U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.20549

                                   FORM 10-KSB
                                 Amendment No. 1

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the fiscal year ended December 31, 2002

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from _____________ to _____________

Commission file number: 0-49936

                             St. Joseph Energy, Inc.
                  ---------------------------------------------
                 (Name of small business issuer in its charter)


          Colorado                                              CH47-0844532
-------------------------------                             -----------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)


906 East 7th Street, Hastings, Nebraska                           68901
---------------------------------------                       ---------------
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number:      (402) 461-4957

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

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                         ----------------------------
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                Yes    |X|                        No     |_|

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |_|

Issuer's revenues for its most recent fiscal year: $0

Aggregate market value of voting stock held by non-affiliates of the issuer as
of:  12/31/02: $435,680

Number of shares of common stock, $.001 par value, outstanding on 12/31/02 was
2,748,920

DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format:  Yes   |_|      No   |X|
<PAGE>

                             St. Joseph Energy, Inc.

                                   FORM 10-KSB
                                TABLE OF CONTENTS

                                     PART I
                                                                            PAGE

ITEM 1.  DESCRIPTION OF BUSINESS                                              1

ITEM 2.  DESCRIPTION OF PROPERTY                                              7

ITEM 3.  LEGAL PROCEEDINGS                                                    7

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  7

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS             7

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OR PLAN OF OPERATIONS                                                7

ITEM 7.  FINANCIAL STATEMENTS                                                 9

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE                               9

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
         AND CONTROL PERSONS; COMPLIANCE WITH SECTION
         16(a) OF THE EXCHANGE ACT                                           10

ITEM 10. EXECUTIVE COMPENSATION                                              12

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
         OWNERS AND MANAGEMENT                                               12

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                      13

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                    14

ITEM 14.  CONTROLS AND PROCEDURES                                            14


                                       ii
<PAGE>

                                     PART I

Item 1.  DESCRIPTION OF BUSINESS

This report on Form 10-KSB contains forward-looking statements that involve
risks and uncertainties. St. Joseph Energy, Inc.'s actual results may differ
significantly from the results discussed in the forward-looking statements.

Forward-Looking Information-General

St. Joseph Energy, Inc. ("St. Joseph" or the "Company") cautions readers that
certain important factors (including without limitation those set forth in this
Form 10-KSB) may affect St. Joseph's actual results and could cause such results
to differ materially from any forward-looking statements that may be deemed to
have been made in this Form 10-KSB registration statements, or that are
otherwise made by or on behalf of St. Joseph. For this purpose, any statement
contained in the Registration Statement that are not statements of historical
fact, may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, words such as "may", "expect", "believe",
"anticipate", "intend", "could", "estimate", or "continue", or the negative
other variations therefor comparable terminology, are intended to identify
forward-looking statements.

Business
--------

(a) Business Development

St. Joseph Energy, Inc. ("St. Joseph" or the "Company") was organized as a
Colorado Corporation on March 19, 1999, as Pottery Connection, Inc. On March 19,
2001, St. Joseph changed its corporate name from Pottery Connection, Inc. to St.
Joseph Energy, Inc. in anticipation of changing its business purpose to the
exploration and development of oil and gas properties. However, after the
unsuccessful investment in two oil wells located in the State of Louisiana, St.
Joseph elected to abandon that endeavor and return to its original business
purpose.

St. Joseph conveyed its oil and gas working interests to a third party, a
shareholder of the Company, in exchange for debt, which was an "as is"
conveyance. St. Joseph has no reason to believe or has any knowledge of any
anticipated liability from any lingering environmental issue or other liability
from the oil and gas exploits in the State of Louisiana.

While St. Joseph has been in existence three (3) years and four (4) months, St.
Joseph is still considered a development stage company, since it has not, as
yet, generated any revenues.

(b) Business of St. Joseph

St. Joseph was originally organized to produce and sell pottery of all form, as
well as, publish and sell, on both a wholesale and retail basis; (i) limited
edition fine art lithographs, serigraphs, bas-reliefs, sculptures, aquatints and
etchings; (ii) oil and acrylic paintings and other original works of art; and
(iii) posters, and limited editions of other pottery artifacts. St. Joseph has
determined to establish itself in a niche market, by developing a gallery on the
Internet ("gallery

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<PAGE>

on the web"), which will be a web site to facilitate online retail sales.  St.
Joseph at this time does not own and proposes to not establish art galleries at
physical locations and all sales will take place through its web site.  St.
Joseph's has not generated any sales through its proposed web site, which is
currently under construction.  The domain name of, www.gallerysaintjoseph.com,
has been reserved by the Company.

The web site will provide the art consumer with a "one-step" shopping outlet.
St. Joseph's web site will permit unknown, but emerging artists an opportunity
to submit, show and sell their art to a worldwide market. St. Joseph's web site
will provide information and background about the artists. The dimensions,
color, medium and genre of art will be provided along with a digital photograph
of the artist's work. The size, color, medium and genre of art will have its own
category. We believe that these depictions will develop a useful commercial
source of art for designers and architects who need to know the dimensions and/
or color of certain art works for specific design applications. The web site
will include biographical information about each artist and his art.

St. Joseph will enter the industry of selling artwork, only on a consignment
basis, from artists and owners through its web site. Orders will be placed
through the web site which will set forth the purchase price of the artwork, and
the packaging, and the cost of ground transportation in the continental United
States. Payment will be made through www.paypal.com by way of credit card or
electronic check and disbursed to the artist at sixty (60%) and shipping and
handling, less the pro rata charges imposed by www.paypal.com.

St. Joseph will generate its revenues through consignment fees generated by the
sale of art that is sold through its web site. St Joseph is in the process of
entering into User Agreements with local artists for the sale of their art
through St. Joseph's proposed web site. St Joseph has entered into an exclusive
agreement with Mr. David Johnson, the president of the Company, to sell his
artwork through the St. Joseph web site. Mr. David Johnson will also be a
principal supplier of pottery, artwork and prints to the Company.

Marketing

St. Joseph's sales plan is based on the premise that there is a frustration with
the primary channels of purchasing art, since the industry is still primarily a
cottage industry. St. Joseph's strategy is to provide an outlet to unknown
artists, that do not have access to traditional outlets in which to market their
art and at the same time become known to art collectors and the public alike.

Mr. David Johnson, an artist and the President of St. Joseph, has consulted with
many of his peers in the art industry and has determined that there are a number
of artists who are not yet established and who have not created an individual
sales organization or a following of art collectors. This is the case, not only
in the United States, but worldwide. There are many artists who may be
recognized locally, but do not have access to nationwide, worldwide, or even
markets beyond their local area. The worldwide web site, which St. Joseph is in
the process of constructing, will provide this needed outlet.

The St. Joseph web site creates not only great opportunities, but also many
risks. There are low barriers of entry, which will encourage competitors to
replicate the Company's e-commerce web site. St. Joseph recognizes this
competition and proposes to preserve its web site identity by

                                        2

<PAGE>

offering non-technical benefits that are difficult to replicate by providing a
high level of service, since service that exceeds consumer expectations will
always be appreciated by the artist and the art collector alike.

