member of the public may also call the Commission
at 1-800-SEC-0330 for more information about the public reference room, how to obtain copies of documents by mail or how
to access documents electronically on the Commission's Web site at (http://www.sec.gov).



ITEM 1A.     RISK FACTORS.

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, 2010 and 2009 contains an explanatory paragraph indicating that we have incurred recurring losses,
and as of December 31, 2010, 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.

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 2010 fiscal year, we had revenues of $534,001, down from $836,955 in our 2009 fiscal year,
and down from $2,432,778 in our 2008 fiscal year.  As of December 31, 2010 we had total assets of $102,134, down from
$225,156 on December 31, 2009 and down from $439,021 on December 31, 2008. Over this period of time, our total
stockholders' deficit increased to $374,571 as of December 31, 2010, as compared to $248,498 as of December 31, 2009
and $218,784 as of December 31, 2008.  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 and on our secured line of credit
for operating capital. 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.

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,
2010, the outstanding balance on this loan was $174,234. The loan carries interest in the amount of 6.5% per annum.  We
must make monthly payments of principal and interest in the amount of $2,698 per month with a balloon payment in the
amount of $115,406 coming due on August 31, 2013.  In the event we default on this loan, the bank may foreclose on our
assets. If any such foreclosure were to occur, we would not be able to continue operating.

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

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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.

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.

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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.

44% of our revenues come from one client.

During our year ended December 31, 2010, approximately 44% 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 may also create a material adverse effect on our revenues and profits.

Our revenues are generated by only three clients.

At the present time, our revenues come from only three clients.  The loss of any of these clients or
the decline in business from any of these clients will have a material adverse effect on our revenues and profits.

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

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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.



ITEM 1B.     UNRESOLVED STAFF COMMENTS.

Not Applicable.



ITEM 2.     PROPERTIES.

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 $2,667.  The lease commenced May 1, 2004 and
expires April 30, 2012.



ITEM 3.     LEGAL PROCEEDINGS.

None



ITEM 4.     (REMOVED AND RESERVED).

Not applicable.

PART II



ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is traded on the OTC Bulletin Board under the symbol STJO.OB.

The following table shows the high and low bid information for our common stock for each quarter
during 2009 - 2010.

|QUARTER                                 |  | LOW
      BID |      |  | HIGH
      BID |  
|--------------------------------------- |  | ------------- | ---- |  | -------------- | -
|                                        |  |               |      |  |                |  
|Quarter
      ending December 31, 2010  |  | $             | 0.50 |  |                | $
|Quarter
      ending September 30, 2010 |  | $             | 0.51 |  |                | $
|Quarter
      ending June 30, 2010      |  | $             | 0.65 |  |                | $
|Quarter
      ending March 31, 2010     |  | $             | 0.40 |  |                | $
|Quarter
      ending December 31, 2009  |  | $             | 0.56 |  |                | $
|Quarter
      ending September 30, 2009 |  | $             | 0.26 |  |                | $
|Quarter
      ending June 30, 2009      |  | $             | 0.07 |  |                | $
|Quarter
      ending March 31, 2009     |  | $             | 0.10 |  |                | $

The above information was obtained from the NASD. 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.

As of December 31, 2010, representing the last trading day of our most recently completed fiscal quarter,
there were 11,172,302 shares of common stock issued and outstanding, held by approximately 290 shareholders of record.
Within the holders of record of our common stock are depositories, such as Cede & Co., that hold shares of stock for
several brokerage firms which, in turn, hold shares of stock for a multitude of additional beneficial owners.  Accordingly,
it is impossible for us to determine exactly how many beneficial stockholders we actually have.  As of December 31,
2010,

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there were 5,708 shares of our Series A Convertible Preferred Stock issued and outstanding, held by one
shareholder of record.

As of December 31, 2010, there were 460,000 outstanding options or warrants to purchase shares of common
stock and 5,708 outstanding shares of Series A Preferred Stock convertible into shares of the Company's Common Stock.
The options may be converted into common shares at a weighted average exercise price of $1.05 per share and the preferred
shares may be converted into common shares on a one for one basis.

Dividend Policy

We have never paid a cash dividend on our common stock nor do we anticipate paying cash dividends on
our common stock in the near 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.

Penny Stock

Our common stock is subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule." Section 15(g) sets forth
certain requirements for transactions in penny stocks, and Rule 15g-9(d) (1) incorporates the definition of "penny stock"
that is found in Rule 3a51-1 of the Exchange Act. The Securities and Exchange Commission ("SEC") generally defines "penny
stock" to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. If our
Common Stock is deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements
on broker-dealers who sell penny stocks to persons other than established customers and accredited investors. "Accredited
investors" are persons with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with
their spouse. For transactions covered by these rules, broker-dealers must make a special suitability determination for the
purchase of such security and must have the purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the
first transaction, of a risk disclosure document, prepared by the SEC, relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the registered representative, and current
quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the penny
stocks held in an account and information on the limited market in penny stocks. Consequently, these rules may restrict
the ability of broker-dealers to trade and/or maintain a market in our Common Stock and may affect the ability of our
shareholders to sell their shares.

Recent Sales of Unregistered Securities

Set forth below is information regarding the sale of equity securities during the year ended December
31, 2010 that were not registered under the Securities Act of 1933, as amended (the "Securities Act"), and which were not
previously disclosed either in a quarterly report on Form 10-Q or on a current report on Form 8-K:

From October 1, 2010 through December 31, 2010, the Company sold 135,000 shares of common stock to four
accredited investors at a price of $0.50 per share for gross proceeds of $67,500. 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 to
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.

Additionally on December 1, 2010, the Company issued 75,000 stock options to an employee. These options
fully bested on the grant date, have an exercise price of $1.05 per share, and have a term of .65 years.  The securities
have been offered and sold by the Company in reliance upon the exemptions from registration provided by Section 4(2) of
the Securities Act of 1933, as amended, and Rule 701 promulgated under the Securities Act of 1933, as amended.

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ITEM 6.     SELECTED FINANCIAL DATA.

As a smaller reporting company, we are not required to provide the information required by this Item.



ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

GENERAL

The following discussion should be read in conjunction with our audited Consolidated Financial
Statements and accompanying Notes, included herein.  Except for the historical information contained herein, the
discussion in this report contains certain forward-looking statements that involve risks and uncertainties, such
as statements of our business plans, objectives, expectations and intentions as of the date of this filing. The
cautionary statements about reliance on forward-looking statements made earlier in this document should be given
serious consideration with respect to all forward-looking statements wherever they appear in this report,
notwithstanding that the "safe harbor" protections available to some publicly reporting companies under applicable
federal securities law do not apply to us as an issuer of penny stocks. Our actual results could differ materially
from the results anticipated in these statements as a result of a variety of factors, including those discussed in
our filings with the Securities and Exchange Commission and as discussed in the sections under the heading "Risk
Factors" in this Report.

Any reference to "we," "us" and "our" herein shall mean St. Joseph, Inc., together with its
consolidated subsidiary, Staf*Tek Services, Inc.

Overview

For the year ended December 31, 2010, we generated revenues of $534,001, which is significantly
down from $836,955 for the year ended December 31, 2009.  The decrease is primarily due to the decrease in revenues
from the loss in Staf*Tek's contracted employees whom either fulfilled their contracts or were laid off.  For the year
ending December 31, 2010, Staf*Tek's total service revenues decreased by $302,954, when compared to the total service
revenues for 2009.

