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

                                  FORM 10-KSB


[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

                                      OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934


                        Commission File No.  0-17204

                                 INFINITY, INC.
       (Exact Name of Small Business Issuer as Specified in its Charter)

             Colorado                               84-1070066
(State or Other Jurisdiction of             (I.R.S. Employer Identi-
Incorporation or Organization)                   fication Number)

                 211 West 14th Street, Chanute, Kansas 66720
         (Address of Principal Executive Offices, Including Zip Code)

Issuer's telephone number, including area code:  (620) 431-6200

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock

Indicate by check mark 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 [ ]

Check if there is no 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. [  ]

State Issuer's revenues for its most recent fiscal period: $10,951,381

As of March 20, 2003, 7,905,990 of the Registrant's $0.0001 Par Value Common
Stock were outstanding. The aggregate market value of voting stock held by
nonaffiliates of the Registrant was approximately $55,112,000.

Documents incorporated by reference: Proxy statement for the Annual Meeting of
Shareholders to be held on June 5, 2003.

Transitional Small Business Disclosure Format (Check One):  Yes [ ]  No [X]






                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

     Infinity, Inc. ("Infinity") was organized as a Colorado corporation on
April 2, 1987.

     The following table sets forth the subsidiaries of Infinity by type of
activity.  Each of these subsidiaries is 100% owned.  Additional information
about the activities of each subsidiary follows:

<TABLE>
<CAPTION>
Exploration and           Oil Field             Corporate
Production                Service               Services         Inactive
Subsidiaries              Subsidiaries          Subsidiaries     Subsidiaries
---------------           ------------          ------------     ------------
<S>                       <C>                   <C>              <C>
Infinity Oil and Gas      Consolidated Oil      CIS-Oklahoma,    Infinity Research
of Wyoming, Inc.          Well Services, Inc.   Inc.             and Development,
                                                                 Inc.

Infinity Oil and Gas                            Infinity         L.D.C. Food
of Kansas, Inc.                                 Nicaragua Ltd.   Systems, Inc.

Rio Grande                                      Infinity         Consolidated
Resources, SA                                   Nicaragua        Pipeline Company,
                                                Offshore, Ltd.   Inc.

                                                                 CIS Oil and Gas, Inc.
</TABLE>

     Consolidated Oil Well Services, Inc. ("Consolidated") acquired assets
necessary to provide oil field services in Eastern Kansas and Northeastern
Oklahoma in January 1994.  Consolidated expanded its operations into
Northeastern Wyoming with the acquisition of Powder River Cementers, LLC
during September 1999. In November 2001 Consolidated expanded its operations
into South Central Wyoming by leasing operating facilities near and
transferring service equipment to Rock Springs, Wyoming. This entity provides
fracturing, cementing, acidizing, and nitrogen services as well as trucking of
fluids to its oil field customers.

     Infinity Oil and Gas of Kansas, Inc. ("Infinity-Kansas") owned a 100%
working interest and an 80% revenue interest in 80 acres of oil leasehold in
the Cherokee Basin of Eastern Kansas, which was developed as an enhanced oil
recovery project.  In September 2000, Infinity-Kansas expanded its oil
production operations with the acquisition of 16 active oil producing leases
which encompass approximately 2,000 acres located in the Owl Creek Field,
Woodson County, Kansas.  Infinity-Kansas acquired a 100% working interest and
87.5% revenue interest in this property.  Reserve reports prepared by
independent petroleum engineers estimated proved reserves of 138,164 barrels
of oil with a discounted pretax future net cash flow of $537,659 on the two
properties as of December 31, 2001.  Infinity-Kansas sold the properties to
West Central Oil LLC May 1, 2002 for $1,800,000.  Infinity-Kansas has also
acquired a 31.25% interest through a capital contribution in the Little Bear
Creek prospect in Southwest Kansas.  This prospect is an undeveloped river
sand prospect operated by an unrelated third party, IGWT, Inc.



                                    2



     Infinity Oil and Gas of Wyoming, Inc. ("Infinity-Wyoming") was
incorporated in January 2000 for the purpose of acquiring leasehold with the
intent of exploring for and developing coal bed methane reserves.  To date
Infinity-Wyoming has acquired leases on four projects that include 210,786
acres.  Infinity-Wyoming acquired a working interest in a coal bed methane
property known as "LaBarge" that contains 29,523 gross acres in the Greater
Green River Basin of Wyoming.  The lease on approximately 16,526 acres of the
property is subject to a 30% participation election by the original lessee of
the acreage.  If the party chooses not to participate in the drilling and
completion of a well, then the 100 working interest and the approximately 80%
associated revenue interest is retained by Infinity-Wyoming until the
individual well has generated earnings to recover the cost of the well plus a
300% non-consent penalty.  Infinity-Wyoming has acquired a 100% working
interest, with no working interest provisions, and an approximate 80% net
revenue interest on the additional 13,000 acres of the property.  Infinity-
Wyoming has drilled ten coal bed methane gas wells, seven of which have been
completed.  Infinity-Wyoming has also drilled one water disposal well and
reentered an existing well bore and completed it as a disposal well.

     Reserve reports for the LaBarge project prepared by independent petroleum
engineers as of December 31, 2002 show total proved producing reserves of 12.3
BCFE (billion cubic feet equivalent) net to Infinity-Wyoming's interest, with
a discounted future net cash flow before income taxes of $14.0 million. In
addition to the proved producing reserves as of December 31, 2002
Infinity-Wyoming classified 12 offset locations as containing proved
undeveloped reserves.  These 12 locations are estimated to have proved
reserves of 31.3 BCFE net to Infinity-Wyoming's interest, with discounted
future net cash flow before income taxes of $33.3 million.

     Infinity-Wyoming acquired a working interest in an additional prospect
known as "Pipeline" with the execution of an agreement in July 2000 granting
Infinity-Wyoming the right to earn 16,000 acres of leasehold.  This acreage is
also in the Greater Green River Basin of Wyoming, but is separate from the
LaBarge acreage.  Infinity-Wyoming acquired an initial 100% working interest
and an 82.5% net revenue interest in the property.  Through Federal and State
lease auctions Infinity-Wyoming has expanded its acreage position in the
project by 19,340 acres, bringing its total acreage in the project to 35,340
acres.  Infinity-Wyoming has drilled 26 gas wells and three disposal wells.
The first five wells drilled on the Pipeline prospect were connected to
commercial pipeline facilities and began producing gas in August 2001 while 17
additional wells drilled and completed on the acreage were connected to the
pipeline during 2002. Infinity-Wyoming has obtained permits for 37 additional
gas wells on the Pipeline project.  Six of the completed gas wells and one
water disposal well have been shut in until further analysis and completion
work can be done and four of the gas wells which have been drilled are
awaiting completion.

     Reserve reports for the Pipeline project prepared by independent
petroleum engineers as of December 31, 2002 show total proved producing
reserves of 15.1 BCFE net to Infinity-Wyoming's interest, with a discounted
future net cash flow before income taxes of $15.4 million. In addition to the
proved producing reserves as of December 31, 2002 Infinity-Wyoming classified
30 offset locations as containing proved undeveloped reserves.  These 30
locations are estimated to have proved reserves of 25.9 BCFE net to Infinity-
Wyoming's interest, with discounted future net cash flow before income taxes
of $14.7 million.  The reports also identify an additional nine locations as
proved non-producing and eleven locations that contain proven reserves behind
pipe.  These reserve classes contain 7.1 BCFE and 4.1 BCFE of reserves and
$4.7 million and $2.0 million of discounted future net cash flow before income
taxes, respectively.

                                    3


     Infinity-Wyoming acquired leases on 16,237 acres of coal bed methane
property in the Piceance Basin in Northwestern Colorado in November 2000.
Infinity-Wyoming acquired a 100% working interest in the property.  Under the
terms of the lease agreement Infinity-Wyoming must drill a total of five wells
within the first five years of the lease.  Infinity-Wyoming acquired an
additional 3,788 acres of leasehold adjacent to its original Piceance Basin
Acreage.  Infinity-Wyoming obtained a ten-year lease that requires an annual
minimum royalty fee of $1.50 per acre for the first 5 years and $2.00 for the
last five years of the lease.  Infinity-Wyoming acquired a 100% working
interest and an approximate 84.5% net revenue interest in the acreage.