St. Joseph proposes to market its web site through art magazines, such as
Ceramic News, American Art Journal, Artwork, International Journal of Art
Management and Print Quarterly, to mention a few. However, marketing efforts
will be at a minimal, until the Company generates sufficient cash flows to
justify an increased expenditure in this area. St. Joseph will send out
advertising material regarding their services to art colleges and art students,
describing the benefits of selling their art through St. Joseph's web site. Mr.
David Johnson also proposes to attend regional, state and local art exhibits
where he will distribute flyers describing St. Joseph's web site.

Competition

St. Joseph's Internet business will compete in a market that is highly
competitive and expects competition to intensify with a variety of entities,
both on the Internet and from small and large traditional galleries. There are
competitors that have already established a presence on the Internet and have
begun to establish a consumer base. These competitors have identified a large
number of artists, many of whom are already out in the industry, that use St.
Joseph's competitors' web sites. St. Joseph's Internet competitors include
Artselect, NextMonet, Barewalls, Guild.com, and others who may be entering the
field. There are also traditional competitors that include national galleries,
such as Deck the Walls and WentWorth Galleries as well as a variety of regional
and local galleries. All of these entities have been in business for a longer
period of time than St. Joseph, have greater financial reserves, have
established marketing relationships and have secured greater presence in
distribution channels. Many of these entities may also commence or expand their
presence on the Internet. St. Joseph is of the opinion that there are a number
of smaller enterprises that are focusing significant resources on developing web
sites to market and sell artwork on the Internet that will compete directly with
St. Joseph's web site.

Art Market Analysis

In the world of fine arts, the traditional means to buy and sell art has been
through art galleries, print shops and art publishing catalogs. The start on a
nontraditional path was to begin with the display art for sale in public places
such as restaurants, airports and libraries for potential purchasers. Only
recently have art dealers and art buyers discovered the Internet as a viable
marketing tool. The Internet has been characterized as a phenomenon that has
rapidly changed traditional business strategies and marketing methods.(1)
Organizations use the Internet for a variety of marketing purposes, such as
communicating with customers, selling products and services, disseminating
information and providing a network function.(2) Business use of the Internet
will continue to grow, as 77 percent of 250 Internet and e-business executives,
surveyed in 2001 by Internet-week, said their companies' Internet spending would
increase by 40 percent in 2001.(3) Furthermore, consumer usage of the Internet
is increasing as a number of active Internet users will rise to 640.2 million,
or 14 percent of the world's population, by 2004.(4) According to the online
retailers association, shoppers spent $51.3 billion online in 2001, up 21
percent from the year before. In 2002, consumer spending was expected to
increase 41 percent to $72.1 billion.

                                        3
<PAGE>

To date, fine art dealers establishing themselves with a virtual presence, have
been modest and technology driven.(5)(6) Recent changes have made here-to-fore
unaffordable technologies available at reasonable prices (digital photography,
broadband access, Web-page software, etc.). However, advances in personal
computers, fiber links and improved multi-casting protocols have placed these
technologies well within an affordable cost structure, making the Internet more
accessible for fine art marketing. Museums and galleries are repositioning
themselves on the Internet.(7) Today, there are more than 20,000 sites
showcasing art online.(8) Consumers, dealers and artists are beginning to make
markets through this enhanced new marketing tool.

David Cousin, founder of Cousin & Co., an American consultant, who is devoted to
the economics of art, estimates the annual value of the global art and
antiquities business at up to $17 billion with continuing strong growth.

There are basically three distinct business segments, which have emerged in the
professional fine arts market: artists, interior designers and organizational
buyers.(9) Each possesses a special interest in the nature of fine art marketing
as the marketing needs of each group may differ from traditional end- user
consumers.(10) Online fine art markets evolve as artists and buyers find
mutually acceptable domains for the marketing artwork. Therefore, a long-term
success of art marketers is likely to remain partially dependent upon
understanding of the online needs of each major segment. Certain needs of these
divergent groups may challenge marketers, since online fine art marketing
research has, thus far, been oriented towards an end-user consumer market.

Artists

The growth in online galleries has the potential to reshape the manner in which
artists reach consumers. Artists may find new opportunities in Internet-based
markets. Approximately 82 percent of artists have been approached about putting
art on the Internet and 42 percent planned eventually to sell on the
Internet.(11) At this stage of the e-commerce industry, artists may stand to win
the most, if he or she can find suitable on-line venues, he or she could reach
millions of people and spend little or no money to do so.(12) Even with these
potential benefits, some artists are still suspicious of the Internet as a
business medium.

Interior Designers

There has been a significant growth in the number of Web sites devoted to
selling fine art within the past two to three years. The current segmentation
and targeting approaches; however, are much less clear. For example there are
over 60,000 professional interior designers in USA, accounting for about 12-16
percent of art sales, making them a meaningful market segment of fine art
dealers. Interior designers are repeat buyers, require broader array of
selection and have strong technical skills. Typically, they represent
commercial, residential or organizational art consumers who looked to their
professionalism to simplify and complement the buying process. The interior
designers often incorporate the purchase of new art into a larger design
project; making time and selection key elements in the profitability of the
overall project. The unique intermediary buyer behavior associated with interior
designers makes them attractive, yet matchless purchasers of fine art. As
buyers, and sometimes resellers of fine art, they are a distinctive group that
brings buyer and seller together, but research into this specific fine art
buying segment, relative to Internet marketing, is incomplete.

                                        4

<PAGE>

Organizational Buyers

Companies such as Citigroup, Itochu, Mitsubishi, Royal Dutch/Shell, Sumitomo and
many others, consider art an important aspect of their business operations and
devote considerable resources to the accumulation of fine art works for their
organizations. Thus, these organizations designate people to have the
responsibility for buying and building these corporate art collections.
Organizational buyers also account for a disproportionate volume of the overall
art market through high-priced purchases.(13) These buyers are employed by
institutions with the sole dedicated responsibility of finding and securing art
works that will enhance the value of the organization. This group often
purchases art in either high-volume (i.e. hotel chains or bank branches) or
high-quality (i.e. Institutional collectors or investors). Organizational buyers
are also repeat buyers with extensive training in the appraisal of artwork. They
spend immoderate amounts of time seeking purchase value. As the buying
representative for larger organizations, information and market knowledge become
keys to success. This unrivaled market segment may find significant merit and
informational advantages of the Internet, yet little is known about the Internet
purchase patterns of this segment of the fine art market.

It is generally accepted that artists are a notoriously eclectic group, and very
often either unaware or indifferent regarding business principles or practices
in their respective fields; however, they are always searching for fiscal
sustainability and financial gain. Interior designers and organizational buyers
are a small group representing a large number of potential art purchasers and
possess repeat purchase behavior, which are all enchanting characteristics for
the Internet market segment.