Our ability to continue as a going concern is contingent upon the successful completion of additional
financing arrangements, and the development of operational solutions to achieve and maintain profitable operations.
We currently do not have adequate resources to fund our operations and we will need to raise funds and/or increase our
revenues in order to sustain our operations.  Management plans to finance our operating and capital requirements through
business alliances, such as strategic or financial transactions with third parties, the sale of securities, or other
financing arrangements. Amounts raised will be used for working capital purposes, to further develop our services, and
to provide financing for marketing and promotion of our business. While our Management is expending its best efforts
to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for
operations.

These conditions raise substantial doubt about our ability to continue as a going concern. Our financial
statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that may be necessary should the Company be unable to continue in existence.
(See "Risk Factors" and "Financial Statements Footnote 1.")

Since inception Staf*Tek business has been the recruiting and the placement of professional technical
personnel on a temporary and permanent basis in the Tulsa, Oklahoma area. Staf*Tek assists their clients with projects
that require specialized expertise ranging from multiple platform systems integration to end-user support, including
specialists in programming, networking, systems integration, database design and help desk support, as well as providing
qualified candidates in senior and entry level finance and accounting.

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Results of Operations for the Twelve Months Ended December 31, 2010 and 2009

|                                                  |  | December 31, 2010 |          |   | December 31, 2009 |  |        | Change |  |   | Change   |  
|------------------------------------------------- |  | ----------------- | -------- | - | ----------------- |  | ------ | ------ |  | - | -------- | -
|                                                  |  |                   |          |   | % of              |  |        |        |  |   | % of     |  
|                                                  |  | $                 |          |   | Revenue           |  |        | $      |  |   | Revenue  |  
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|Net
      Revenues                                |  | $                 | 534,001  |   |                   |  | 100.00 | %      |  | $ | 836,955  |  
|Cost
      of Revenues                            |  |                   | 403,291  |   |                   |  | 75.52  | %      |  |   | 648,846  |  
|Gross Margin (loss)                               |  |                   | 130,710  |   |                   |  | 24.48  | %      |  |   | 188,109  |  
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|Operating
      Expenses                          |  |                   |          |   |                   |  |        |        |  |   |          |  
|Selling,
      General andAdministrative Expenses |  |                   | 355,396  |   |                   |  | 66.55  | %      |  |   | 395,373  |  
|Depreciation and Amortization                     |  |                   | 1,149    |   |                   |  | 00.22  | %      |  |   | 1,149    |  
|Total
      Operating Expenses                    |  |                   | 356,545  |   |                   |  | 66.77  | %      |  |   | 396,522  |  
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|Income
      (Loss) from Operations               |  | $                 | (225,835 | ) |                   |  | -42.29 | %      |  |   | (208,413 | )
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|OTHER INCOME AND
       (EXPENSE)                 |  |                   |          |   |                   |  |        |        |  |   |          |  
|Other
      Income (Expense)                      |  |                   | (30,500  | ) |                   |  | -5.71  | %      |  |   | 25,926   |  
|Interest
      Expense                            |  |                   | (27,738  | ) |                   |  | (5.91  | )%     |  |   | (23,477  | )
|Net
      Other Expense                           |  | $                 | (58,238  | ) |                   |  | -10.91 | %      |  | $ | 2,449    |  
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|Loss
      before provision for income taxes      |  |                   | (284,073 | ) |                   |  | -53.20 | %      |  |   | (205,964 | )
|Provision
      for Income Taxes                  |  |                   | -        |   |                   |  | 0.00   | %      |  |   | -        |  
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|Net
      Income (Loss)                           |  | $                 | (284,073 | ) |                   |  | -53.20 | %      |  |   | (205,964 | )
|                                                  |  |                   |          |   |                   |  |        |        |  |   |          |  
|Benefit
      from tax loss carryforward          |  |                   | -        |   |                   |  | 0.00   | %      |  |   | -        |  

Net Revenues

Net Revenues for the twelve months ended December 31, 2010 decreased to $534,001 from $836,955
for the twelve months ended December 31, 2009. The decrease in net revenues of $302,954 or approximately 36%, over
the 2010 period is due primarily to decreased revenues generated by the loss of contracted employees and a decrease
in hiring due to economic conditions since the prior period.

Cost of Revenues



Gross Margin

The overall gross margin for the twelve months ended December 31, 2010 decreased to $130,710 from
$188,109 for the twelve months ended December 31, 2009. The overall decrease in gross margin of $57,399 or approximately
31% over the 2009 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, 2010 decreased to $356,545 from
$396,522 for the twelve months ended December 31, 2009.  Reasons for the overall decrease in operating expenses of
$39,977 or approximately 10.08%, over the 2009 period is covered below in our discussions of General and Administrative
Expenses and Stock-Based Compensation.

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General and Administrative Expenses

General and administrative expenses for the twelve months ended December 31, 2010 decreased to
$355,396 from $395,373 for the twelve months ended December 31, 2009. The decrease in general and administrative
expenses of $39,977 or approximately 10.11%, over the 2010 period is due primarily to the reduction in administrative
staff salaries.

Stock-Based Compensation - Common Stock Options Granted

We granted 75,000 common stock options to an employee in the twelve months ended December 31, 2010.

Total Operating Income and Losses

Total operating losses for the twelve months ended December 31, 2010 increased to $225,835 from
operating losses of $208,413 for the twelve months ended December 31, 2009. The overall increase in operating losses
of $17,422 or approximately 8.36% over the 2009 period is due to reduction in gross margin.

Net Other Expenses

Net other income (expenses) for the twelve months ended December 31, 2010 decreased to $(58,238)
net expense from $2,449 net income for the twelve months ended December 31, 2009.  The overall increase in our
other expenses of $60,687, or approximately 2,478% over the 2009 period is primarily due to the loss for settlement
of a law suit with Zachary Karo and the gain for settlement of a law suit with John Simmons in 2009.

Interest Income

Interest income for the twelve months ended December 31, 2010 decreased to $0 from ($1) for the
twelve months ended December 31, 2009.

Interest Expense

Interest expense for the twelve months ended December 31, 2010 increased to $27,738 from $23,477
for the twelve months ended December 31, 2009. The overall increase in our interest expense of $4,261 or approximately
18% over the 2009 period is due primarily to the increase of interest bearing debts.

Net Loss

Net Loss for the twelve months ended December 31, 2010 increased to $284,073 from $205,964 for the
twelve months ended December 31, 2010. This increase in net loss of $78,109 or approximately 37.92% over the 2010
period is due primarily to the reduction of gross margin loss of contractors.

Liquidity and Capital Resources

|                                                          |  | December 31, 2010 |          |   | December 31, 2009 |  
|--------------------------------------------------------- |  | ----------------- | -------- | - | ----------------- | -
|Net
      cash (used in) provided by operating activities |  | $                 | (265,117 | ) |                   | $
|Net
      cash (used in) provided by investing activities |  | $                 | -        |   |                   | $
|Net
      cash (used in) provided by financing activities |  | $                 | 123,542  |   |                   | $

General

For the twelve months ended December 31, 2010, we had negative cash flows resulting from $265,117
of cash used in our operating activities and $123,542 of cash provided by our financing activities.  Accordingly,
for the twelve months ended December 31, 2010, our funds from operations were not sufficient to cover our daily
operations as further explained below.

Cash Flows from Operating Activities

Net cash used in our operating activities of $265,117 for the twelve months ended December 31,
2010 was primarily attributable to the net loss and offset by depreciation expense, increases in accounts receivable
and increases in accrued liabilities.