     Infinity-Wyoming acquired a working interest in 131,181 acres of a
prospective coal-bed methane play in the Sand Wash Basin of Colorado in April
2002.  The majority of the leasehold acquired has a 100% working interest and
an 80% net revenue interest and is comprised of fee, federal and state leases,
most of which expire between 2004 and 2008.  The acreage is divided into two
areas, a northern block consisting of approximately 64,563 acres and a
southern block consisting of approximately 66,618 acres.  Infinity-Wyoming has
spent approximately $1,494,173, or $11.39 per acre in leasehold acquisition
costs.  Infinity-Wyoming has also incurred approximately $104,544 in remedial
costs on 4 existing wells on the property in accordance with state
requirements.

     CIS-Oklahoma, Inc. owns the real property and facilities that Infinity
and Consolidated occupy in Chanute and Ottawa, Kansas, Bartlesville, Oklahoma
and Gillette, Wyoming.  In addition to the purchase of the original
facilities, the Bartlesville, Oklahoma facility was expanded in 2002 with the
completion of a new office and shop facility at a cost of approximately
$438,000.  These properties were purchased with the proceeds from and serve as
collateral for loans that were established with local sources.

     Infinity Nicaragua Ltd. and Infinity Nicaragua Offshore Ltd. (the
Infinity Nicaragua companies) are wholly owned subsidiaries of Infinity and
incorporated in the Bahamas.  The Infinity Nicaragua companies together own a
majority interest in Rio Grande Resources S.A. (Rio Grande). Rio Grande is a
Nicaraguan company.  Pursuant to Nicaraguan law, Nicaraguan companies must
have a minimum of three shareholders and there are three shareholders of Rio
Grande. The Infinity Nicaraguan companies own 98.2% of Rio Grande.  Rio Grande
was awarded concessions to develop two offshore blocks in Nicaragua. The
Instituto Nicaraguense de Energia ("INE"), the Nicaraguan governmental entity
regulating oil and gas activities, refused to recognize the concessions
awarded to Rio Grande. The relationships that were built with INE and the
geological and geophysical research that was done helped Infinity, Inc. to
become one of only six companies qualified to bid on the first international
bidding round held by INE in January 2003.  Infinity bid on 24 blocks of
acreage, comprised of over one million acres, and expects to hear the results
of the bidding by the end of April, 2003.

     Infinity also has four inactive subsidiaries: Infinity Research and
Development, Inc., L.D.C. Food Systems, Inc., CIS Oil and Gas, Inc. and
Consolidated Pipeline Company.

BUSINESS ACTIVITIES

     Infinity is primarily engaged in providing oil and gas well services
through Consolidated and in the identification, acquisition, and development
of oil and gas properties through Infinity-Kansas and Infinity-Wyoming.
Consolidated also operates a wastewater treatment facility on a limited basis.



                                   4


     Consolidated provides services associated with drilling and completion of
oil and gas wells, including cementing, acidizing, fracturing, nitrogen
pumping and water hauling. Consolidated previously provided on-site
remediation services for hazardous and non-hazardous waste, and operated a
centralized water treatment facility and facilities to treat brine water
produced by oil and gas wells.  The Cheyenne, Wyoming waste-water treatment
facility operates on a limited basis.

     The Infinity-Kansas and Infinity-Wyoming subsidiaries are engaged in the
acquisition and development of oil and gas properties. The activities of these
companies focus on the acquisition of interests that allow Infinity and its
subsidiaries to utilize their experience gained and assets owned as the
largest oil and gas well service provider in Eastern Kansas and Northeastern
Oklahoma.  Infinity-Kansas' current interest is in a partner operated River
Sand play in Southwest Kansas.  Infinity-Wyoming has acquired an interest in
the Greater Green River Basin of South West Wyoming for the purpose of
producing coal bed methane gas. For a complete description of the properties
and the activities related to these properties see "Item 2. Description of
Property - Oil and Gas Interest in Leasehold Acreage."

COMPETITION

     Consolidated's competition in Eastern Kansas consist mainly of Cudd
Pumping Services and Blue Star Acid Services. In Northeastern Oklahoma,
Consolidated competes with Cudd Pumping Services, BJ Services, and several
small local companies. Consolidated's bulk materials facilities, experienced
work force, and well maintained fleet of service vehicles puts it in a
competitive position to maintain revenues in these locations.

     Consolidated continues to see competition from three major service
companies: Halliburton, BJ Services, and Schlumberger throughout Wyoming; and
multiple smaller cementing companies in Northeastern Wyoming.  Consolidated
may be at a competitive disadvantage when compared to the major companies that
are well established with substantial financial resources. These companies can
redirect assets and manpower, much like Consolidated has done, to insure that
resources to meet the growing demand are available.  Some of the exploration
and development companies in this area also have the resources available to
develop their own service providers.  Consolidated's ability to provide
services that meet the market demand in a timely manner while providing
quality service to the wells will be crucial to Consolidated's ability to
compete in this re-emerging market.

     Infinity's growth strategy includes the acquisition of oil and gas
properties. There can be no assurance, however, that Infinity or its
subsidiaries will be able to successfully acquire identified targets, or have
the financing available for the acquisitions. Many companies are now focusing
on the same types of acquisitions that Infinity-Kansas and Infinity-Wyoming
are trying to make and many of these companies have greater financial
resources available for acquiring the properties.











                                   5



MAJOR CUSTOMERS

     Consolidated provided oil field services to over 380 customers during the
year ended December 31, 2002.  Devon Energy purchased $1,568,953 in services
or about 14% of total revenue.  Consolidated also provided services to
Infinity-Wyoming which resulted in eliminated inter-company revenue of
$2,119,122.

     Consolidated provided oil field services to over 350 customers during the
nine-month transition period ended December 31, 2001.  Amvest Osage and CMS
Energy purchased $1,332,878 and $1,302,481 in services, respectively, or about
11% each of total revenue. Consolidated does not have any long-term oil field
service contracts with any customers.

     Infinity-Wyoming sells its produced gas from the Pipeline project to Duke
Energy Field Services ("Duke").  During the period ended December 31, 2002
Infinity-Wyoming sold approximately 628,000 MCF (thousand cubic feet) of gas
to Duke for total revenue of $1,198,933, or about 11% of total revenue.  Oil
production from the Pipeline project was sold to Big West Oil LLC or to
Chevron.  During the period ended December 31, 2002 Infinity-Wyoming sold
43,279 barrels of oil for total revenue of $899,123.

     Infinity-Wyoming sells a portion of its gas to Duke on a forward contract
basis.  As of October 1, 2002 Infinity-Wyoming had contracted to sell 1,000
MMBTU (million British thermal units) per day to Duke at a price of $2.97 per
MMBTU.  This contract ends September 30, 2003.  Infinity-Wyoming also had a
sales contract in place from November 1, 2002 through March 31, 2003 to sell
1,000 MMBTU per day to Duke at a price of $3.00 per MMBTU.  Beginning April 1,
2003 and effective through March 31, 2004, Infinity-Wyoming has contracted to
sell 3,500 MMBTU per day to Duke at a price of $4.71 per MMBTU.  At the
current Pipeline gas BTU factor of 1095 BTU per cubic foot of gas, this
equates to a price of $5.16 per MCF.

EMPLOYEES

     Infinity and its subsidiaries currently have approximately 94 employees.
Consolidated has 83 employees in its oil field services business, Infinity-
Wyoming has 7 employees in its oil and gas exploration business, and Infinity
has 4 employees in administrative positions.  Additional employees will be
hired as the development of business requires.

GOVERNMENT REGULATION

     Federal, state and local authorities extensively regulate the oil and gas
industry.  Legislation and regulations affecting the industry are under
constant review for amendment or expansion, raising the possibility of changes
that may affect, among other things, the pricing or marketing of oil and gas
production.  Noncompliance with statutes and regulations may lead to
substantial penalties, and the overall regulatory burden on the industry
increases the cost of doing business and, in turn, decreases profitability.
State and local authorities regulate various aspects of oil and gas drilling
and production activities, including the drilling of wells (through permit and
bonding requirements), the spacing of wells, the unitization or pooling of oil
and gas properties, environmental matters, safety standards, the sharing of
markets, production limitations, plugging and abandonment, and restoration.

     Consolidated, Infinity-Kansas, and Infinity-Wyoming currently own or
lease properties that are being used for the disposal of drilling and produced
fluids from exploration and production of oil and gas and for other uses


                                   6



associated with the oil and gas industry.  Although these subsidiaries follow
operating and disposal practices that it considers appropriate under
applicable laws and regulations, hydrocarbons or other wastes may have been
disposed of or released on or under the properties owned or leased by the
subsidiaries or on or under other locations where such wastes were taken for
disposal.  Infinity could incur liability under the Comprehensive
Environmental Response, Compensation and Liability Act or comparable state
statutes for contamination caused by wastes it generated or for contamination
existing on properties it owns or leases, even if the contamination was caused
by the waste disposal practices of the prior owners or operators of the
properties.  In addition, it is not uncommon for landowners and other third
parties to file claims for personal injury and property damage allegedly
caused by the release of produced fluids or other pollutants into the
environment.