St. Joseph's objective and business strategy is to (1) seek out artists who are
interested in using the internet as a means of selling their artwork and the
value of their artwork is effective towards generating profitability for the
Company and; (2) market its web site to the desired business segments such as
interior designers and organizational buyers.

REFERENCES

1.  Hoffman, D. L., Novak, T. P. (1996) `Marketing in hypermedia computer-
    mediated environments: conceptual foundations', Journal of Marketing, July,
    No. 60, pp. 50-68.
2.  Hofacker, C. E (2001) `Internet marketing', 3rd edn, John Wiley & Sons, New
    York.
3.  Violino, B. (2001) 'E-biz spending still soaring', [1 screen], Internet
    Week. Available from: http://www.internetweek.com/newslead0l/leadO11901.htm.
    Accessed 9th May 2001.
4.  Enos, L. (2000) `Report: b2b still driving e-commerce', [1 screen],
    E-Commerce Times. Available from:
    http://www.ecommercetimes.com/perl/story/5961.html. Accessed 2nd February
    2001.
5.  Bamberger, A. (2000) `Art websites that work', [1 screen]. Available from:
    http://www.artbusiness.com/art.htm. Accessed 14th October 2000.
6.  Plotnikoff, D. (1999) `Buying fine art on the web is a work in the making',
    [1 screen]. Available from: http://www. freep.com/tech/qtchg2l.htm. Accessed
    29th August 1999.
7.  Taylor, J. H" Ryan, J. (1995) `Museums and galleries on the internet',
    Internet Research: Electronic Networking Applications and Policy, Vol. 25,
    No. 1, pp. 80-88.
8.  Sullivan, M. (2000) `Will the web emancipate artists from their bondage to
    dealers?' Forbes, May 22, p. 36.
9.  Clarke, L, Flaherty, T. B. (2000) `Marketing free art on the internet', in
    Wilson, J. W, (ed.) `Marketing in the Century Ahead. Proceedings of the
    Atlantic Marketing Association', 11-14th October, Charleston, South
    Carolina, p. 61-68.
10. Irvine Clarke III and Theresa B. Flaherty
11. Maher, C. (1999) `New technology for artists at Comdex', [1 screen].
    Available from: http://www lx.com/advisor/ maher27.htm. Accessed 29th July
    1999.
12. Feliciano, K. (1995) `Virtual galleries, real opportunities', American
    Artist, Oct, p. 62.
13. `Finance and economics: the colour of money', The Economist, Oct 9, p. 94.

                                        5
<PAGE>

Exploration and Development Expenditures

St. Joseph, formerly known as "Pottery Connection, Inc.", entered into a
Memorandum Agreement with LDC Operating, Inc. ("LDC") regarding the Lyons Leases
in the South Thornwell field of Jefferson Davis Parish, Louisiana and Red River
Parish, Louisiana on November 2, 2000. LDC represented to St. Joseph that it
owned 100% of the working interest, with a landowner royalty of 25%, in the
Lyons leases comprising approximately 1,088 surface acres in the South Thornwell
field. LDC also represented that it owned 100% of the working interest in the
Red River Bull Bayou leases comprising of approximately 7,000 acres, with a
landowner royalty of 25%, and that there were no outstanding liens or
encumbrances on the property.

Additionally, LDC represented that it was actively at work on the Mesa Lyons #1
Well to attempt to re-complete the well in the Camerina Sands from greater than
12,000 feet.

LDC required immediate funds in the sum of $200,000 to finish the re-completion
of the Mesa Lyons #1 Well.

St. Joseph agreed to provide $200,000 to complete the re-completion of the Mesa
Lyons #1 Well. In consideration for the $200,000, LDC agreed to assign a 30%
working interest in the entire lease of the South Thornwell field to St. Joseph.
LDC further agreed to assign 100% of the working interest in the entire lease of
the 7,000 surface acres in the Red River Bull Bayou field in the Red River
Parish, Louisiana. In addition, LDC agreed to preferential payments equal to the
partners, which are non-consent on the Lyons #1 Well until such time as the
$200,000 was repaid to St. Joseph.

St. Joseph borrowed the $200,000 from an individual, Mr. Clark Addison, by
virtue of an unsecured promissory note dated November 2, 2000. The unsecured
note was for a period of one year, at an interest rate of 10% per annum. Mr.
Clark Addison forgave this unsecured note plus interest, when St. Joseph
conveyed to him all of its rights, title and interest in the working interest in
the Louisiana oil and gas wells.

St. Joseph infused $200,000 into the oil and gas wells from the proceeds of an
unsecured promissory note entered into with Mr. Clark Addison, a shareholder of
the Company, and an additional $135,000 from the proceeds received through
Subscription Agreements pursuant to Section 4(2) of the Securities Act of 1933,
as amended. St. Joseph raised $25,365 through a Private Placement Memorandum
pursuant to Sections 3(b), and 4(2) of the Securities Act of 1933 and Rule 504
of Regulation D, promulgated under the Securities Act of 1933, as amended and an
additional $150,000 from three individuals pursuant to Section 4(2) of the
Securities Act of 1933, as amended. Thus, apart from the $200,000 that was
applied to the oil and gas wells, St. Joseph applied an additional $135,000 from
its two offerings bringing to a total of $335,000 that was infused into the
Louisiana project.

Employees
---------

St. Joseph currently has no employees and does not contemplate hiring any
employees until management believes it is necessary.

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<PAGE>

Patents and Trademarks
----------------------

St. Joseph does not own, either legally or beneficially, any patent or
trademark.

Item 2.  DESCRIPTION OF PROPERTY

St. Joseph presently owns no properties. Mr. David Johnson, an officer and
director of St. Joseph, provides office space and telephone at no cost to St.
Joseph.

Item 3.  LEGAL PROCEEDINGS

There are no lawsuits filed against St. Joseph or pending as of December 31,
2002.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted during the fourth quarter of the fiscal year
ended December 31, 2002 covered by this report to a vote of security holders,
through the solicitation of proxies or otherwise.


                                     PART II

Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no public trading market for St. Joseph's Common Stock. The Company has
engaged a broker/dealer, Burt Martin Arnold Securities, to file with the
National Association of Securities Dealers, Inc. (NASD) to have its Common Stock
traded in the Pink Sheets and the OTC Bulletin Board(R) (OTCBB) upon
satisfaction of all disclosure and regulatory requirements, which include, among
other things, completion of the review process with applicable regulatory
agencies and amendment of prior Securities Exchange Act of 1934 filings as
necessary. The Company's stock will not be eligible to trade until all such
requirements are met, and no assurance can be given that such application will
be approved, and if approved, that an active trading market for the Common Stock
will materialize or be maintained.

There are no outstanding options or warrants to purchase, or securities
convertible into, shares of Common Stock.