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Cash Flows from Investing Activities

Net cash used in our investing activities of $0 for the twelve months ended December 31, 2010.

Cash Flows from Financing Activities

Net cash provided by our financing activities of $123,542 for the twelve months ended December 31,
2010 primarily from proceeds of common stock sales.

Internal Sources of Liquidity

For the twelve months ended December 31, 2010, the revenues generated from our operations were
insufficient to fund our daily operations.  Gross profit for fiscal year 2010 was $130,710, which was insufficient
to meet our operating expenses of $356,545 for the same period. There is no assurance that funds from our future
operations will meet the requirements of our daily operations in the future. In the event that funds from our
operations will be insufficient to meet our operating requirements, we will need to seek other sources of financing
to maintain liquidity.

External Sources of Liquidity

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 its 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 of December 31, 2010, we have debt in the total aggregate amount of $190,234, as summarized in
Notes 2 and 4 to the financial statements. This debt was incurred to pay our operating costs, compliance costs and
legal fees.  Of this debt, as of December 31, 2010, $174,234 represented the balance of a bank loan which is secured
by all of our assets. This bank loan carries interest of 6.5% per annum and requires monthly payment of $2,698 per
month with a balloon payment in the amount of $115,406 coming due on August 31, 2011.  In the event we default on
this loan, the bank may foreclose on our assets.

From February 16, 2010 to February 15, 2011 we sold 385,000 shares of our common stock to 10
accredited investors at a price of $0.50 per share for gross proceeds of $192,500.

Our business plan involves, in part, increasing the number of employees placed both on a temporary
and permanent basis. Such increased placement is expected to result in increased profit to us, although it also
results in increased short- term cash needs. We have utilized net revenues, the proceeds from a number of private
sales of our equity securities, the exercise of options, the issuance of promissory notes and our line of credit to
meet our working capital requirements. We are reluctant to incur further debt and intend to rely upon net revenues
and private sales of equity securities to meet our liquidity needs for the next 12 months.

Our liquidity and capital resources, as well as business prospects, are all subject to the risks
disclosed in Item 1A, among others.

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 paid $24,192 in Series A dividends during the year ending
December 31, 2010 leaving an accrued balance in the amount of $58,175. The Company is currently making dividend
payments pursuant to the terms of a settlement agreement, as disclosed in an 8-K released on May 9, 2010.

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

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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.



ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.



ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our Financial Statements and supplementary data are included beginning immediately following the
signature page to this Report.



ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.

none.



ITEM 9A.     CONTROLS AND PROCEDURES.

Not applicabble.



ITEM 9A(T).     CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and 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, 2010 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, 2010, that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

The term disclosure controls and procedures means 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.

Changes in Internal Control over Financial Reporting.

There have been no changes in our internal control over financial reporting during the year ended
December 31, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

Management's Evaluation of Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. This system is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements
for external purposes in accordance with generally accepted accounting principles. Our internal control over financial
reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect our transactions and disposition of our assets; (2) provide reasonable

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assurance that transactions are recorded as necessary to permit preparation of consolidated financial
statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation. The scope of management's assessment of the effectiveness of internal control over financial reporting
includes all of our Company's subsidiaries.

Our management performed an assessment as of December 31, 2010 of the effectiveness of our internal
controls over financial reporting based upon the framework in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO), and concluded that our internal control over
financial reporting was effective as of December 31, 2010.



ITEM 9B.     OTHER INFORMATION.

None.

PART III



ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

The following information sets forth the names of the directors, executive officers, promoters control
persons of the Company, their present positions with the Company, and their biographical information.

|Name                     |  | Age |  | Position(s) Held                                      |  | Date Service Began
|------------------------ |  | --- |  | ----------------------------------------------------- |  | ------------------
|Gerald
      McIlhargey  |  | 63  |  | President,
      Chief Executive Officer and Director |  | March
      2004  
|Kenneth
      L. Johnson |  | 51  |  | Secretary,
      Treasurer and Director               |  | April
      2000  
|Bruce
      Schreiner    |  | 56  |  | Director                                              |  | October
      2003
|Donal
      Ford         |  | 55  |  | Director                                              |  | August
      2006 
|Maureen
      O'Brien    |  | 62  |  | Director                                              |  | August
      2006 
|John
      Blackmon      |  | 55  |  | President
      of Staf*Tek Services Inc.             |  | June
      2004   

Gerald McIlhargey - Mr. McIlhargey has been a Director of St. Joseph since March of 2004.
Mr. McIlhargey has spent over 26 years in management consulting for public companies. In his various management
roles, Mr. McIlhargey has extensive experience in Marketing and Manufacturing as well as the Financing of Public
Companies. Mr. McIlhargey has had a key role with several public companies, including International Corona Resources,
Collingwood Energy, Sense Technologies Inc. and Maple Leaf Petroleum.  Mr. McIlhargey received a Bachelor of Education
degree from Simon Fraser University in British Columbia, Canada in 1972.

Kenneth L. Johnson - Mr. Johnson has been a Director and Secretary/Treasurer of the Company
since April of 2000.  Mr. Johnson has been 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.  Mr. Johnson 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 - Mr. Schreiner, CPA, has been a Director of the Company since October
of 2003. Mr. Schreiner has also been 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. Mr. Schreiner is currently on the Board of Directors of

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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 - Mr. Ford has been a Director of the Company since August 24, 2006.  For
the past ten years Mr. Ford has been President of Pinnacle Financial Services, Inc., a Third Party Administrator
for Pension and Profit Sharing Plans located in Lantana, FL. 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 - Ms. O'Brien has been a Director of the Company since August 24, 2006. For
the past six 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.

John Blackmon - 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.  Mr. Blackmon 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.

Term of Office

Our directors are elected for a one-year term to hold office until the next annual general meeting
of our shareholders, or until removed from office in accordance with our bylaws and applicable law.  Our officers are
appointed by our Board of Directors and hold office until removed by the Board.

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;


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·
    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;




·
    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, 2010, the Board met four times. During fiscal year 2010,
no director attended fewer than 75% 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.

The 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, 2010, the Audit Committee met
one time. 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.

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17

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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.

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, 2010, the Compensation Committee met one
time 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 Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires our officers
and directors and persons owning more than ten percent of our Common Stock to file initial reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC"). Officers, directors and persons
who are the beneficial owners of more than 10% of the common stock of the Company are required by SEC regulation
to furnish us with copies of all Section 16(a) forms they file. Based solely upon review of the copies of such
reports furnished to us during, and with respect to, the fiscal year ended December 31, 2010 or any written
representations we received from a director, officer, or beneficial owner of more than 10% of our common stock
that no other reports were required during that period, we believe that, for the fiscal year ended December 31,
2010, all Section 16(a) filing requirements applicable to our reporting persons were met.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, and persons performing similar functions.  The
code of ethics can be viewed on our website: www.stjosephinc.com.