     The operations of Consolidated routinely involve the handling of
significant amounts of oil field related materials, some of which are
classified as hazardous substances.  Consolidated's transportation operations
are regulated under the Federal Motor Carrier Safety Regulations of the
Department of Transportation as administered by the Kansas Department of
Transportation, Oklahoma Department of Transportation, and Wyoming Department
of Transportation.  The operation of salt-water disposal wells by Consolidated
is regulated by the Kansas Department of Health and Environment.  Consolidated
will incur an estimated $35,000 in costs associated with operating within
current environmental regulations this fiscal year.

     The Federal Water Pollution Control Act of 1972 (the "FWPCA") imposes
restrictions and strict controls regarding the discharge of wastes, including
produced waters and other oil and gas wastes, into navigable waters.  These
controls have become more stringent over the years, and it is probable that
additional restrictions will be imposed in the future.  Permits must be
obtained to discharge pollutants into state and federal waters.  The FWPCA
provides for civil, criminal and administrative penalties for unauthorized
discharges of oil and other hazardous substances and imposes substantial
potential liability for the costs of removal or remediation.  State laws
governing discharges to water also provide varying civil, criminal and
administrative penalties and impose liabilities in the case of a discharge of
petroleum or its derivatives, or other hazardous substances, into state
waters.  In addition, the Environmental Protection Agency has adopted
regulations that require many oil and gas production sites, as well as other
facilities, to obtain permits to discharge storm water runoff.

     Exploration and production operations of Infinity-Wyoming and Infinity-
Kansas are subject to various types of regulation at the federal, state, and
local levels.  Such regulations include requiring permits and drilling bonds
for the drilling of wells, regulating the location of wells, the method of
drilling and casing wells, and the surface use and restoration of properties
upon which wells are drilled.  Many states also have statutes or regulations
addressing conservation matters, including provisions for the unitization or
pooling of oil and gas properties, the establishment of maximum rates of
production from oil and gas wells and the regulation of spacing, plugging and
abandonment of such wells.  The operation and production of Infinity-Wyoming's
properties will be subject to the rules and regulations of the Wyoming Oil and
Gas Conservation Commission (WYOGCC) and the Colorado Oil and Gas Conservation
Commission (COGCC).  In addition a portion of the properties are on federal
lands and are subject to Onshore Orders 1 and 2, The National Historic
Preservation Act (NHPA), National Environmental Policy Act (NEPA) and the
Endangered Species Act.



                                   7


     Infinity-Wyoming is producing up to 1,350 barrels of water per day from
coal bed methane wells that it operates.  Infinity-Wyoming currently uses
injection wells to dispose of the water into underground rock formations and
plans to continue to use this method for disposal of the water produced from
its operated wells.  If the future wells produce water of lesser quality than
allowed under state law for injection in underground rock formations or at a
volume greater than can be injected into the current disposal well,
Infinity-Wyoming could incur costs of up to $5.00 per barrel of water to
dispose of the produced water.  At current production rates, this would cost
Infinity-Wyoming an additional $203,000 a month in water disposal costs.  If
Infinity-Wyoming's wells produce water in excess of the limits of its
permitted facilities, Infinity-Wyoming may have to drill additional disposal
wells.  Each additional disposal well could cost Infinity-Wyoming up to
$250,000 on the Pipeline project and up to $700,000 on the LaBarge project.
It costs Infinity-Wyoming approximately $35,000 per year to operate these
disposal wells.

     Infinity-Wyoming is required to complete an environmental impact study
("EIS") on the LaBarge federal acreage by the Bureau of Land Management before
it can continue development of the acreage.  Infinity-Wyoming estimates that
the study will cost $700,000 and will take an additional twelve to eighteen
months to complete.  Infinity-Wyoming will pay approximately 60% of the cost
of the EIS and will bill the remaining 40% to other operators in the area
covered by the EIS.  The costs incurred on this project through December 31,
2002 are approximately $48,000.  Infinity-Wyoming management has met with the
Bureau of Land Management to discuss the requirements for the study and
continues to provide information to the regulatory agency concerning the
development of the acreage.  Under the direction of the Bureau of Land
Management and in partnership with other operators in the area the EIS will
encompass acreage beyond the extent of Infinity-Wyoming's acreage and the
costs will be shared among all of the operators.  Under the terms of the lease
agreement the lease can be extended by the lessee's grant of an extension or
Infinity-Wyoming can invoke a "force majeure" provision within the lease
agreement for the period of time required to complete the EIS.  The required
EIS will only impact the ability of Infinity-Wyoming to continue development
of any fee land that it has acquired in the area of operation if access to the
fee land is across Federal land.

    Infinity-Wyoming will also be required to complete an environmental
assessment on the Federal acreage within the Pipeline acreage.  This
environmental assessment will cost approximately $300,000 and will take
approximately 12 months to complete.  Infinity-Wyoming will incur a majority
of the costs associated with this report, but has not incurred any costs as of
March 2003.  The environmental assessment should not impact Infinity-Wyoming's
ability to drill on the fee and state acreage within the Pipeline project as
long as the fee acreage can be accessed using existing rights-of-way.

ITEM 2.  DESCRIPTION OF PROPERTY

BUSINESS PROPERTIES

     Infinity's headquarters are located at 211 West 14th Street, Chanute,
Kansas 66720, along with the headquarters and some of the operating facilities
of Consolidated.  This facility and other Consolidated facilities in
Bartlesville, Oklahoma and Ottawa, Kansas were purchased in November of 1999
by the CIS-Oklahoma, Inc. subsidiary.  CIS-Oklahoma also acquired facilities
in Gillette, Wyoming for $140,000 during 2001, which includes office and shop



                                   8



facilities for Consolidated's operations.  Funds for the acquisitions were
obtained through a loan from a local bank, secured by the Kansas and Wyoming
oil field service facilities.  The loan was for $350,000 for a period of seven
years with an adjustable interest rate of 8.5% per annum.  Effective November
2002, the interest rate was adjusted to 4.25%.  Payments on this loan are
approximately $4,700 per month and the loan balance was $249,081 at December
31, 2002.  The shop and office facility that was built in Bartlesville,
Oklahoma during 2001 for the operations of Consolidated was financed from cash
flow and with a ten-year, 9.25% note with a local bank.  The note had a
balance of approximately $335,000 at December 31, 2002 and has monthly
payments of approximately $4,900 and is collateralized by the Bartlesville,
Oklahoma facility.

     Consolidated is based on the business and operations acquired in January
of 1994 and Powder River Cementers, LLC purchased in August of 1999. This
subsidiary provides numerous services associated with drilling and completion
of oil and gas wells, including cementing, acidizing, fracturing, nitrogen
pumping and water hauling. Consolidated provides these services out of service
facilities it owns in Chanute and Ottawa, Kansas; Bartlesville, Oklahoma; and
Gillette and Rock Springs, Wyoming utilizing a fleet of approximately 149
vehicles. These vehicles were specifically designed to provide service to oil
and gas well operators working at depths ranging from 100 to 5,000 feet as is
usually the case in Eastern Kansas, Northeastern Oklahoma, and the coal bed
methane development of the Powder River and Greater Green River Basins of
Wyoming.   The service vehicles are part of the collateral for a revolving
note, capital expenditures note and term loan with interest rates of Prime
plus 1%, which is currently 5.25%.  The payment on the term loan is $80,626
per month with a final payment of approximately $974,000 due in December 2004.
 During the twelve months ended December 31, 2002 Consolidated purchased
fracturing equipment using the proceeds of a $720,000 draw from the capital
expenditures line of credit.   Payments on the capital expenditures line of
credit are approximately $15,000 per month with a final payment of
approximately $375,000 due in December 2004.  Consolidated has also purchased
vehicles using financing from manufacturers.  These loans have terms of 12 to
72 months with interest rates ranging from 7.6% to 11%.  As of December 31,
2002, Consolidated was making monthly payments of approximately $23,169 under
these loans. Consolidated obtained the credit facility in January 2002. (See
"ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS" for a
complete discussion of the refinancing.)

     Consolidated leases property near Cheyenne, Wyoming, which is the site of
the brine water treatment facility. Rent on this land lease is $1,000 per
year.  The lease is for a term of twenty-five years beginning July 1994, but
may be terminated by Consolidated at any time on written notice.  In February
of 2003 Consolidated signed a letter of intent to sell these facilities and
transfer the lease on the property to the new owner.  Consolidated expects to
close on this property sale during the second quarter of 2003.