As of the date hereof, there are 2,748,920 shares of Common stock that could be
sold pursuant to Rule 144 under the Securities Act of 1933, as amended, and St.
Joseph has not agreed to register any shares of Common Stock under the
Securities Act of 1933, as amended, for sale by security holders. None of the
holders of St. Joseph's common shares have any right to require St. Joseph to
register its common shares pursuant to the Securities Act of 1933, as amended.

Stockholders - As of the date of this registration statement, there are 105
stockholders of record of St. Joseph's Common Stock.

Dividends - St. Joseph has not declared any cash dividends since inception.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion and analysis of the financial condition and results of
operations should be read in conjunction with the Consolidated Financial
Statements and Notes thereto appearing elsewhere in this Form 10-KSB. As
described elsewhere in this Form 10-KSB, St. Joseph is a

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<PAGE>

development stage company.  As of the date of this Annual Report, St. Joseph
had the following projects under various degrees development.

RESULTS OF OPERATION.

The Company was originally organized to produce and sell pottery in all forms,
as well as publish and sell other types of artwork including lithographs,
sculptures and paintings. However, in 2000, the Company invested $335,000 in two
oil and gas properties through an agreement with LDC Operating, Inc., an
unrelated third party, who owned the working interests in the properties. The
Company borrowed $200,000 from an individual and used a portion of the proceeds
from its stock offering to make the investment. In August 2001, the Company
assigned all of its rights in the properties to the lender in satisfaction of
the $200,000 debt and wrote-off the remaining investment as a total loss. The
loss on the investment, which was charged to operations, totaled $119,500.
Thereafter, the Company returned to its original business plan.

St. Joseph does not expect any significant changes in the number of its
employees within the next 12 months.

Revenues

As of the year ended December 31, 2002, St. Joseph did not generate any revenues
as compared to generating no revenues for the year ended December 31, 2001.

St. Joseph incurred a decrease of approximately 70% in total operating expenses
for the year ended December 31, 2002, as compared to the year ended December 31,
2001. Total operating expenses were $43,341 and $140,161, respectively. The
substantial decrease in total operating expenses was due to the write-off of an
investment loss in 2001, of a failed effort in the rework of two oil and gas
wells in the State of Louisiana and St. Joseph incurred no substantial expenses
in 2002, other than professional fees of $36,900.

Operating Loss

As of the year ended December 31, 2002, St. Joseph incurred a net loss before
income taxes of $43,341 as compared to a net loss before income taxes of
$152,328 for the year ended December 31, 2001. This represents a decrease in net
operating losses of approximately 72%. The substantial decrease in the net loss
was a result of St. Joseph incurring no substantial operating expenses other
than the costs related to professional fees.

As at December 31, 2002, St. Joseph had accounts payable of $29,500, related to
professional fees incurred for the preparation of its Private Placement
Memorandum.

St. Joseph has an accumulated deficit from March 19, 1999 (date of inception) to
December 31, 2002 of $215,635. Additionally, for the year ended December 31,
2002, St. Joseph's had a total shareholders' equity of $11,385.

Income Taxes

At December 31, 2002, the Company's current tax benefit consisted of a net tax
asset of $56,821, due to operating loss carryforwards of $206,635, which was
fully allowed for, in the valuation

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<PAGE>

allowance of $56,821. 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, 2002 and 2001 were $7,752 and $45,956, respectively. Net operating loss
carryforwards will expire through 2022.

Liquidity and Financial Resources

St. Joseph had negative working capital of $22,706 at December 31, 2002,
compared to working capital of $2,830 at December 31, 2001. For the fiscal year
ended December 31, 2002, negative cash used in operating activities was $7,836,
as compared to negative cash of $16,362 for the fiscal year ended December 31,
2001. For the fiscal year ended December 31, 2002, there was no cash used in
investing activities as compared to using negative cash of $5,435 for the fiscal
year ended December 31, 2001. For the fiscal year ended December 31, 2002,
financing activities provided $11,800 as compared to no cash for the year ended
December 31, 2001. Net cash increased by $3,964 for the fiscal year ended
December 31, 2002 as compared to a decrease of $21,797 for the fiscal year ended
December 31, 2001.

For the fiscal years ended December 31, 2000, through December 31, 2002, St.
Joseph raised $161,800 through the issuance of 647,200 shares of its $.001 par
value common stock, as follows:

During November and December of 2000, St. Joseph sold an additional 600,000
shares of its common stock for $.25 per share pursuant to the exemptions
afforded by Section 4(2) of the Securities Act of 1933, as amended. St. Joseph
received gross proceeds of $150,000.

During June 2002, St. Joseph sold an additional 40,000 shares of its common
stock for $.25 per share pursuant to the exemptions afforded by Section 4(2) of
the Securities Act of 1933, as amended. St. Joseph received gross proceeds of
$10,000.

In addition, during September, 2002, St. Joseph sold an additional 7,200 shares
of its common stock for $.25 per share, pursuant to the exemptions afforded by
Section 4(2) of the Securities Act of 1933, as amended. St. Joseph received
gross proceeds of $1,800.

For the next 12 months, St. Joseph proposes to satisfy its cash requirements by
the generation of revenues through earned commissions. Additionally, St. Joseph
proposes to raise capital through the issuance of up to $50,000 of its $0.001
par value common stock by virtue of a private placement. St. Joseph my also
explore the potential of a public offering.

Item 7.  FINANCIAL STATEMENTS

See Index to Financial Statements on page F-1.

Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

St. Joseph has had no changes in or disagreements with its accountants since its
inception on March 19, 1999, through December 31, 2002.


                                        9
<PAGE>

                                    PART III

Item 9.  DIRECTORS, EXECUTIVE OFFIECRS, PROMOTERS AND CONTOL PERSONS; COMPLIANCE
         WITH SECTION 16(a) OF THE EXCHANGE ACT.

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

Directors and Officers

The Directors and Officers of St. Joseph are as follows:

Name                            Age       Position
----                            ---       --------

Dave O. Johnson(1)              24        Director, President
Kenneth L. Johnson(1)(2)        43        Director Secretary/Treasurer
Timothy Jon Walz                42        Director
Randal C. Gahm                  43        Director
Greg Andersen                   39        Director

(1) These persons may be deemed "promoters" of St. Joseph as that term is
    defined as any person who, acting alone or in conjunction with one or more
    other persons, directly or indirectly takes initiative in founding and
    organizing the business or enterprise of an issuer; pursuant to Regulation
    S-X of the Securities Act of 1933, as amended.
(2) Mr. Kenneth L. Johnson is the uncle of David O. Johnson

All Directors of St. Joseph will hold office until the next annual meeting of
shareholders of St. Joseph or until their successors are duly elected and
qualified.