ITEM 11.     EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth information concerning the compensation of our named executive
officers during 2008, 2009 and 2010:

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18

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|Name
      and
      Principal
      Position |  | Year |  | Salary
      ($) |        |  | Bonus
      ($) |  |   | Stock
      Awards
      ($) |  |  | Option
      Awards
      ($) |  |  | Non-
      Equity
      Incentive
      Plan
      Com-
      pensation
      ($) |   |  | Non-
      Qualified
      Deferred
      Compen-
      sation
      Earnings
      ($) |  |   | All other
      Compen-
      sation
      ($) |  |  | Total
      ($) | 
|--------------------------------------------- |  | ---- |  | ---------------- | ------ |  | --------------- |  | - | ---------------------------- |  |  | ----------------------------- |  |  | --------------------------------------------------------------------------------- | - |  | --------------------------------------------------------------------------------------- |  | - | ---------------------------------------------- |  |  | --------------- | 
|                                              |  |      |  |                  |        |  |                 |  |   |                              |  |  |                               |  |  |                                                                                   |   |  |                                                                                         |  |   |                                                |  |  |                 | 
|(a)                                           |  | (b)  |  | (c)              |        |  | (d)             |  |   | (e)                          |  |  | (f)                           |  |  | (g)                                                                               |   |  | (h)                                                                                     |  |   | (i)                                            |  |  | (j)             | 
|                                              |  |      |  |                  |        |  |                 |  |   |                              |  |  |                               |  |  |                                                                                   |   |  |                                                                                         |  |   |                                                |  |  |                 | 
|Gerald
      McIlhargey                       |  | 2008 |  |                  | -      |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|President,
      CEO and                      |  | 2009 |  |                  | -      |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|Director                                      |  | 2010 |  |                  | -      |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|                                              |  |      |  |                  |        |  |                 |  |   |                              |  |  |                               |  |  |                                                                                   |   |  |                                                                                         |  |   |                                                |  |  |                 | 
|Kenneth
      L. Johnson,                     |  | 2008 |  |                  | -      |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|Secretary,
      Treasurer and                |  | 2009 |  |                  | -      |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|Director                                      |  | 2010 |  |                  | -      |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|                                              |  |      |  |                  |        |  |                 |  |   |                              |  |  |                               |  |  |                                                                                   |   |  |                                                                                         |  |   |                                                |  |  |                 | 
|John
      Blackmon,                          |  | 2008 |  | $                | 92,000 |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|President
      of Staf*Tek                   |  | 2009 |  | $                | 81,000 |  |                 |  | - |                              |  |  | -                             |  |  |                                                                                   | - |  |                                                                                         |  | - |                                                |  |  | -               | 
|Services,
      Inc.                          |  | 2010 |  | $                | 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 August 24, 2011.

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 August 24, 2011.

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 August 24, 2011.

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19

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OUTSTANDING EQUITY AWARDS AT FISCAL-END

The following table provides information concerning equity awards as of our 2010 fiscal year end,
December 31, 2010, held by each of our named executive officers.

|OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | 
|-------------------------------------------- | 
|Option Awards                                | 
|Name                                         | 
|                                             | 
|(a)                                          | 
|                                             | 
|Gerry
      McIlhargey                       | 
|                                             | 
|Kenneth
      L. Johnson                     | 
|                                             | 
|John
      Blackmon                          | 




Director Compensation

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 expire on August 24, 2011.  All of these options were still outstanding and unexercised as of
December 31, 2010.

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, 2010:

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20

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|Name                  |  | Fees
      earned
      or paid
      in cash
      ($) |   |  | Stock
      Awards
      ($) |  |   | Option
      Awards
      ($) |  |  | Non-equity
      incentive plan
      compensation
      ($) |  |  | Nonqualified
      deferred
      compensation
      earnings
      ($) |   |  | All other
      compensation
      ($) |  |   | Total
      ($) | 
|--------------------- |  | ------------------------------------------------------- | - |  | ---------------------------- |  | - | ----------------------------- |  |  | ------------------------------------------------------------ |  |  | ----------------------------------------------------------------------- | - |  | -------------------------------------- |  | - | --------------- | 
|(a)                   |  | (b)                                                     |   |  | (c)                          |  |   | (d)                           |  |  | (e)                                                          |  |  | (f)                                                                     |   |  | (g)                                    |  |   | (h)             | 
|                      |  |                                                         |   |  |                              |  |   |                               |  |  |                                                              |  |  |                                                                         |   |  |                                        |  |   |                 | 
|Bruce
      Schreiner |  |                                                         | - |  |                              |  | - |                               |  |  | -                                                            |  |  |                                                                         | - |  |                                        |  | - |                 | 
|                      |  |                                                         |   |  |                              |  |   |                               |  |  |                                                              |  |  |                                                                         |   |  |                                        |  |   |                 | 
|Donal
      Ford      |  |                                                         | - |  |                              |  | - |                               |  |  | -                                                            |  |  |                                                                         | - |  |                                        |  | - |                 | 
|                      |  |                                                         |   |  |                              |  |   |                               |  |  |                                                              |  |  |                                                                         |   |  |                                        |  |   |                 | 
|Maureen
      O'Brien |  |                                                         | - |  |                              |  | - |                               |  |  | -                                                            |  |  |                                                                         | - |  |                                        |  | - |                 | 



ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Equity Compensation Plans

Information regarding securities authorized for issuance under equity compensation plans
is disclosed in Item 5 under "Equity Compensation Plans."

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of March 21, 2011 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 5 percent 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,                                 |  |                                                       | 889,923 | (3) |                           |  | 7.93 | %                                                                       |  |  | 0                         | 
|President,
      Chief Executive                         |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|Officer
      and Director                               |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|                                                         |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|Kenneth
      L. Johnson,                                |  |                                                       | 150,000 | (4) |                           |  | 1.34 | %                                                                       |  |  | 0                         | 
|Secretary,
      Treasurer and                           |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|Director                                                 |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|                                                         |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|Bruce
      Schreiner, Director                          |  |                                                       | 50,000  | (5) |                           |  | 0.45 | %                                                                       |  |  | 0                         | 
|                                                         |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|Maureen
      O'Brien, Director                          |  |                                                       | 75,000  | (5) |                           |  | 0.67 | %                                                                       |  |  | 0                         | 
|                                                         |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|Donal
      Ford, Director                               |  |                                                       | 75,000  | (5) |                           |  | 0.67 | %                                                                       |  |  | 0                         | 
|                                                         |  |                                                       |         |     |                           |  |      |                                                                         |  |  |                           | 
|John
      Blackmon,President of Staf*Tek Services, Inc. |  |                                                       | 89,954  | (5) |                           |  | 0.80 | %                                                                       |  |  | 0                         | 

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21

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|All
      Executive Officers and |  |  | 1,319,877 |  |  |  | 11.86 | % |  |  | 0     |  |  |  | 0   | %
|-------------------------------- |  |  | --------- |  |  |  | ----- | - |  |  | ----- |  |  |  | --- | -
|Directors
      as a Group       |  |  |           |  |  |  |       |   |  |  |       |  |  |  |     |  
|(5
      individuals)            |  |  |           |  |  |  |       |   |  |  |       |  |  |  |     |  
|                                 |  |  |           |  |  |  |       |   |  |  |       |  |  |  |     |  
|Hong
      Kong Base, Ltd. (6)   |  |  | 1,450,000 |  |  |  | 12.93 | % |  |  | 0     |  |  |  | 0   |  
|Desert
      Projects, Inc. (7)  |  |  | 1,116,667 |  |  |  | 9.96  | % |  |  | 0     |  |  |  | 0   |  
|Camille
      Quinn(8)           |  |  | 8,994     |  |  |  | 0.03  | % |  |  | 5,708 |  |  |  | 100 | %




|(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 Desert Projects, Inc. is 73-185, Suite
      D, Highway 111, Palm Desert, California, 92260. 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, OK 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 11,212,302shares
      of common stock and 5,702 shares of Series A Preferred Stock issued and
      outstanding on March 19, 2010. 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.