OIL AND GAS INTEREST IN LEASEHOLD ACREAGE

     In February of 2000 Infinity-Kansas acquired, through a joint venture
with Verde Oil Company ("Verde"), a 100% working interest before payout in an
80-acre, Verde operated lease in the Cherokee Field in Southeast Kansas known
as the Manson Lease. At the time of the purchase there were five producing
wells on the lease.  As a 100% working interest owner, Infinity-Kansas was
responsible for all costs associated with the operation of the property as a
polymer augmented water flood project.  A polymer augmented water flood
project involves the injection of a water and polymer solution into injection



                                   9


wells to force oil out of the producing reservoir.  The polymer increases the
viscosity of the fluid, which helps to force oil out of geological formations
toward the producing wells.  Total capital costs of this enhanced oil recovery
project were approximately $1.1 million for the drilling of 16 injection
wells, 16 producing wells and 1 water supply well, installation of oil
gathering facilities, and installation of the injection facilities on the
property.

    In September 2000 Infinity-Kansas expanded its oil production operations
with the acquisition of sixteen active oil producing leases which encompass
approximately 2,000 acres located in the Owl Creek Field, Woodson County,
Kansas.  Infinity-Kansas acquired the property for $510,000 through a public
auction and invested an additional $17,400 to enhance the property's
production capabilities.  There were over 135 wells on the property including
over 105 wells drilled for oil production, eighteen wells for water injection
in order to provide reservoir enhancement, nine water supply wells and three
salt-water disposal wells.  Infinity-Kansas also acquired 80 acres of land on
which oil tank batteries and a production field office are located.  Total
cost of the land acquisition was $100,000.  Infinity-Kansas owned a 100%
working interest in all of the acreage and a 100% revenue interest in the land
purchased.  The remaining acreage was subject to a 12.5% royalty, giving
Infinity-Kansas an 87.5% net revenue interest.

     In May 2002 Infinity-Kansas sold its interest in the Manson Lease and the
Owl Creek Field to West Central Oil, LLC for $180,000 in cash and a $1,620,000
note receivable.  West Central Oil, LLC is owned by the Managing Director of
Verde Oil Company, who was the operator of the properties.

     Infinity-Kansas acquired a 31.25% interest in a 5,120 acre river sand
prospect in Stanton County, Kansas for $56,000, or $35.00 per acre in November
2001.  Infinity-Kansas contributed $66,250 for the drilling of one exploratory
well, which was a dry hole.  Infinity-Kansas also contributed $15,000 for a 3-
D seismic study across the acreage, and an additional $63,633 for the drilling
of an additional well.

     Infinity-Wyoming acquired a working interest in approximately 24,500
acres of coal bed methane mineral leases in the LaBarge area of the Green
River Basin of South Central Wyoming in March 2000. Infinity-Wyoming acquired
the leasehold for $1.1 million, or approximately $45.50 per acre. The lease on
approximately 3,200 acres of the original fee lease has expired and Infinity-
Wyoming has been unable to renew the lease.  Infinity-Wyoming has spent
approximately $535,000 associated with the purchase of an additional 8,223
acres of leasehold, perfecting the leases and lease rental and bonus payments.
Infinity-Wyoming has also capitalized interest and finance charges and
incurred indirect cost of approximately $0.4 million for the acquisition of
the leasehold for a total leasehold investment of $2.0 million or
approximately $68.48 per acre on the 29,523 acres under lease. The lease on
approximately 16,526 acres of the property is subject to 30% participation
election by the original lessee of the acreage. If the party chooses not to
participate in the drilling and completion of a well, then the 100% working
interest and the approximately 80% associated revenue interest is retained by
Infinity-Wyoming until the individual well has generated earnings to recover
the cost of the well plus the 300% non-consent penalty.  Infinity-Wyoming
acquired a 100% working interest, with no working interest provisions, and an
approximate 80% net revenue interest on the remaining acreage within this
area.




                                   10



     Approximately 2,800 acres of the leasehold was a fee lease acquired in
July 2002.  The acquisition of the fee lease, which is not subject to federal
permitting requirements, gave Infinity-Wyoming the opportunity to further
define the reserves on the LaBarge project since wells could be drilled
immediately and were several miles from the five initial coal bed methane
wells that had been drilled on the property. Infinity-Wyoming commenced
drilling operations during the fourth quarter 2002 on the fee acreage and has
drilled five production wells, two of which have been completed and started
selling gas in 2003, and one water disposal well on the fee acreage.  During
the year ended December 31, 2002, Infinity-Wyoming incurred $5.3 million for
the drilling of four of the coal bed methane gas wells on the fee acreage
acquired in July, the stimulation and completion of the five wells previously
drilled in the period ended December 31, 2001, the acquisition of additional
acreage, laying of a gas gathering line and the beginning of the environmental
impact study on the federal lease acreage on the property.  Infinity-Wyoming
has incurred $7.0 million in direct exploration and development costs on the
LaBarge property through December 31, 2002.  Indirect costs of exploration and
development, interest expense and finance charges of approximately $2.2
million have also been capitalized to the LaBarge project.  Subsequent to
December 31, 2002 Infinity-Wyoming has incurred approximately $0.5 million of
costs to drill two additional LaBarge wells and to perforate, stimulate and
complete 2 of the wells drilled on the fee acreage.  Infinity-Wyoming began
dewatering operations on the five initial wells drilled on the property in
March 2002 and produced 64,373 MCF of gas from the property during the year
ended December 31, 2002.

       Infinity-Wyoming expects to spend approximately $0.6 million during the
second  quarter of 2003 to complete three gas wells that have been drilled on
the LaBarge acreage.  The completion of the LaBarge pipeline will cost
Infinity-Wyoming approximately $0.2 million during 2003 and Infinity-Wyoming
will continue work on the environmental impact study on the LaBarge acreage
and estimates that the study will cost an additional $0.4 million and will
take an additional twelve to eighteen months to complete.

     The Pipeline prospect was acquired in July of 2000 with the acquisition
of 14,940 acres of leasehold for $298,800, or $20.00 per acre.  Infinity-
Wyoming also acquired an additional 1,060 acres from the original leaseholder.
This acreage is also in the Greater Green River Basin of Wyoming, but is
separate from Infinity-Wyoming's LaBarge acreage.  Infinity-Wyoming acquired
an initial 100% working interest and an 82.5% net revenue interest in the
property.  Through Federal and State lease auctions and fee acquisitions
Infinity-Wyoming has expanded its acreage position in the project by 19,340
acres.  Including legal fees, permitting, lease bonus payments, acquisition
fees, capitalized interest and capitalized financing costs, Infinity-Wyoming
has invested approximately $3.4 million, or $97.30 per acre in the project.
As of December 31, 2002 Infinity-Wyoming has drilled 26 production wells and
three water disposal wells.  Twenty-two of the production wells are currently
connected to the sales pipeline and sixteen are producing gas to the sales
meter, while six are shut in.  Four of the wells have been drilled and are
awaiting completion and connection to the pipeline.  Infinity-Wyoming spent
approximately $12.8 million to drill, complete, and stimulate twenty two
production wells, three water disposal wells and drill four additional
production wells.  Indirect costs of development, interest expense and finance
charges of approximately $2.3 million have also been capitalized to the
Pipeline project.  Infinity-Wyoming has obtained permits for 37 additional gas
wells on the Pipeline project.

    Subsequent to December 31, 2002 Infinity-Wyoming elected to enter the
development phase of its lease agreement on the Pipeline Project.  This


                                   11

election required Infinity-Wyoming to deposit $250,000 in "Liquidated
Damages".  This amount is to be refunded at a rate of $25,000 per well as
additional wells beyond the original exploration phase commitment of the lease
agreement are drilled.  Infinity-Wyoming has drilled nine of the required
wells and received the refund of liquidated damages for those nine wells on
April 3, 2003.  The remaining liquidated damages will be refunded upon the
drilling of one additional well.  Infinity-Wyoming is required to complete six
additional wells prior to February 28, 2004 in order to meet its drilling
obligations under the development phase of the lease and maintain the lease on
the acreage covered by the development phase election.  In order to complete
six additional wells, Infinity-Wyoming will need to drill and complete three
wells and complete three other wells already drilled on the acreage.  The
cost to drill and complete these wells is estimated to be approximately $1.9
million.