The Officers of St. Joseph are elected by the Board of Directors at the first
meeting after each annual meeting of St. Joseph's shareholders, and hold office
until their death, or until they shall resign or have been removed. Officers and
Directors

DAVID O. JOHNSON-DIRECTOR/PRESIDENT.  Mr. Johnson has been a Director and
President of St. Joseph since the inception of the company.  Mr. Johnson has
created art and has displayed his work at numerous art shows in the local area
and continues to participate in art shows.  Mr. Johnson graduated from Hastings
College in Hastings, Nebraska in May of 2001 with a Bachelor of Arts Degree in
Studio Art and a Minor in Art History.  Mr. Johnson graduated with distinction
and was the recipient of the distinguished William Hicks Art Scholarship to
study in Paris, France.  Mr. Johnson was also awarded a Brigade Coin, one of the
highest honors the military awards during training, for his creativity in
designing and painting a mural representing a his company's mascot.  Mr. Johnson
is a member of the United States Army Reserve.

                                       10
<PAGE>

KENNETH L. JOHNSON-DIRECTOR/SECRETARY/TREASURER.  Mr. Johnson has been a
Director and Secretary/Treasurer since April 5, 2000.  Mr. Johnson has been
employed with the Nebraska Book Company in Lincoln, Nebraska as its Customer
Service Representative since 1997.  From 1993 to 1997, Mr. Johnson was the Vice
President of Founders Book Stores in Bennet, Nebraska.  Mr. Johnson graduated
from Hastings College in Hastings, Nebraska with a Bachelor of Arts in Business
Administration in 1985.

TIMOTHY JON WALZ-DIRECTOR.  Mr. Walz has been a Director since September 21,
2002.  Mr. Walz worked as a free lance photographer with Videogrophor for a
period of six years.  Before that engagement, Mr. Walz worked at KOLN and KGIN,
T.V. stations for a period of four years.  Mr. Walz worked two and one-half
years for Schranek's Video Production as the Production Manager and was
responsible for video taping an assortment of events such as football games,
weddings, etc.  Mr. Walz graduated from Hastings Community College in 1985
located in Hastings, Nebraska.

RANDAL C. GAHM-DIRECTOR.  Mr. Gahm has been a Director since September 21, 2002.
Mr. Gahm from January of 1997 to the present has been employed as a Senior
System Specialist, by the Nebraska Book Company in Lincoln, Nebraska, which owns
and operates over 100 college text book stores across the U.S.  Mr. Gahm is
responsible for all of the technical work needed to open the book stores, which
involves cabling, setting up the servers, and then configuring all of the
workstations, cash registers, and printers to work on the network and then to
provide any additional technical phone support.  From March 1986 to January
1997, Mr. Gahm was employed by Wal-Mart as a department manager in sporting
goods, pets, automotive, hardware and paints.  In 1995, Mr. Gahm received a
Diploma from Lincoln School of Commerce in Tour and Travel and in 1996, he
received a Diploma from Lincoln School of Commerce in Technical Computer
Services.

GREG ANDERSEN-DIRECTOR.  Mr. Andersen has been a Director since September 21,
2002.  Mr. Andersen is currently self employed in the custom framing business.
From November 2000 to June 2002, Mr. Andersen owned and managed a small Lincoln,
Nebraska business called 6 Red Custom Framing & Sports Art, Inc.  From December
of 1992 to November 2000, Mr. Andersen was employed by Nebraska Bookstore where
he supervised the Custom Framing Department.  In 1991, Mr. Andersen received a
Master of Arts in History from the University of Nebraska-Lincoln and in 1985,
Mr. Andersen received a Bachelor of Arts in History from the University of New
Mexico.

No executive compensation is contemplated as salaries.  However, executives will
be compensated at normal industry rates for specific services preformed for St.
Joseph.  However, St. Joseph does not contemplate any specific services that
will be rendered by its officers and directors and thus, there is no written
agreement.

Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section
16(a) of the Securities Exchange Act of 1934 requires our Company's officers and
directors, and persons who own more than 10% of a registered class of our
Company's equity securities, to file reports of ownership and changes in
ownership with respect to the securities of our Company with the SEC and to
furnish copies of these reports to our Company. St. Joseph believes that during
fiscal year 2002, none of its officers and Directors have filed the required
forms. The required filings inadvertently were not filed but will be filed as
soon as possible.

                                       11

<PAGE>

St. Joseph is still in the development stage and has not, as yet, generated any
revenues and therefore has not yet established an audit, compensation, or
executive committee.

Promoters

A Promoter, as defined in Regulation S-X of the Securities and Exchange Act of
1933, as amended, may be:

1. Any person who, acting alone or in conjunction with one or more other
persons, directly or indirectly takes initiative in founding and organizing the
business or enterprise of an issuer;

2. Any person who, in connection with the founding and organizing of the
business or enterprise of an issuer, directly or indirectly receives in
consideration of services or property, or both services and property, 10 percent
or more of any class of securities of the issuer or 10 percent or more of the
proceeds from the sale of any class of securities. However, a person who
receives such securities or proceeds either solely as underwriting commissions
or solely in consideration of property shall not be deemed a promoter within the
meaning of this paragraph if such person does not otherwise take part in
founding and organizing the enterprise.

In contemplating the above definition of Promoters, the Company believes that it
does not have any promoters other than the directors or officers of St. Joseph.

Control Persons

Other than the directors or officers of St. Joseph, which are considered control
persons of St. Joseph, there are no persons holding greater than 20% of the
issued and outstanding shares of St. Joseph.

Item 10.  EXECUTIVE COMPENSATION.

St. Joseph as of the fiscal year ended December 31, 2000, did not compensate any
of its Officers or Directors for their services. However, St. Joseph may, during
the course of the current year, decide to compensate its Officers for their
services and to compensate its Directors for serving on St. Joseph's Board of
Directors.

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of the date hereof, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (i) each person known by the Company
to own beneficially 5% or more of the Common Stock, (ii) each director and
officer of the Company and (iii) all directors and officers as a group:


                   Name and Address         Amount of Beneficial   Percentage
Title of Class    of Beneficial Owner           Ownership (1)       of Class
--------------    -------------------       --------------------   ----------

Common Stock      Dave Johnson                   800,000             29.19%
                  906 E. 7th Street
                  Hastings, Nebraska 68901

                                       12

<PAGE>

                   Name and Address         Amount of Beneficial   Percentage
Title of Class    of Beneficial Owner           Ownership (1)       of Class
--------------    -------------------       --------------------   ----------

Common Stock      Kenneth L. Johnson             200,000              7.30%
                  4335 South Street
                  Lincoln, Nebraska 68506

Common Stock      Frank H. Rodriguez             250,200              9.13%
                  555 E. 10th Ave, #105
                  Denver, Colorado 80203

Common Stock      Frank Davis                    250,000              9.12%
                  4903 36th St.
                  Columbus, NE 68601

Common Stock      Mark Johnson                   250,000              9.12%
                  14924 Mandeson Plaza,
                  Suite 303
                  Omaha, NE 68116

Common Stock      Tom Johnson                    250,000              9.12%
                  8914 Starlamp Lane
                  Huston, TX 77095

Common Stock      Lisa Allison                   200,000              7.30%
                  1516 Dahlia Court
                  PFlugerville, TX  78660

Common Stock      Clark Addison                  200,000              7.30%
                  113 Carter Lake Club
                  Carter Lake, Iowa 51510

                  Officers and Directors
                  and 5% shareholders as
                  a group (8 in number)        2,400,200             87.56%
-------------     -----------------------      ---------            --------
[1]  Unless otherwise indicated, this column reflects amounts as to which the
     beneficial owner has sole voting power and sole investment power.
[2]  No security holder listed above owns any warrants, options or rights.
[3]  Frank H. Rodriguez, a shareholder of the Company, is the brother of Raul
     N. Rodriguez, counsel for the Company.
[4]  David Johnson, a director, officer and shareholder of the Company, Tom
     Johnson, a shareholder of the Company and Mark Johnson, a shareholder of
     the Company, are brothers. Kenneth L. Johnson, a director, officer and
     shareholder of the Company, is the uncle of David Johnson, Tom Johnson and
     Mark Johnson.