(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)
    Hong
      Kong Base Ltd is a corporation organized under the laws of Hong Kong and
      is beneficially owned by Yvonne Chun Siu
Fun.





(7)
    Desert
      Projects, Inc. is a corporation organized under the laws of the State of
      Nevada and is beneficially owned by James Ralph
  Houston.





(8)
    Includes
      5,708 shares of common stock, which would be issuable on conversion of the
      5,7082 shares of Series A Preferred Stock held by Ms.
  Quinn.





Equity Compensation Plans

The following table sets forth information as of December 31, 2009 with respect to compensation
plans under which we are authorized to issue shares of our common stock, aggregated as follows:

| | o | all compensation plans previously approved by security holders; and
| | - | -------------------------------------------------------------------
| | o | 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    |  |                                                                                                               | 460,000
|approved
      by security holders |  |                                                                                                               |        
|                                   |  |                                                                                                               |        

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Equity Compensation Plans (continued)

|                                                                 |  | Equity Compensation Plan Information                                                                          |        
|---------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------- | -------
|Plan category                                                    |  | Number of securities to be
      issued upon exercise of
      outstanding options,
      warrants and rights |        
|                                                                 |  | (a)                                                                                                           |        
|Equity
      compensation plans not approved by security holders |  |                                                                                                               | 0      
|Total                                                            |  |                                                                                                               | 460,000




|(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, 2011.  On December 1, 2010, There were 75,000 options granted which will expire
on August 24, 2011.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------






ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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 2009 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

During the quarter ended December 31, 2010, COLEMC Investments, Ltd., a Canadian company owned by
Gerry McIlhargey, President and Director of the Company, advanced $6,000 for working capital in exchange for a
promissory note. The note matures on December 31, 2011 and does not bear any interest.  As of December 31, 2010
and 2009, the amounts due to the affiliate totaled $16,000, and $10,000, respectively.

John Blackmon

During the quarter ended December 31, 2010, John Blackmon, President of StafTek Services, Inc.
purchased 10,000 shares of our common stock in a private placement for $0.50 per share.

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.

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23

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ITEM 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES.

We appointed the accounting firm of Cordovano and Honeck, LLP, located at 88 Inverness Circle East,
Building M-103, Englewood, Colorado 80112, to serve as our independent auditors for the fiscal years ended December
31, 2009 and 2008.  During our fiscal years 2009 and 2008, accrued fees owed to Cordovano and Honeck,
LLP are as follows:

Audit Fees

|2010 |           |  | 2009 |  
|---- | --------- |  | ---- | -
|$    | 31,092.00 |  |      | $




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.

|2010 |      |  | 2009 |  
|---- | ---- |  | ---- | -
|$    | 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.

|2010 |      |  | 2009 |  
|---- | ---- |  | ---- | -
|$    | 0.00 |  |      | $



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.                                                                                            

24





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.


25





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.





Dated:  March
30, 2011





St.
Joseph, Inc.





By:  /s/ Gerry
      McIlhargeyGerry
      McIlhargey, President and Chief Executive
  Officer





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/ Gerry McIlhargey
    
    March
      30, 2011Gerry
      McIlhargey, President,Chief
      Executive Officer andDirector/s/Kenneth
      L. Johnson
    
    March
      30, 2011Kenneth
      L. Johnson,Secretary-Treasurer
      and Director/s/Bruce
      Schreiner
    
    March
      30, 2011Bruce
      Schreiner, Director/s/
      Donal Ford
    
    March
      30, 2011Donal
      Ford, Director/s/
      Maureen O'Brien
    
    March
      30, 2011Maureen
      O'Brien, Director


26


ST.
JOSEPH, INC.


Index
to Consolidated Financial Statements





PageReport
      of Independent Registered Public Accounting Firm
    2Consolidated
      Balance Sheet at December 31, 2010 and 2009
    3Consolidated
      Statements of Operations for the years ended December 31, 2010 and
      2009
    4Consolidated
      Statement of Changes in Stockholders' Deficit for the years ended December
      31, 2010 and 2009
    5Consolidated
      Statements of Cash Flows for the years ended December 31, 2010 and
      2009
    6Notes
      to Consolidated Financial Statements
    7-15


1


REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





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





We have audited the accompanying consolidated balance sheets of St. Joseph, Inc.
as of December 31, 2010 and 2009, and the related consolidated statements of income and stockholders'
deficit, and cash flows for each of the years in the two-year period ended December 31, 2010. St.
Joseph, Inc.'s management is responsible for these consolidated financial statements. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the 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 consolidated financial statements are free of material misstatement.
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 effectiveness of the company's internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in
all material respects, the financial position of St. Joseph, Inc. as of December 31, 2010 and 2009, and the
results of its operations and its cash flows for each of the years in the two-year period ended December 31,
2010 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company
will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company
incurred recurring losses and has a negative working capital and net capital deficiency.  These conditions raise
substantial doubt about the Company's ability to continue as a going concern.  Further information and management's
plans in regard to this uncertainty are also described in Note 1.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.




Cordovano
and Honeck LLP


Englewood,
Colorado


March 28,
2011


2


ST.
JOSEPH, INC.


CONSOLIDATED
BALANCE SHEETS





December
      31,
    
    
    December
      31,2010
    
    
    2009ASSETSCURRENT
      ASSETS:Cash
    
    $
    8,406
    
    
    $
    149,981Accounts
      receivable, net of allowance for doubtful accounts of
    $2,208
    
    
    90,276
    
    
    
    70,574Total
      Current Assets
    
    
    98,682
    
    
    
    220,555Property
      and equipment, net of Accum Dep of $151,904 and $150,755,
      respectively
    
    
    2,222
    
    
    
    3,371Deposits
    
    
    1,230
    
    
    
    1,230Total
      Assets
    
    $
    102,134
    
    
    $
    225,156LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIES:Accounts
      payable
    
    $
    214,106
    
    
    $
    190,207Accrued
      liabilities
    
    
    14,190
    
    
    
    11,080Accrued
      preferred dividend
    
    
    58,175
    
    
    
    82,367Notes
      Payable:Line of Credit (Note 4)
    
    
    -
    
    
    
    180,000Bank Loan (Note 4)
    
    
    174,234
    
    
    
    -Loan
      from Officer
    
    
    16,000
    
    
    
    10,000Total
      Current Liabilities
    
    
    476,705
    
    
    
    473,654STOCKHOLDERS'
      DEFICIT (Note 7):Stock subscription receivable
    
    
    (25,000
    )
    
    
    -Preferred
      stock, Series A, $.001 par value, $3.00 face value; 25,000,000 shares
      authorized, 5,708 shares issued and outstanding
    
    
    6
    
    
    
    6Common
      stock, $.001 par value; 100,000,000 shares authorized, 10,812,302 issued
      and outstanding
    
    
    11,172
    
    
    
    10,812Additional
      paid-in capital
    
    
    2,306,066
    
    
    
    2,123,426Retained
      deficit
    
    
    (2,666,815
    )
    
    
    (2,382,742
    )Total
      Stockholders' Deficit
    
    
    (374,571
    )
    
    
    (248,498
    )Total
      Liabilities and Stockholders' Deficit
    
    $
    102,134
    
    
    $
    225,156


The accompanying footnotes are an integral part of these financial statements 3


ST.
JOSEPH, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS





Year EndedDecember 31,2010
    
    
    2009REVENUES:Contract
    
    $
    534,001
    
    
    $
    836,955COST
      OF REVENUES
    
    
    403,291
    
    
    