     Infinity-Wyoming acquired leases on 16,237 acres of coal bed methane
property in the Antelope field of the Piceance Basin in Northwestern Colorado
in November 2000 for the equivalent of approximately $36.00 per acre in cash
and stock and has capitalized $66,008 in interest to the property.  Infinity-
Wyoming acquired a 100% working interest and an 81.5% net revenue interest in
the property.  Under the terms of the lease agreement Infinity-Wyoming must
drill a total of five wells within the first five years of the lease.
Infinity-Wyoming has acquired an additional 3,788 acres at Federal and State
auctions for a cost of $10,762 or an average of $2.84 per acre and incurred an
additional $80,449 in leasehold costs for a total leasehold cost of
approximately $37.00 per acre.

     In addition to the development activities on its LaBarge and Pipeline
acreage, Infinity-Wyoming acquired an interest in approximately 156,000 acres
of a prospective coal bed methane play in the Sand Wash Basin of Wyoming and
Colorado.  Infinity-Wyoming incurred approximately $1.3 million in direct
costs to acquire the leasehold and complete remedial cementing work that was
required on four existing wells on the leasehold.  An additional $0.1 million
in indirect costs were also capitalized to the project. The interest acquired
includes both shallow coal bed methane prospects and the deeper prospects
which include a potential fractured Niobrara zone that has been commercially
produced in the areas surrounding the acquired leasehold.

     The following table set forth the oil and gas lease acreage and the
number of wells producing and drilled as of March 31, 2001 and December 31,
2001 and 2002.
<TABLE>
<CAPTION>
                                          March 31,         December 31,         December 31,
                                            2001                2001               2002
                                      Gross      Net      Gross      Net      Gross     Net
                                      ------    ------    ------    ------    ------   ------
<S>                                   <C>       <C>       <C>       <C>      <C>        <C>
LaBarge Undeveloped Acres             24,500    19,600    21,300    17,040   27,920     21,094
LaBarge Developed Acres                 -         -         -         -       1,603      1,314
LaBarge Producing Wells                 -         -         -         -          5         4
LaBarge Exploratory Wells Drilled          1         1         4         3       4         4
LaBarge Development Wells Drilled       -         -         -         -          1         1

Pipeline Undeveloped Acres            29,404    24,865    28,764    24,324    32,300    27,314
Pipeline Developed Acres                -         -          640       528     3,040     2,570
Pipeline Producing Wells                -         -            5         4        22        18
Pipeline Exploratory Wells Drilled         5         4        13        11         8         7
Pipeline Development Wells Drilled         1         1         1         1         1         1

Antelope Undeveloped Acres            16,237    13,233    20,025    16,270    20,025    16,270
Antelope Developed Acres                -         -         -         -          -         -
Antelope Producing Wells                -         -         -         -          -         -
Antelope Exploratory Wells Drilled      -         -         -         -          -         -
Antelope Development Wells Drilled      -         -         -         -          -         -

                                        12

Cherokee Undeveloped Acres              -         -         -         -         -          -
Cherokee Developed Acres                  80        64        80        64      -          -
Cherokee Producing Wells                  21        17        21        17      -          -
Cherokee Exploratory Wells Drilled      -         -         -         -         -          -
Cherokee Development Wells Drilled        16        13      -          -        -          -

Owl Creek Undeveloped Acres             -         -         -         -         -          -
Owl Creek Developed Acres              2,000     1,750     2,000     1,750      -          -
Owl Creek Producing Wells                109        95       109        95      -          -
Owl Creek Exploratory Wells Drilled     -         -         -         -         -          -
Owl Creek Development Wells Drilled     -         -         -         -         -          -

Sand Wash Undeveloped Acres             -         -         -         -       156,000   128,391
Sand Wash Developed Acres               -         -         -         -           640       560
Sand Wash Producing Wells               -         -         -         -             4         4
Sand Wash Exploratory Wells Drilled     -         -         -         -         -          -
Sand Wash Development Wells Drilled     -         -         -         -         -          -

</TABLE>

OIL AND GAS RESERVES

     The table below sets forth the quantities of proved reserves as
determined by independent petroleum engineers Wells Chappell and Company, Inc.
for 2002 and by Fairchild and Wells for 2001.  All of these proved reserves
were located in the continental U.S., and the present value of estimated
future net revenues from these reserves is on a non-escalated basis discounted
at 10 percent per year as of the period indicated. There has been no major
discovery or other favorable or adverse event that is believed to have caused
a significant change in estimated proved reserves subsequent to December 31,
2002.

<TABLE>
<CAPTION>
                                                          December 31,      December 31,
                                       March 31, 2001          2001              2002
                                       --------------     --------------    ------------
<S>                                    <C>                <C>               <C>
Estimated Proved Gas Reserves (MCF)       9,144,761           9,224,600     95,790,200
Estimated Proved Oil Reserves (BLS)         444,573             138,164        182,700
Present Value of Future Net Revenues
  (before future income tax expense)     19,562,166         $ 9,936,459     84,010,206

</TABLE>

     Reference should be made to Note 17 (Supplemental Oil and Gas Information
- Unaudited) to the consolidated financial statements for additional
information pertaining to the proved oil and gas reserves.

     As of the date of this report, no additional requests for information
have been received from or reports of reserve information provided to any
regulatory or governmental agency.

PRODUCTION, PRICE AND COST DATA

     For the nine-month transition period ended December 31, 2001 Infinity-
Kansas produced 29,289 barrels of oil and no gas.  Infinity-Kansas received an
average selling price of $21.26 per barrel for the oil sold and incurred
$17.05 per barrel, or $499,264, in operating expenses and taxes to produce the
oil.  Infinity-Wyoming received an average selling price of $1.76 per MCF for
the 128,998 MCF and $18.51 per barrel for the oil sold from the Pipeline
property during the nine-month period ended December 31, 2001.  These sales
prices equal an average sales price of $2.66 per MCF equivalent sold from the

                                   13


property.  Infinity-Wyoming incurred $1.43 per MCF equivalent, or $575,376, in
operating expenses and taxes to produce the oil and gas.

     Prior to the sale of the Manson and Owl Creek properties in May 2002,
Infinity-Kansas sold 9,376 barrels of oil and no gas for the twelve-month
period ended December 31, 2002.  Infinity-Kansas received an average selling
price of $19.55 and incurred $20.57 per barrel, or $192,891 in operating
expenses and taxes to produce the oil in 2002.  Infinity-Wyoming received an
average selling price of $1.88 per MCF for the 677,306 MCF and $20.81 per
barrel for the 43,752 barrels of oil sold from the LaBarge and Pipeline fields
during 2002.  These sales prices equal an average sales price of $2.32 per MCF
equivalent sold from the properties.  Infinity-Wyoming incurred $1.73 per MCF
equivalent, or $1,627,801, in operating expenses and taxes to produce the oil
and gas.

DELIVERY COMMITMENTS

     Infinity-Wyoming entered into a gas gathering and transportation
contract with Duke in which Duke will build gas gathering laterals and install
compression facilities to deliver gas produced from the Pipeline wells to the
Overland Trail Transmission pipeline.  During 2002 the contract was amended to
include additional compression and gathering facilities installed by Duke and
delivery points for the additional production being generated by Infinity-
Wyoming. Infinity-Wyoming will pay a gathering fee of $0.40 per MCF until
8,000,000 MCF have been produced, then the fee reduces to $0.25 per MCF.
Infinity-Wyoming was obligated to deliver 600,000 MCF the first year,
1,600,000 MCF the second year and 2,000,000 the third and fourth years and
1,800,000 in the fifth and final year of the contract.  To date, Infinity-
Wyoming has delivered approximately 757,000 MCF on this contract.  The
Pipeline sales volumes will also be subject to a $0.15 per Million British
Thermal Units (MMBTU) charge for access onto the Overland Trail Transmission
line.

     Infinity-Wyoming entered into a gas sales contract that required it to
provide 1,000 MMBTU of gas a day from its Pipeline wells for which it received
$1.80 per MMBTU.  This contract began April 1, 2002 and expired October 31,
2002.  As of October 2, 2002 Infinity-Wyoming entered into a new contract for
the sale of 1,000 MMBTU of gas a day for $2.97 per MMBTU.  This contract will
expire September 30, 2003.  On November 1, 2002 and running until March 31,
2003 Infinity-Wyoming contracted to sell 1,000 MMBTU per day to Duke at a
price of $3.00 per MMBTU. Beginning April 1, 2003 and effective through March
31, 2004, Infinity-Wyoming has contracted to sell 3,500 MMBTU per day to Duke
at a price of $4.71 per MMBTU, which equates to $5.16 per MCF.