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None of the Directors or Officers of St. Joseph, nor any proposed nominee for
election as a Director of St. Joseph, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 10% of the voting rights
attached to all outstanding shares of St. Joseph, nor any promoter of St.
Joseph, nor any relative or spouse of any of the foregoing persons has any
material interest, direct or indirect, in any transaction since the date of St.
Joseph's incorporation or in any presently proposed transaction which, in either
case, has or will materially affect St. Joseph. St. Joseph has not entered into
transactions with any member of the immediate families of the foregoing persons,
nor is any such transaction proposed.

Frank H. Rodriguez, a shareholder of the Company, is the brother of Raul N.
Rodriguez, Esq., counsel for the Company.  Raul N. Rodriguez, Esq. has received
$2,500 for legal work on behalf of the Company.  While there is no written
Retainer Agreement, Raul N. Rodriguez is to receive an additional $27,500 for


                                       13
<PAGE>

legal fees.  These legal fees will be paid out of future revenues of the
Company.

Item 13.  EXHIBITS AND REPORTS ON FROM 8-K


Exhibit No.                  Description of Document
-----------                  -----------------------

 3(i)       Articles of Incorporation of Pottery Connection, Inc. *

 3(ii)      Amended Articles of Incorporation (Name change to St. Joseph Energy,
            Inc.)*

 3(iii)     Bylaws of Pottery Connection, Inc.*

 3(iv)      Amended Articles of Incorporation (Name change to St. Joseph, Inc.)
            *

 4.0        Specimen form of Registrant's common stock *

 10.1       Exclusive Agreement between David Johnson-St. Joseph Energy, Inc. *

 10.2       St. Joseph Energy, Inc. User Agreement *

 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

----------
* Incorporated by reference to a previously filed exhibit or report.


There were no reports filed on Form 8-K

Item 14.  CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls & Procedures.

The Company maintains disclosure controls and procedures designed to ensure that
it is able to collect the information it is required to disclose in the reports
it files with the Securities and Exchange Commission (SEC), and to process,
summarize and disclose this information within the time periods specified in the
rules of the SEC. Based on an evaluation of the Company's disclosure controls
and procedures as of the end of the period covered by this report conducted by
the Company's management, with the participation of the Principal Executive and
Principal Financial Officers, the Principal Executive and Principal Financial
Officers believe that these controls and procedures are effective to ensure that
the Company is able to collect, process, and disclose the information it is
required to disclose in the reports it files with the SEC within the required
time periods.

(b) Changes in Internal Control over Financial Reporting.

During the period covered by this report, there have been no changes in the
Company's internal control over financial reporting that have materially
affected or are reasonably likely to materially affect the Company's internal
control over financial reporting.

                                       14

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Company has caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated:  January 4, 2005.
St. Joseph, Inc.


/s/John S. Simmons
---------------------------
John H. Simmons, President
and Chief Executive Officer


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

Signature and Title                  Date


/s/John H. Simmons                   January 4, 2005
---------------------------
John H. Simmons, President,
Chief Executive Officer and
Director

/s/Kenneth L. Johnson                January 4, 2005
--------------------------------
Kenneth L. Johnson,
Secretary-Treasurer and Director

/s/Jerry Malone                      January 4, 2005
----------------------
Jerry Malone, Director

/s/Kimberly A. Samon                 January 4, 2005
---------------------------
Kimberly A. Samon, Director

/s/Milton Harbuck                    January 4, 2005
------------------------
Milton Harbuck, Director

/s/Bruce Schreiner                   January 4, 2005
-------------------------
Bruce Schriener, Director

/s/ Gerald McIlhargey                January 4, 2005
--------------------------
Gerald McIlhargey


                                       15

<PAGE>

                             ST. JOSEPH ENERGY, INC.
                        (A Development Stage Enterprise)

                          AUDITED FINANCIAL STATEMENTS
                                      with
                      INDEPENDENT AUDITORS' REPORT THEREON



                                       16

<PAGE>

                            ST. JOSEPH ENERGY, INC.
                         (A Development Stage Company)
                         Index to Financial Statements

                                                                           Page
                                                                           -----

Report of Independent Auditors ............................................F-2

Balance Sheet at December 31, 2002 ........................................F-3

Statements of Operations for the years ended December 31, 2002 and 2001
     and March 19, 1999 (inception) through December 31, 2002 .............F-4

Statement of Changes in Shareholders' Equity for the period from
     March 19, 1999 (inception) through December 31, 2002 .................F-5

Statements of Cash Flows for the years ended December 31, 2002 and 2001
     and March 19, 1999 (inception) through December 31, 2002 .............F-7

Notes to Financial Statements .............................................F-8


                                      F-1
<PAGE>


                         Report of Independent Auditors


To the Board of Directors and Shareholders
St. Joseph Energy, Inc.


We have audited the balance sheet of St. Joseph Energy, Inc. (a development
stage company) as of December 31, 2002, and the related statements of
operations, changes in shareholders' equity, and cash flows for the years ended
December 31, 2002 and 2001, and from March 19, 1999 (inception) through December
31, 2002. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of St. Joseph Energy, Inc. as of
December 31, 2002, and the related statements of operations, changes in
shareholders' equity, and cash flows for the years ended December 31, 2002 and
2001, and from March 19, 1999 (inception) through December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has suffered significant operating losses since
inception. This factor raises substantial doubt about the Company's ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



Cordovano and Harvey, P.C.
Denver, Colorado
February 14, 2003

                                       F-2

<PAGE>

                            ST. JOSEPH ENERGY, INC.
                         (A Development Stage Company)
                                 Balance Sheet

                                December 31, 2002

<TABLE>
<CAPTION>
<S>                                                                   <C>
                                     Assets
Current assets:
    Cash ..........................................................   $         5,726
    Inventory, at cost ............................................             1,068
                                                                      ---------------
                  Total current assets ............................             6,794