    648,846Gross
      Margin
    
    
    130,710
    
    
    
    188,109COSTS
      AND EXPENSES:General
      and Administrative Expenses
    
    
    355,396
    
    
    
    395,373Depreciation
      and Amortization
    
    
    1,149
    
    
    
    1,149Total
      Costs and Expenses
    
    
    356,545
    
    
    
    396,522Operating
      Income (Loss)
    
    
    (225,835
    )
    
    
    (208,413
    )OTHER
      INCOME AND (EXPENSE):Other
      Income (expense)
    
    
    (30,500
    )
    
    
    25,926Interest
      Expense
    
    
    (27,738
    )
    
    
    (23,477
    )Net
      Other Expense
    
    
    (58,238
    )
    
    
    2,449Loss
      before provision for income taxes
    
    
    (284,073
    )
    
    
    (205,964
    )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
    
    
    (284,073
    )
    
    
    (205,964
    )Benefit
      from tax loss carryforward
    
    
    -
    
    
    
    -Net
      Loss
    
    
    (284,073
    )
    
    
    (205,964
    )Loss
      applicable to common stockholders
    
    $
    (284,073
    )
    
    $
    (205,694
    )Basic
      and diluted loss per common share
    
    $
    (0.026
    )
    
    $
    (0.021
    )Weighted
      average common shares outstanding
    
    
    10,958,080
    
    
    
    10,032,642


The accompanying footnotes are an integral part of these financial statements 
 4


ST.
JOSEPH, INC.


CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT





Additional
    
    
    


    
    
    StockPreferred Stock-Series A
    
    
    Common Stock
    
    
    Paid-in
    
    
    Retained


    
    
    SubscriptionShares
    
    
    Par value
    
    
    Shares
    
    
    Parvalue
    
    
    Capital
    
    
    Deficit


    
    
    Receivable



    
    
    TotalBalance December 31,
      2008
    
    
    386,208
    
    
    $
    386
    
    
    
    7,406,802
    
    
    $
    7,407
    
    
    $
    1,950,201
    
    
    $
    (2,095,398

    )
    
    
    -




    
    
    $
    (137,404
    )Sale of common
      stock @$0.05 per share
    
    
    -
    
    
    
    -
    
    
    
    2,900,000
    
    
    
    2,900
    
    
    
    142,100
    
    
    
    -

    
    
    
    -




    
    
    
    145,000Conversion
      of notes payable @$0.05 per share to common stock
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    100
    
    
    
    4,900
    
    
    
    


    
    
    
    -


    
    
    
    5,000Conversion
      of preferred to common @$0.001 per share
    
    
    (380,500
    )
    
    
    (380
    )
    
    
    380,500
    
    
    
    380
    
    
    
    
    
    
    
    



    
    
    -



    
    
    
    -Common
      stock options exercised
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    25
    
    
    
    26,225
    
    
    
    


    
    
    
    -





    
    
    
    26,250Net
      loss for the year ended December 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (205,964

)
    
    
    -




    
    
    
    (205,964
    )Balance December 31,
      2009
    
    
    5,708
    
    
    
    6
    
    
    
    10,812,302
    
    
    
    10,812
    
    
    
    2,123,426
    
    
    
    (2,382,742

    )
    
    
    -




    
    
    
    (248,498
    )Stock
      Subscription   Receivable
    
    
    -
    
    
    
    -
    
    
    
    50,000
    
    
    
    50
    
    
    
    24,950
    
    
    
    -

    
    
    
    (25,000
    )





    
    
    -Sale of common
      stock @$0.50 per share
    
    
    -
    
    
    
    -
    
    
    
    295,000
    
    
    
    295
    
    
    
    147,205
    
    
    
    -

    
    
    
    -
    





    
    
    147,500Common stock
      @$0.70 per share to settle lawsuit
    
    
    -
    
    
    
    -
    
    
    
    15,000
    
    
    
    15
    
    
    
    10,485
    
    
    
    -

    
    
    
    -
    

    


    
    
    10,500Net
      loss for the year ended December 31, 2010
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (284,073

)
    
    
    -





    
    
    
    (284,073
    )Balance
      December 31, 2010
    
    
    5,708
    
    
    $
    6
    
    
    
    11,172,302
    
    
    $
    11,172
    
    
    $
    2,306,066
    
    
    $
    (2,666,815
    )




    
    $
    (25,000
    )



    
    $
    (374,571
    )


The accompanying footnotes are an intergral part of these financial statements 5


ST.
JOSEPH, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOW





Years
      EndedDecember 31,2010
    
    
    2009OPERATING ACTIVITIESNet income
      (loss)
    
    $
    (284,073
    )
    
    $
    (205,964
    )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
    
    
    1,149
    
    
    
    1,149Gain
      on settlement of note payable due to related party and related accrued interest
    
    
    -
    
    
    
    (25,526
    )Lawsuit settlement
      for common shares
    
    
    10,500
    
    
    
    -Changes
      in operating assets and liabilities:Increase/decrease
      in accounts receivable
    
    
    (19,702
    )
    
    
    142,247Increase/decrease
      in accounts payable
    
    
    23,899
    
    
    
    (73,999
    )Increase/decrease
      in accrued liabilities
    
    
    3,110
    
    
    
    (4,682
    )Net
      cash provided by (used in) operating activities
    
    
    (265,117
    )
    
    
    (166,775
    )INVESTING ACTIVITIESEquipment
      acquisitions
    
    
    -
    
    
    
    (1,542
    )Net
      cash used in investing activities
    
    
    -
    
    
    
    (1,542
    )FINANCING ACTIVITIESRepayment on bank
      loan
    
    
    (5,766
    )
    
    
    -Settlement
      of notes payable to related parties
    
    
    -
    
    
    
    (50,000
    )Proceeds
      from related party
    
    
    -
    
    
    
    26,250Proceeds
      from officer loan and notes payable
    
    
    6,000
    
    
    
    10,000Payments
      on preferred stock dividends
    
    
    (24,192
    )
    
    
    (34,944
    )Proceeds
      from sale of common stock
    
    
    147,500
    
    
    
    145,000Net
      cash provided by (used in) financing activities
    
    
    123,542
    
    
    
    96,306INCREASE
      (DECREASE) IN CASH
    
    
    (141,575
    )
    
    
    (72,011
    )CASH
      AT BEGINNING OF PERIOD
    
    
    149,981
    
    
    
    221,992CASH
      AT END OF PERIOD
    
    $
    8,406
    
    
    $
    149,981SUPPLEMENTAL NON-CASH INVESTING
      AND FINANCING
      INFORMATION:Conversion
      of preferred stock into common stock
    
    $
    -
    
    
    $
    380Conversion
      of notes payable into common stock
    
    $
    -
    
    
    $
    5,000Conversion of bank
      line of credit into loan
    
    $
    180,000
    
    
    $
    -SUPPLEMENTAL
      INFORMATION:Cash paid for Taxes
    
    $
    -
    
    
    $
    -Cash paid for interest
    
    $
    11,913
    
    
    $
    23,477


The accompanying footnotes are an integral part of these financial statements 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, 2010 and 2009 included in this report include the activities
of St. Joseph, Inc. and its wholly-owned subsidiary, 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 capital deficiency at December 31, 2010
and 2009. 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, 2010
and 2009.





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


7


ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




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
      yearsOffice
      equipment
    5
      yearsComputer
      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, 2010 and 2009.