     Infinity-Wyoming will receive the Colorado Interstate Gas (CIG) Pipeline
index price for each MCF of gas in excess of the contracted volume delivered
onto the Overland Trail Transmission line.  Infinity and its subsidiaries
presently have no other agreements or commitments to provide quantities of oil
or gas in the future.

ITEM 3. LEGAL PROCEEDINGS

     There are no pending material legal proceedings to which the Company is a
party.

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

     No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of the period covered in this Report.



                                   14


                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Principal Market or Markets

     Infinity's Common Stock began trading on the Nasdaq Small-Cap Market on
June 29, 1994, under the symbol "IFNY." In August 2002, Infinity became listed
on the Nasdaq National Market.  The following table sets forth the high and
low closing sale prices for Infinity's securities as reported by the Nasdaq
Stock Market.

     Quarter Ended                         High         Low
     -------------                         ----         ---
     March 31, 2001                         5.095       3.095
     June 30, 2001                          6.22        4.125
     September 30, 2001                     5.52        3.975
     December 31, 2001                      5.70        4.525

     March 31, 2002                         7.34        5.03
     June 30, 2002                         11.38        7.72
     September 30, 2002                     8.19        5.95
     December 31, 2002                      9.00        7.11

Approximate Number of Holders of Common Stock

     The number of record holders of Infinity's $0.0001 par value common stock
at March 28, 2003, was 194 and the Company believes it has over 1,500
beneficial owners of such stock.

Dividends

     Holders of common stock are entitled to receive such dividends as may be
declared by Infinity's Board of Directors. No dividends have been paid with
respect to Infinity's common stock and no dividends are anticipated in the
foreseeable future. Pursuant to the terms of the Loan Agreement with LaSalle
Bank, N.A., Infinity's Consolidated Oil Well Services, Inc. subsidiary is
prohibited from paying any dividends to Infinity during the term of the
agreement.

Sales of Unregistered Securities

     On November 22, 2002, Infinity issued 20,000 shares of its common stock
to John Garrison, a former officer, upon exercise of an option at $3.00 per
share in a private transaction.  In connection with this transaction Infinity
relied on Section 4(2) of the Securities Act of 1933, as amended.  Mr.
Garrisson is a sophisticated investor who had complete access to information
concerning Infinity.  The certificate issued bears a restrictive legend, and
stop transfer instructions were issued to Infinity's transfer agent.

     On November 22, 2002 Infinity received $3,000,000 from an investor as a
bridge loan due January 5, 2004.  In connection with this loan, Infinity
issued five year options to the investor to purchase up to an aggregate of
320,000 shares of Infinity's Common Stock at $8.75 per share.  In connection
with this transaction the Company relied on Section 4 (2) of the Securities
Act of 1933, as amended.  The investor is a sophisticated investor who was
given complete information concerning Infinity.

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

     This Annual Report on form 10-KSB contains forward-looking statements
(as such term is defined in the private Securities Litigation Reform Act of

                                   15

1995), and information relating to Infinity and its subsidiaries that is based
on beliefs of management.  When used in this Report, the words "estimate,"
"project," "believe," "anticipate," "intend," "expect," and similar
expressions are intended to identify forward-looking statements.  Such
statements reflect the current views of Infinity with respect to future events
based on currently available information and are subject to risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements.  Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date hereof.  Infinity does not undertake any obligation to release
publicly any revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

     Infinity and its operating subsidiaries Infinity-Wyoming, Infinity-Kansas
and Consolidated are engaged in identifying and acquiring oil and gas acreage,
exploring and developing acquired acreage, and providing oil and gas well
services. Infinity's acquisition strategy focuses on acreage or strategic
alliances that allow Infinity to utilize its service equipment and the
experience gained as Consolidated became the largest oilfield service company
in Eastern Kansas and Northeast Oklahoma while developing the acreage.
Infinity's primary focus is on the development of its coal bed methane
properties located on 64,863 gross acres in the Green River Basin of Wyoming,
20,025 gross acres in the Piceance Basin of Colorado and 156,640 acres in the
Sand Wash Basin of Wyoming and Colorado. Infinity's involvement in the
wastewater disposal industry through its wastewater division has been scaled
back significantly with only limited operations occurring at the Cheyenne,
Wyoming facility.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE
NINE-MONTH TRANSITION PERIOD ENDED DECEMBER 31, 2001

     Infinity's operations have been focused on providing oil field services
to customers in Eastern Kansas, Northeast Oklahoma, Northeast Wyoming and
Southcentral Wyoming and development of its coal bed methane properties in
Southcentral Wyoming.

Oil Field Service Operations

     During the year ended December 31, 2002 Consolidated generated $8.6
million in net revenue and cost of goods sold of $4.6 million compared to $9.9
million in net revenue and cost of goods sold of $5.2 million for the nine-
month transition period ended December 31, 2001.  Revenue for the year ended
December 31, 2002 on sales to third parties was negatively impacted by
environmental issues in the Powder River Basin of Wyoming which is serviced by
the Gillette, Wyoming camp.  Due to the requirement for an Environmental
Impact Study across the Powder River Basin, very few drilling permits were
issued for new wells.  Because of the lack of drilling activities revenue from
the Gillette, Wyoming operations of Consolidated were reduced by $1.9 million
from $2.3 million in the nine month transition period ended December 31, 2001
compared to $0.4 million in the year ended December 31, 2002.  Cost of goods
sold were reduced to $0.7 million for the year ended December 31, 2002, a $0.7
million decrease from $1.4 million in the nine month transition period ended
December 31, 2001.  Revenue for the period ended December 31, 2002 increased
by $0.6 million at Consolidated's facilities in Kansas and Oklahoma while the
cost of goods sold increased by $0.2 million due to the longer period
recognized during 2002 compared to the nine month transition period in 2001.
For the year ended December 31, 2002 Consolidated also generated $2.1 million
in revenue and $1.1 million in cost of goods sold related to inter-company
sales to Infinity-Wyoming compared to inter-company sales and cost of goods
sold for the nine-month transition period ended December 31, 2001 of $0.5

                                   16

million and $0.4 million.  The sales to Infinity-Wyoming are eliminated in the
accompanying consolidated statement of operations.

     Indirect expenses incurred during the year ended December 31, 2002
increased $1.5 million dollars to $4.1 million from $2.6 million during the
nine-month transition period.  Depreciation expense for the year ended
December 31, 2002 increased to $1.5 million from $0.8 million in the nine
month transition period ended December 31, 2001.  The $0.6 million increase
was the result of the acquisition of approximately $6.5 million in assets
during 2001 and 2002 entering the depreciation pool as Consolidated expanded
the capabilities of its fleet of oil field service vehicles and updated its
facilities.  Consolidated also experienced an increase in the cost of general
liability and property insurance from $41,384 in the nine month transition
period to $317,899 in the year ended in December 2002.  The increase was the
result of doubling the amount of general liability insurance carried on the
operations in order to meet customer requirements and an increase in property
insurance due to the additions to the oil field service fleet.  Consolidated
also saw a 100% increase in health care expenses from $132,904 in the nine
month transition period ended December 2001 to $267,031 in the year ended
December 31, 2002.  The additional $0.5 million increase in indirect operating
expenses was related to the three additional months of operations during the
period ended December 31, 2002.

     Consolidated experienced a net loss, net of inter-company activity, of
$0.4 million during the year ended December 31, 2002 compared to net income of
$2.0 million for the nine-month transition period ended December 31, 2001.  A
portion of the decrease is due to inter-company eliminations reducing net
income by $1.0 million for the period ended December 31, 2002 compared to a
reduction of net income of $0.1 million for the nine-month transition period
ended December 31, 2001.  In addition, Consolidated's net income (loss) was
decreased because of reduced revenue from sales in the Powder River Basin of
Wyoming and increases in depreciation, liability insurance expense and health
insurance costs.

Oil and Gas Production

     During the four months prior to the sale of the Manson and Owl Creek
properties on May 1, 2002, Infinity-Kansas generated revenue from oil sales of
$0.2 million and operating costs of $0.2 million compared to revenue from oil
sales of $0.6 million and operating costs of $0.5 million for the nine-month
transition period ended December 31, 2001.  Infinity-Kansas also recognized
depreciation and depletion expense of $30,584 for the year ended December 31,
2002 compared to $49,066 for the nine-month transition period.

     Infinity-Wyoming generated $2.2 million in revenue from the sale of oil
and gas production while incurring lease operating expense and taxes of $1.6
million.  Infinity-Wyoming generated $1.2 million in revenue and incurred
operating expenses of $0.6 million during the nine month transition period
ended December 31, 2001.  During the transition period, there were five wells
producing.  As a result of the increase in producing wells, Infinity-Wyoming
expanded its production capacity to include production from sixteen wells in
the Pipeline Field and five wells in the LaBarge field.  Infinity-Wyoming also
recognized increased depreciation and depletion expense of $165,416 on its
producing properties during the period ended December 31, 2002 compared to
$81,166 during the nine-month transition period ended December 31, 2001.