Property and equipment, net (Note 3) ..............................             4,591
                                                                      ---------------

                                                                      $        11,385
                                                                      ===============

                      Liabilities and Shareholders' Equity

Current liabilities:
    Accounts payable and accrued liabilities ......................   $        29,500
                                                                      ---------------
                  Total current liabilities .......................            29,500
                                                                      ---------------

Shareholders' equity (Note 5):
    Preferred stock, $.001 par value; 25,000,000 shares authorized,
       -0- shares issued and outstanding ..........................                --
    Common stock, $.001 par value; 100,000,000 shares authorized,
       2,748,920 shares issued and outstanding ....................             2,749
    Additional paid-in capital ....................................           194,771
    Deficit accumulated during development stage ..................          (215,635)
                                                                      ---------------

                  Total shareholders' equity ......................           (18,115)
                                                                      ---------------

                                                                      $        11,385
                                                                      ===============
</TABLE>

                 The accompanying notes to financial statements

                                      F-3
<PAGE>


                            ST. JOSEPH ENERGY, INC.
                         (A Development Stage Company)
                            Statements of Operations

<TABLE>
<CAPTION>
                                                       Years Ended Through              March 19,
                                                 December 31,        December 31,        1999
                                               ----------------------------------     (Inception)
                                                      2002               2001            2002
                                               ---------------    ---------------    ---------------
<S>                                            <C>                <C>                <C>
Operating expenses:
    Professional fees ......................   $        36,900    $         5,500    $        48,451
    Investment loss (Note 1) ...............                --            119,500            119,500
    Contributed rent (Note 2) ..............             2,400              2,400              9,000
    Compensation ...........................                --                 58              1,358
    Office and shop supplies ...............               395                869              2,840
    Depreciation ...........................             3,605              2,967              9,772
    Other ..................................                41              8,867              9,214
                                               ---------------    ---------------    ---------------

                    Total operating expenses            43,341            140,161            200,135
                                               ---------------    ---------------    ---------------

                    Loss from operations ...           (43,341)          (140,161)          (200,135)

Interest expense ...........................                --            (12,167)           (15,500)
                                               ---------------    ---------------    ---------------

                    Loss before income taxes           (43,341)          (152,328)          (215,635)

Income tax provision (Note 4) ..............                --                 --                 --
                                               ---------------    ---------------    ---------------

                    Net loss ...............   $       (43,341)   $      (152,328)   $      (215,635)
                                               ===============    ===============    ===============

Basic and diluted loss per share ...........   $         (0.02)   $         (0.06)
                                               ===============    ===============

Weighted average common shares outstanding .         2,717,002          2,701,720
                                               ===============    ===============
</TABLE>

                 The accompanying notes to financial statements


                                      F-4
<PAGE>

                            ST. JOSEPH ENERGY, INC.
                         (A Development Stage Company)
                  Statement of Changes in Shareholders' Equity

<TABLE>
<CAPTION>
                                                                                                      Deficit
                                                                                                    Accumulated
                                              Preferred Stock          Common Stock      Additional   During
                                         ---------------------   ---------------------    Paid-in   Development
                                           Shares    Par Value     Shares    Par Value    Capital      Stage       Total
                                         ---------   ---------   ---------   ---------   ---------   ---------    ---------
<S>                                            <C>    <C>         <C>         <C>         <C>         <C>          <C>
March 1999, sale of common stock
    to founders ($.001/share) (Note 2)          --   $      --   2,000,000   $   2,000   $      --   $      --    $   2,000
March and April 1999, sale of
    common stock pursuant to private
    placement offering at $.25 per
    share, net of $710 of offering
    costs (Note 5) ...................          --          --     101,720         102      24,618          --       24,720
Fair value of office space contributed
    by an officer (Note 2) ...........          --          --          --          --       1,800          --        1,800
Net loss .............................          --          --          --          --          --     (11,189)     (11,189)
                                         ---------   ---------   ---------   ---------   ---------   ---------    ---------

Balance at
    December 31, 1999 ................          --          --   2,101,720       2,102      26,418     (11,189)      17,331

November and December 2000, sale
    of common stock at $.25 per
    share (Note 5) ...................          --          --     600,000         600     149,400          --      150,000
Fair value of office space contributed
    by an officer (Note 2) ...........          --          --          --          --       2,400          --        2,400
Net loss .............................          --          --          --          --          --      (8,777)      (8,777)
                                         ---------   ---------   ---------   ---------   ---------   ---------    ---------

Balance at
    December 31, 2000 ................          --          --   2,701,720       2,702     178,218     (19,966)     160,954

Fair value of office space contributed
    by an officer (Note 2) ...........          --          --          --          --       2,400          --        2,400
Net loss .............................          --          --          --          --          --    (152,328)    (152,328)
                                         ---------   ---------   ---------   ---------   ---------   ---------    ---------

Balance at
    December 31, 2001 ................          --          --   2,701,720       2,702     180,618    (172,294)      11,026

June 2002, sale of common stock at
    $.25 per share (Note 5) ..........          --          --      40,000          40       9,960          --       10,000
September 2002, sale of common stock
    at $.25 per share (Note 5) .......          --          --       7,200           7       1,793          --        1,800
Fair value of office space contributed
    by an officer (Note 2) ...........          --          --          --          --       2,400          --        2,400
Net loss .............................          --          --          --          --          --     (43,341)     (43,341)
                                         ---------   ---------   ---------   ---------   ---------   ---------    ---------

Balance at
    December 31, 2002 ................          --   $      --   2,748,920   $   2,749   $ 194,771   $(215,635)   $ (18,115)
                                         =========   =========   =========   =========   =========   =========    =========
</TABLE>

                 The accompanying notes to financial statements

                                      F-5
<PAGE>


                            ST. JOSEPH ENERGY, INC.
                         (A Development Stage Company)
                            Statement of Cash Flows

<TABLE>
<CAPTION>
                                                                                                 March 19,
                                                                      Years Ended                  1999
                                                                     December 31,                 Through
                                                             -----------------------------      December 31,
                                                                 2002             2001             2002
                                                             -------------    -------------    -------------
<S>                                                          <C>              <C>              <C>
Cash flows from operating activities:
    Net loss .............................................   $     (43,341)   $    (152,328)   $    (215,635)
    Adjustments to reconcile net loss to net cash
       used by operating activities:
          Depreciation ...................................           3,605            2,967            9,772
          Office space contributed by an officer (Note 2)            2,400            2,400            9,000
          Investment loss (Note 1) .......................              --          119,500          119,500
          Changes in operating assets and liabilities:
             Inventory ...................................              --           (1,068)          (1,068)
             Accounts payable and accrued liabilities ....          29,500               --           29,500
             Accrued liabilities eliminated in abandonment              --           12,167           15,500
                                                             -------------    -------------    -------------
                     Net cash used in
                         operating activities ............          (7,836)         (16,362)         (33,431)
                                                             -------------    -------------    -------------