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 $1,237 and $3,592 for the years ended December
31, 2010 and 2009, respectively.





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, 2009 were not included in the diluted loss per share as all 5,708 preferred shares and all 385,000
options were anti-dilutive. Preferred stock and common stock options outstanding at December 31, 2010 were not
included in the diluted loss per share as all 5,708 preferred shares and all 460,000 options were anti-dilutive.
Therefore, basic and diluted losses per share at December 31, 2010 were equal.


8


ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





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 granted 75,000 options
during 2010. The fair value was calculated at approximately $0.01 per share or $750. No compensation expense has been
recorded as the amount was considered to be inconsequential during the years ended December 31, 2010.




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.





Recent Accounting
Pronouncements





On July 1, 2009, we adopted the Financial
Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC"). The ASC does not alter current generally
accepted accounting principles in the United States of America ("U.S. GAAP"), but rather integrated existing accounting
standards with other authoritative guidance. The ASC provides a single source of authoritative U.S. GAAP for
nongovernmental entities and supersedes all other previously issued non-SEC accounting and reporting guidance. The
adoption of the ASC did not have any effect on our results of operations or financial position. All prior references
to U.S. GAAP have been revised to conform to the ASC. Updates to the ASC are issued in the form of Accounting Standards
Updates ("ASU").




In April 2009, we adopted the revisions to U.S.
GAAP accounting standards included in ASC Topic 825, Financial Instruments   ("ASC 825"), which requires public companies
to include disclosures required for all financial instruments within the scope of ASC 825 in their interim financial
statements. In addition, this guidance requires disclosure about the method and significant assumptions to estimate fair
value of financial instruments and disclosure of changes in the methods or significant assumptions, if any, during the
period. The adoption of the revised guidance related to financial statement disclosure only and did not have any effect
on our results of operations or financial position.


9


ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





In January 2010, the FASB amended ASC 820 to
require new disclosures for fair value measurements and provides clarification for existing disclosures requirements.
More specifically, this update will require (a) an entity to disclose separately the amounts of significant transfers
in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers; and (b) information
about purchases, sales, issuances and settlements to be presented separately (i.e., present the activity on a gross basis
rather than net) in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs).
This update clarifies existing disclosure requirements for the level of disaggregation used for classes of assets and
liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure
fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs. ASU 2010-6 is
effective for interim and annual fiscal years beginning after December 15, 2009. The Company does not anticipate that
the adoption of this statement will materially expand its financial statement footnote disclosures.





In February 2010, the FASB issued authoritative
guidance which removes the requirement for an SEC filer to disclose a date through which subsequent events have been
evaluated in both issued and revised financial statements. This authoritative guidance became effective upon issuance.
The adoption of this guidance did not have an impact on the Company's 2010 Financial Statements.





NOTE 2 - RELATED PARTY
TRANSACTIONS





In September, 2009, COLEMC Investments, Ltd., a
Canadian company owned by Gerry McIlhargey, President and Director of the Company, advanced $5,000 for working capital
in exchange for a promissory note. The note matures on December 31, 2011 and does not bear any interest.





In November, 2009, COLEMC Investments, Ltd., a
Canadian company owned by Gerry McIlhargey, President and Director of the Company, advanced $5,000 for working capital
in exchange for a promissory note. The note matures on December 31, 2011 and does not bear any interest.





In October, 2010, COLEMC Investments, Ltd., a
Canadian company owned by Gerry McIlhargey, President and Director of the Company, advanced $6,000 for working capital
in exchange for a promissory note. The note matures on December 31, 2011 and does not bear any interest.  As of December
31, 2010 and 2009, the amounts due to the affiliate totaled $16,000, and $10,000, respectively.





On October 23, 2010, John Blackmon, President of
StafTek Services, Inc., purchased 10,000 shares of our common stock in a private placement for $0.50 per
share.





On January 5, 2009, COLEMC Investments, Ltd., a
Canadian company owned by Gerald McIlhargey, President and a Director of our Company, purchased 500,000 shares of our
common stock in a private placement for $0.05 per share. These shares are deemed to be beneficially owned by Mr.
McIlhargey.




On January 3, 2009, Desert Projects, Inc., a
10%+ shareholder of the Company, purchased 400,000 shares of our common stock in a private placement for $0.05 per
share. Desert Projects, Inc. is a Nevada corporation beneficially owned by James Ralph Houston.





On February 16, 2009, Hong Kong Base, Ltd.,
a 10%+ shareholder of the Company, purchased 500,000 shares of our common stock in a private placement for $0.05 per
share. Hong Kong Base, Ltd. is a Hong Kong company beneficially owned by Miss Yvonne Chun Siu Fun.





On December 4, 2009, Kenneth L. Johnson, a
Director of the Company, exercised 25,000 stock options by applying $26,250 in debt owed to him by the Company towards
payment of the exercise price.


10





ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS






NOTE 3 - PROPERTY AND
EQUIPMENT





Property
and equipment consisted of the following at December 31, 2010 and
2009:


2010
    
    
    2009Furniture
      and fixtures
    
    $
    35,447
    
    
    $
    35,447Office
      equipment
    
    
    61,465
    
    
    
    61,465Computer
      equipment
    
    
    37,629
    
    
    
    37,629Leasehold
      improvements
    
    
    19,585
    
    
    
    19,585Total
      property and equipment
    
    
    154,126
    
    
    
    154,126Less
      accumulated depreciation
    
    
    (151,904
    )
    
    
    (150,755
    )Property
      and equipment, net
    
    $
    2,222
    
    
    $
    3,371





Depreciation expense totaled $1,149 and $1,149,
respectively, for the years ended December 31, 2010 and 2009.


NOTE 4 - BANK LOAN





The Company had a $200,000 line of credit of
which $180,000 was unpaid and outstanding at December 31, 2009.  The interest rate on the credit line was
6.79 percent.





In August 2010, the Company converted the line
of credit to a bank loan which is collateralized by all of StafTek Services, Inc. assets, 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; and 3) an executed guaranty from St. Joseph, Inc.  The interest rate on the loan
is 6.5 percent and the monthly principal and interest payment is $2,698.  A final balloon payment is due on the maturity
date of August 31, 2013.  As of December 31, 2010, the bank loan agreement has not been executed and finalized by either
party.  Accordingly, the bank loan balance of $174,234 has been classified as a current liability on the accompanying
consolidated financial statements.  The Company continues to make the required payments according to the bank loan
agreement and is current on the note as of December 31, 2010.





The future maturity payments on the bank loan
are as follow:





|2011 |  | $ | 21,840 
|---- |  | - | -------
|2012 |  |   | 23,282 
|2013 |  |   | 129,112
|     |  | $ | 174,234




Interest expense on the bank loan and
line of credit were $11,913 and $12,829, during the years ended December 31, 2010 and 2009, respectively.





NOTE 5 - CONCENTRATION OF
CREDIT RISK





The Company conducts a significant portion of
its operations with one customer. During the year ended December 31, 2010, approximately 44 percent of the Company's
service revenues were conducted with this one customer. During the year ended December 31, 2009, approximately 45
percent of the Company's service revenues were conducted with one customer.