     During the year ended December 31, 2002 the oil and gas production
subsidiaries incurred $0.6 million in other operating expenses compared to
$0.4 million during nine-month transition period ended December 31, 2001.  The
increase in other operating expense is related to increased overhead and
staffing of the Denver headquarters of Infinity-Wyoming, and the production
field office in Rock Springs, Wyoming.

                                   17

     The oil and gas production subsidiaries incurred a net loss of $0.3
million during the year ended December 31, 2002 compared to net income for the
nine-month transition period ended December 31, 2001 of $0.1 million.  The
make up of the revenue stream changed substantially during 2002 with the sale
of the Infinity-Kansas properties and the completion of additional wells in
the Pipeline and LaBarge fields.  The increase in revenue was offset by the
higher cost of operating gas wells in Wyoming compared to shallow oil wells in
Kansas and the increased cost of operating overhead in the Denver office of
Infinity-Wyoming and increased staffing in the field office.

Corporate Activities

     Expenses incurred in corporate activities were $2.1 million for the
period ended December 31, 2002 compared to $1.4 million for the nine-month
transition period ended December 31, 2001. Corporate activities include the
salaries of four administrative employees (including Infinity's President and
Chief Financial Officer), travel expenses, professional fees relating to
Exchange Act reports, and shareholder relations costs.  During the year ended
December 31, 2002, Infinity incurred $0.6 million in shareholder relations
costs compared to $0.2 million in the nine month transition period.  The $0.4
million increase in shareholder relations costs was related to the process to
list Infinity on the national market and to an increase in costs associated
with meetings and presentations to investors and with public relations
efforts.  Infinity also incurred $0.1 million in additional legal and
accounting fees due to the increased services provided for SEC filings and
report reviews.  Corporate salaries increased by $0.2 million during the
period ended December 31, 2002 due to increases in base salaries, additional
staffing and the three additional months in the period compared to the nine-
month transition period.  Infinity also recognized an additional $0.3 million
in interest expense due to the increase in notes outstanding and the reduction
in the percentage of interest expense capitalized to the undeveloped
properties.  During the nine-month transition ended December 31, 2001,
Infinity impaired the carrying value of certain investments it had made by
$0.6 million.  Infinity recorded no such impairment in 2002.

     During the nine-month transition period ended December 31, 2001,
Infinity recognized a gain of $5.1 million on the sale of 225,000 shares of
Evergreen Resources common stock.  The gain on the sale of the Evergreen
Resources stock was partially offset by $1.8 million in interest expense on
the loans that were secured by the securities in the nine-month transition
period.  Costs of $1.0 million were also incurred for unwinding the financing
agreements secured by the Evergreen Resources common stock, which were
capitalized to the coal bed methane properties that Infinity-Wyoming is
developing.

     Infinity, Inc, and subsidiaries recognized a pre-tax net loss of $2.7
million compared to net income before taxes of $4.1 million for the nine-month
transition period ended December 31, 2001. A deferred income tax benefit of
$1.1 million was recognized for the period ended December 31, 2002 compared to
deferred income tax expense of $1.6 million recognized in the transition
period.  The net loss after taxes for the calendar year period ended December
31, 2002 was $1.6 million compared to net income of $2.5 million for the
transition period ended December 31, 2001.  The decrease in net income after
taxes was the result of a decrease in oil field service sales, the increase in
depreciation expenses on oil field service equipment, and increases in
insurance, professional fees and shareholder relations costs.  The 2001 net
income after tax also included the gain on the sale of 225,000 shares of
Evergreen stock.



                                   18


     Infinity Inc. has provided for a valuation allowance of $1.2 million
against the deferred tax asset due to the uncertainty of realizing the tax
benefit of the net operating loss carry forwards.

RESULTS OF OPERATIONS FOR THE TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2002
COMPARED TO THE COMPARABLE UNAUDITED TWELVE-MONTH PERIOD ENDED DECEMBER 31,
2001

Oil Field Service Operations

     During the year ended December 31, 2002 Consolidated generated $8.6
million in net revenue and cost of goods sold of $4.6 million compared to
$12.4 million in net revenue and cost of goods sold of $6.8 million for the
unaudited year ended December 31, 2001.  Revenue for the year ended December
31, 2002 on sales to third parties was negatively impacted by environmental
issues in the Powder River Basin of Wyoming which is serviced by the Gillette,
Wyoming camp.  Due to the requirement for an Environmental Impact Study across
the Powder River Basin very few drilling permits were issued for new wells in
the area serviced by the Gillette camp.  Because of the lack of drilling
activities, revenue from the Gillette, Wyoming operations of Consolidated were
reduced by $2.9 million from $3.3 million for the unaudited period ended
December 31, 2001 compared to $0.4 million in the year ended December 31,
2002.  Cost of goods sold was reduced to $0.7 million for the year ended
December 31, 2002, a $1.3 million decrease from $2.0 million for the
comparable period ended December 31, 2001.  Revenue for the period ended
December 31, 2002 also decreased by $1.2 million at Consolidated's
Bartlesville, Oklahoma location while the cost of goods sold decreased by $0.4
million due to a decrease in cementing and fracturing activity. During the
period ended December 31, 2002 Consolidated did 250 less cementing jobs and 90
less fracturing jobs from the Bartlesville facility than during the comparable
period of 2001.  Consolidated's customers decreased their level of activity
due to the uncertainty of the stability of oil and gas prices and in order to
evaluate the success of their 2001 drilling programs.  The reductions at the
Bartlesville facility were offset slightly by increases in acidizing and
fracturing work at the Chanute, Kansas facility.  Revenues at the Chanute
facility increased by $0.3 million for the period ended December 31, 2002
compared to the period ended December 31, 2001 on approximately 90 more jobs.
 Consolidated also experienced approximately a 30% decrease in equipment and
vehicle maintenance expense from $1.5 million in the period ended December 31,
2001 compared to $1.0 million for the period ended December 31, 2002.  This
decrease was the result of bringing new units into the fleet of service
vehicles utilized by Consolidated and was partially offset by the increase in
indirect expense of depreciation.  For the year ended December 31, 2002
Consolidated also generated $2.1 million in revenue and $1.1 million in cost
of goods sold related to inter-company sales to Infinity-Wyoming compared to
inter-company sales and cost of goods sold for the comparable period ended
December 31, 2001 of $0.5 million and $0.4 million.  The sales to Infinity-
Wyoming are eliminated in the accompanying consolidated statement of
operations.

     Indirect expenses incurred during the year ended December 31, 2002
increased $0.7 million dollars to $4.1 million from $3.4 million during the
comparable period in 2001.  Depreciation expense for the year ended December
31, 2002 increased to $1.4 million from $1.0 million in the period ended
December 31, 2001.  The $0.4 million increase was the result of the
acquisition of approximately $6.5 million in assets during 2001 and 2002
entering the depreciation pool as Consolidated expanded the capabilities of
its fleet of oil field service vehicles and updated its facilities.
Consolidated also experienced an increase in the cost of general liability and


                                   19


property insurance from $76,724 in the year ended December 31, 2001 to
$317,899 in the year ended in December 31, 2002.  The increase was the result
of doubling the amount of general liability insurance carried on the
operations in order to meet customer requirements and an increase in property
insurance due to the additions to the oil field service fleet.  Consolidated
also saw an increase in health care expense from $152,819 in the 2001 period
ended December 31, 2001 to $267,031 in the year ended December 31, 2002.

     Consolidated experienced a net loss, net of inter-company activity, of
$0.4 million during the year ended December 31, 2002 compared to net income of
$2.1 million for the period ended December 31, 2001.  Net income for the oil
field service business was affected by $2.9 million in reduced sales in the
Powder River Basin, and increases in depreciation expense and insurance costs.
Inter-company eliminations reduced net income by $1.0 million for the period
ended December 31, 2002 compared to a reduction of net income of $0.1 million
for year ended December 31, 2001.

Oil and Gas Production

     During the four months prior to the sale of the Manson and Owl Creek
properties on May 1, 2002, Infinity-Kansas generated revenue from oil sales of
$0.2 million and operating costs of $0.2 million compared to revenue from oil
sales of $0.8 million and operating costs of $0.6 million for the year ended
December 31, 2001.  Infinity-Kansas also recognized depreciation and depletion
expense of $30,584 for the year ended December 31, 2002 compared to $106,941
for the 2001 period.