Cash flows from investing activities:
    Acquisition of property and equipment ................              --           (5,435)         (14,363)
    Payments for mineral lease interests (Note 1) ........              --               --         (135,000)
                                                             -------------    -------------    -------------

                     Net cash used in
                         investing activities ............              --           (5,435)        (149,363)
                                                             -------------    -------------    -------------

Cash flows from financing activities:
    Proceeds from the sale of common stock (Note 5) ......          11,800               --          189,230
    Payments for offering costs (Note 5) .................              --               --             (710)
                                                             -------------    -------------    -------------
                     Net cash provided by
                         financing activities ............          11,800               --          188,520
                                                             -------------    -------------    -------------

                         Net change in cash ..............           3,964          (21,797)           5,726

Cash, beginning of period ................................           1,762           23,559               --
                                                             -------------    -------------    -------------

Cash, end of period ......................................   $       5,726    $       1,762    $       5,726
                                                             =============    =============    =============

Supplemental disclosure of cash flow information:
    Income taxes .........................................   $          --    $          --    $          --
                                                             =============    =============    =============
    Interest .............................................   $          --    $          --    $          --
                                                             =============    =============    =============

Non-cash investing and financing activities:
    Mineral lease interests acquires for debt (Note 1) ...   $          --    $     200,000    $     200,000
                                                             =============    =============    =============
</TABLE>

                 The accompanying notes to financial statements

                                      F-6
<PAGE>


                           ST. JOSEPH ENERGY, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements

(1)    Summary of Significant Accounting Policies

Organization and Basis of Presentation
--------------------------------------
St. Joseph Energy, 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. The Company is a development stage enterprise in
accordance with Statement of Financial Accounting Standard ("SFAS") No. 7.

The Company was originally organized to produce and sell pottery in all forms,
as well as publish and sell other types of artwork including lithographs,
sculptures and paintings. However, in 2000, the Company invested $335,000 in two
oil and gas properties through an agreement with LDC Operating, Inc., an
unrelated third party, who owned the working interests in the properties. The
Company borrowed $200,000 from an individual and used a portion of the proceeds
from its stock offering to make the investment. In August 2001, the Company
assigned all of its rights in the properties to the lender in satisfaction of
the $200,000 debt and wrote-off the remaining investment as a total loss. The
loss on the investment, which was charged to operations, totaled $119,500.
Thereafter, the Company returned to its original business plan.

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 is a development stage enterprise that has
suffered significant losses since inception. This factor, among others, may
indicate that the Company will be unable to continue as a going concern for a
reasonable time.

The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's ability to
continue as a going concern is dependent upon its ability to generate sufficient
cash flow to meet obligations on a timely basis and ultimately to attain
profitability. The Company's management intends to obtain working capital
through additional equity offerings to help fund the Company's operations. There
is no assurance that the Company will be successful in its efforts to raise
additional working capital or achieve profitable operations. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

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, 2002.

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

Inventory
---------

Inventory consists of photograph prints and pottery supplies and is stated at
the lower of cost or market. Cost is determined using the specific
identification method.

                                       F-8

<PAGE>

|                           ST. JOSEPH ENERGY, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements


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:

Pottery equipment................................5 years
Computer equipment...............................3 years
Other property (signs)...........................10 years

Upon retirement or disposition, 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.

Offering costs
--------------

The Company incurred legal fees related to the preparation of its private
placement memorandum. Such costs were initially deferred until the offering was
completed, at which time they were recorded as a reduction of gross proceeds
from the offering.

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. However, the Company has a simple capital structure for the
periods presented and, therefore, there is no difference between the basic and
diluted loss per share.

Income Taxes
------------

Income taxes are provided for the tax effects of transactions reported in the
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 future tax return consequences
of those differences, which will either be taxable or 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.

Use of estimates
----------------

The preparation of the financial statements in conformity with generally
accepted accounting principals 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 financial
statements; and the reported amounts of revenues and expenses during the
reporting period. Accordingly, actual results could differ from those estimates.

Year-end
--------

The Company operates on a calendar year.

                                       F-9

<PAGE>

                           ST. JOSEPH ENERGY, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements


(2)  Related Party Transactions

An officer contributed office space to the Company for all periods presented.
The office space was valued at $200 per month based on the market rate in the
local area and is included in the accompanying financial statements as
contributed rent with a corresponding credit to contributed capital.

On March 19, 1999, the Company sold 2,000,000 shares of its restricted common
stock to three officers for $2,000 ($.001 per share).

(3)  Property and Equipment

Property and equipment consisted of the following at December 31, 2002:

Pottery equipment...................$  7,492
Computer equipment..................   6,331
Other property......................     540
                                    --------
    Total property and equipment      14,363

Less accumulated depreciation.......  (9,772)
                                    --------
    Property and equipment, net     $  4,591
                                    ========

(4)    Income Taxes

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


                                          Years Ended
                                          December 31,
                                         ------------
                                        2002       2001
                                       ------     ------

U.S. Federal statutory rate........... 15.00%     27.29%
State income tax,
  net of federal benefit..............  3.94%      3.37%
Contributed rent...................... -1.05%     -0.48%
Net operating loss for which no tax
  benefit is currently available......-17.89%    -30.18%
                                      -------    -------
                                        0.00%      0.00%
                                      =======    =======

At December 31, 2002, the Company's current tax benefit consisted of a net tax
asset of $56,821, due to operating loss carryforwards of $206,635, which was
fully allowed for, in the valuation allowance of $56,821. 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, 2002 and 2001 were $7,752 and
$45,956, respectively. Net operating loss carryforwards will expire through
2022.

                                      F-10

<PAGE>

                           ST. JOSEPH ENERGY, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements

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 carryforwards
generated prior to the ownership change will be subject to an annual limitation
which could reduce or defer the utilization of those losses.

(5) Shareholders' Equity

Preferred Stock
---------------

The Board of Directors is authorized to issue shares of preferred stock in
series 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. The Company had no preferred shares issued and outstanding
at December 31, 2002.

Common Stock
------------

During September 2002, the Company sold 7,200 shares of its common stock for
$.25 per share pursuant to the exemptions afforded by Section 4(2) of the
Securities Act of 1933 (the "Act"), as amended. The Company received gross
proceeds of $1,800.

During June 2002, the Company sold 40,000 shares of its common stock for $.25
per share pursuant to the exemptions afforded by Section 4(2) of the Act. The
Company received gross proceeds of $10,000.

During the November and December of 2000, the Company sold 600,000 shares of its
common stock for $.25 per share pursuant to the exemptions afforded by Section
4(2) of the Act. The Company received gross proceeds of $150,000.

During the March and April of 1999, the Company sold 101,720 shares of its
common stock for $.25 per share pursuant to the exemptions afforded by Section
3(b) and 4(2) of the Act and Rule 504 of Regulation D promulgated thereunder.
The Company received net proceeds of $24,720 after deducting offering costs
totaling $710.

                                      F-11