11


ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE 6 - INCOME
TAXES





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





Years
      EndedDecember 31,2010
    
    
    2009U.S.
      Federal statutory rate
    
    
    29.66
    %
    
    
    28.02
    %State
      income tax, net of federal benefit
    
    
    3.26
    %
    
    
    3.33
    %Permanent
      book-to-tax differences
    
    
    -0.00
    %
    
    
    -0.00
    %Timing
      Differences
    
    
    -0.00
    %
    
    
    -0.00
    %Net
      operating loss for which no tax benefit is currently
    available
    
    
    -32.92
    %
    
    
    -31.35
    %0.00
    %
    
    
    0.00
    %





At December 31, 2010, the Company's current tax
benefit consisted of a net tax asset of $375,094 due to operating loss carryforwards of approximately $1,422,546 which
was fully allowed for, in the valuation allowance of $375,094. 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, 2010 and 2009 were $84,256 and $57,707, respectively. Net operating loss
carry forwards will expire through 2030.





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 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 Section 382 of the Internal Revenue Code, the Company's tax net operating loss carry forwards generated prior
to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of those
losses.


NOTE 7 - SHAREHOLDERS'
EQUITY




Preferred
Stock





During the year ended December 31, 2010, the
Company did not issue any Series A Convertible 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, 2010.  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 making dividend payments
pursuant to the terms of a settlement agreement, as disclosed in an 8-K released on May 9, 2009.  During the year ended,
2010, the Company lowered the accrued balance of Series A Convertible Preferred Stock dividends by $24,192, and this
balance was $58,175 as of December 31, 2010.





12


ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





Common
Stock





During the year ended December 31, 2010, the
Company sold 335,000 shares of common stock to 8 accredited investors at a price of $0.50 per share for gross proceeds
of $167,500. 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 to 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 June 2010, the Company issued 15,000 shares
of common stock to Zachary Karo, a former employee of StafTek Services, Inc., as part of the settlement agreement
described in Note 8 - Legal Proceedings.  The shares were valued at $10,500 or $0.70 per share.





As of March 25, 2009, the Company sold 1,500,000
shares of common stock to 8 accredited investors at a price of $0.05 per share for gross proceeds of $75,000. 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 to 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 May 2009, the Company issued 100,000 shares of
common stock to an investor in exchange for settlement of a promissory note in the amount of $5,000.





During the year ended December 31, 2009, the
Company issued 380,500 shares of common stock upon conversion of 380,500 shares of Series A Convertible
Preferred Stock.





Equity Awards Granted to
Employees





On December 1, 2010, the Company granted
options to one employee to purchase 75,000 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 $0.55
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 and $.363 per share, respectively.  Stock option compensation totaling
$700 was not recognized as the amount was deemed to be immaterial.





The fair value for the options granted was
estimated at the date of grant using the Black-Scholes option-pricing model with the following:





Risk-free
      interest rate
    
    
    0.28
    %Dividend
      yield
    
    
    0.00
    %Volatility
      factor
    
    
    50.60
    %Weighted
      average expected life
    
    
    .75
      years


13


ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





The
following schedule summarizes the changes in the Company's equity awards for the
years ended December 31, 2010 and 2009.





Weighted
    
    
    WeightedAwards
    
    
    
    
    
    Average
    
    
    AverageOutstanding
    
    
    Exercise
    
    
    Exercise
    
    
    Remaining
    
    
    Aggregateand
    
    
    Price
    
    
    Price
    
    
    Contractual
    
    
    IntrinsicExercisable
    
    
    Per Share
    
    
    Per Share
    
    
    Life
    
    
    ValueOutstanding
      at January 1, 2009
    
    
    560,000
    
    
    $
    1.05
    
    
    $
    1.05Granted
    
    
    -
    
    
    $
    -
    
    
    $
    -Exercised
    
    
    (25,000
    )
    
    $
    -
    
    
    $
    -Cancelled/Expired
    
    
    (150,000
    )
    
    $
    1.05
    
    
    $
    1.05Outstanding
      at December 31, 2009
    
    
    385,000
    
    
    $
    1.05
      - $1.05
    
    
    $
    1.05Granted
    
    
    75,000
    
    
    $
    1.05
    
    
    $
    1.05Exercised
    
    
    -
    
    
    $
    -
    
    
    $
    -Cancelled/Expired
    
    
    -
    
    
    $
    -
    
    
    $
    -Outstanding
      at December 31, 2010
    
    
    460,000
    
    
    $
    1.05
    
    
    $
    1.05
    
    
    0.65
      years
    
    
    $
    -





All equity awards were fully vested as of December
31, 2010.  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, 2010, and then multiplying that amount by the number of options.  The
exercise price exceeds the market value of the stock on December 31, 2010; 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 - LEGAL
PROCEEDINGS





As previously disclosed in a quarterly report
on Form 10-QSB, filed with the SEC on November 20, 2006, on July 28, 2006, Zachary Karo, a former employee of StafTek
Services, Inc. filed a lawsuit against the Company and its subsidiary Staf*Tek Services, Inc. in the district court in
Tulsa County, Oklahoma, Case No. CJ 2006 04713, in connection with stock options allegedly granted to Mr. Karo. Mr. Karo
alleged that he was granted an option to purchase up to 25,000 shares of the Company's common stock at $0.10 per share
but that management refused to issue Mr. Karo such shares upon his attempt to exercise of the alleged option. In June
2010, Mr. Karo agreed to dismiss his lawsuit in consideration of a payment by the Company to Mr. Karo of $20,000 in cash
and the issuance to him of 15,000 shares of common stock, valued at $10,500 or $0.70 per share.





As disclosed in an 8-K released on May 9, 2009,
we settled a lawsuit between us and a former President, CEO and director, John H. Simmons by executing a settlement
agreement.  Pursuant to the settlement agreement, the Company and Mr. Simmons released all claims against each other.
The settlement agreement required the Company to pay Mr. Simmons a sum of $50,000.  In connection with the settlement,
the Company booked a one-time credit in the amount of $25,526 after applying the settlement amount of $50,000 to a note
payable of $48,120, accrued interest of $2,406 and amount of $25,000 for the cancellation of a note, which was due to Mr.
Simmons for the cancellation of 250,000 options which had been previously exercised.





14





ST.
JOSEPH, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





As disclosed in a 8-K released on May 9, 2009,
we settled a lawsuit against us by two holders of our Series A Preferred Convertible Stock (the "Preferred A"), Phyllis
Bell and Paul Aelmore, by entering into a settlement agreement dated effective May 9, 2009 and which was signed by the
Company May 5, 2009. The settlement agreement provides for us to pay the holders of the Preferred A an aggregate of $2,700
per month, retroactive to January 1, 2009, until the balance of Series A dividends owed to them of $117,312 is fully paid.
If we make all required payments, we will have paid down this balance in August 2012. Of the monthly amount to be paid to
the Preferred A holders, Ms. Bell is to receive $2,295 per month and Mr. Aelmore is to receive $176 per month.  Because
the monthly payments are retroactive to January 1, 2009, we made a one-time payment of $12,357 to Ms. Bell and Mr. Aelmore
to cover the period of January through May 2009. The monthly payments commenced on June 1, 2009.





NOTE 9 -
COMMITMENT





The
Company leases office space in Tulsa, Oklahoma under operating lease expiring in
2012.  Future minimum payments due under the non-cancelable lease are
as follows:


2011
    
    $
    32,3472012
    
    
    10,782$
    43,129


Rent expense during the years ended December
31, 2010 and 2009 were $35,758 and $35,094, respectively.








NOTE 10 - SUBSEQUENT
EVENT





On February 15, 2011, the Company sold 40,000
shares of common stock to accredited investor at a price of $0.50 per share for gross proceeds of $20,000. 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 to 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.
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 to 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.





15