     Infinity-Wyoming generated $2.2 million in revenue from the sale of oil
and gas production while incurring lease operating expense and taxes of $1.6
million dollars. Infinity-Wyoming generated $1.1 million in revenue and
incurred operating expenses of $0.6 million during the year ended December 31,
2001.  Infinity-Wyoming expanded its production capacity to include production
from sixteen wells in the Pipeline Field and five wells in the LaBarge field.
During the year ended December 31, 2001, there were five wells producing.  As
a result of the increase in producing wells, Infinity-Wyoming also recognized
increased depreciation and depletion expense of $165,416 on its producing
properties during the period ended December 31, 2002 compared to $85,586
during the year ended December 31, 2001.

     During the year ended December 31, 2002 the oil and gas production
subsidiaries incurred $0.6 million in other operating expenses compared to
$0.4 million during period ended December 31, 2001.  The increase in other
operating expense is related to increased overhead and staffing of the Denver
headquarters of Infinity-Wyoming, and the production field office in Rock
Springs, Wyoming.

     The oil and gas production subsidiaries incurred a net loss of $0.2
million during the year ended December 31, 2002 compared to net income for the
period ended December 31, 2001 of $0.1 million.  The make up of the revenue
stream changed drastically during 2002 with the sale of the Infinity-Kansas
properties and the completion of additional wells in the Pipeline and LaBarge
fields. The increase in revenue was offset by the higher cost of operating
gas wells in Wyoming compared to shallow oil wells in Kansas and the increased
cost of operating overhead in the Denver office of Infinity-Wyoming and
increased staffing in the field office.





                                   20



Corporate Activities

     Expenses incurred in corporate activities were $2.1 million for the
year ended December 31, 2002 compared to $1.6 million for the period ended
December 31, 2001. Corporate activities include the salaries of four
administrative employees (including Infinity's President and Chief Financial
Officer), travel expenses, professional fees relating to Exchange Act reports,
and shareholder relations costs.  During the year ended December 31, 2002
Infinity incurred $0.6 million in shareholder relations costs compared to $0.3
million in the twelve month period ended December 31, 2001.  The $0.3 million
increase in shareholder relations costs was related to the process to list
Infinity on the national market and to an increase in costs associated with
meetings and presentations to investors and with public relations efforts.
Infinity also incurred $0.1 million in additional legal and accounting fees
due to the increased services provided for SEC filings and report reviews.
Corporate salaries increased by $0.1 million during the period ended December
31, 2002 due to increases in base salaries and additional staffing.  Infinity
also recognized an additional $0.2 million in interest expense due to the
increase in notes outstanding and the reduction in the percentage of interest
expense capitalized to the undeveloped properties.  During the period ended
December 31, 2001, Infinity impaired the carrying value of certain investments
it had made by $0.6 million.  Infinity recorded no such impairment in 2002.

     During the period ended December 31, 2001, Infinity recognized a gain of
$6.7 million on the sale of 350,000 shares of Evergreen Resources common
stock.  The gain on the sale of the Evergreen Resources stock was partially
offset by $2.1 million in interest expense on the loans that were secured by
the securities.  Costs of $1.0 million were also incurred for unwinding the
financing agreements secured by the Evergreen Resources common stock, which
were capitalized to the coal bed methane properties that Infinity-Wyoming is
developing.

     Infinity, Inc and subsidiaries recognized a pre-tax net loss of $2.7
million compared to net income before taxes of $5.2 million for the unaudited
period ended December 31, 2001. A deferred income tax benefit of $1.1 million
was recognized for the period ended December 31, 2002 compared to a deferred
income tax expense of $2.0 million recognized in the period ended December 31,
2001.  The net loss after taxes for the calendar year ended December 31, 2002
was $1.6 million compared to net income of $3.2 million for the year ended
December 31, 2001.  Decreased sales in the Powder River Basin of Wyoming by
Consolidated, increased depreciation on the equipment utilized in the oil
field service business and increased costs associated with SEC filings,
staffing and oil production operations all contributed to the reduction in net
income after taxes in the year ended December 31, 2002 compared to the year
ended December 31, 2001.  Infinity also recognized a the gain on the sale of
Evergreen stock in the 2001 period that it did not have in the 2002 period.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2002, Infinity had a working capital deficit of $3.1
million compared to a working capital deficit of $2.9 million at December 31,
2001.   During the year ended December 31, 2002 cash provided by operating
activities was $0.1 million compared to cash provided by operating activities
of $1.4 million for the nine-month transition period ended December 31, 2001.

     Cash used in investing activities during the year ended December 31,
2002 was $16.2 million compared to $3.2 million used during the nine-month
transition period ended December 31, 2001.  Proceeds from the sale of
investment securities and other assets generated $0.8 million and $0.2 million


                                   21


respectively during the year ended December 31, 2002 compared to $8.9 million
and $0.1 million respectively in the nine month transition period ended
December 31, 2001.  Infinity and its subsidiaries had expenditures related to
its oil and gas properties, property and equipment, and purchases of other
assets of $14.4 million, $2.7 million, and $0.1 million, respectively,
compared to expenditures of $7.8 million, $3.4 million, and $0.2 million,
respectively during the nine month transition period ended December 31, 2001.
This increase in capital expenditures reflects the continued commitment to
upgrading the oil field service fleet and development of oil and gas
properties.

     At December 31, 2001 Infinity had $6.5 million of 8% Subordinated
Convertible Notes outstanding.  During the year ended December 31, 2002 the
holders of approximately $2.2 million of the notes which are due in June 2006
converted their notes to common stock.  Subsequent to December 31, 2002 an
additional $1.2 million of the notes have been converted, leaving
approximately $3.1 million in notes outstanding at March 31, 2003.

     In January 2002, Consolidated established a new three year term loan
collateralized by substantially all of its oil field service equipment, a
revolving line of credit secured by the eligible receivables of Consolidated
and a $1.0 million capital expenditures line of credit with Lasalle Bank, N.A.
 The notes bear interest at 1% over the prime rate with the notes due on
December 31, 2004.  Consolidated used $1.0 million and $0.8 million of the
proceeds of these new notes to pay a term loan and revolving note,
respectively, that were outstanding at December 31, 2001.  Consolidated also
utilized $1.1 million in proceeds from the term loan to pay off additional
equipment loans and borrowed $0.8 million on a capital expenditures line of
credit with LaSalle Bank to purchase additional equipment.  At December 31,
2002 Consolidated owed $2.5 million on the notes to LaSalle Bank.  Principal
payments of $80,626 and $15,000 are made monthly on the term loan and capital
expenditures loan respectively.

    Infinity, Inc. and its subsidiaries owe approximately $3.5 million for
real estate and equipment loans secured by assets of Infinity and the
subsidiaries.  These notes mature in one to eighteen years and bear interest
from 7.25% to 9.50% and have monthly payments of approximately $37,000.  One
of the notes requires an annual payment of approximately $75,000.  Infinity-
Wyoming also obtained loans of $0.6 million to purchase acreage in the Sand
Wash Basin of Wyoming and Colorado from the sellers of the property.  A
portion of these notes was paid in January 2003 and the remaining $0.4 million
is due in May 2003.

    In April 2002, Infinity borrowed $2.0 million with which to pay
outstanding payables associated with the development of the coal bed methane
properties.  Infinity obtained the bridge financing from a stockholder on
March 7, 2002 with the principal and interest at a rate of 8% due in 90 days.
 Infinity repaid the bridge loan on April 24, 2002 with proceeds from the sale
of $12.5 million of 7% Subordinated Convertible Notes due in 2007.  In
conjunction with the issuance of the bridge loan, Infinity issued options to
purchase 250,000 shares of Infinity, Inc. common stock at $7.34 per share for
five years.

    In June 2002, Infinity issued $12.5 million in 7% Subordinated Convertible
Notes which are due in April 2007, resulting in net proceeds, after
commissions, of $11.7 million.  The proceeds from the note offering were used
to pay the $2.0 million bridge loan, current payables and for the development
of Infinity-Wyoming's coal bed methane properties in the Greater Green River
Basin of Wyoming. In conjunction with the issuance of the Subordinated


                                   22


Convertible Notes, Infinity issued warrants to purchase 200,000 shares of
Infinity, Inc. common stock at $9.058 per share for five years to the
placement agent.  A director of Infinity is an officer of the placement agent.
Subsequent to December 31, 2002 $0.5 million of the notes have been converted
to common stock, leaving approximately $12.0 million of the notes outstanding
at March 31, 2003.

    In November 2002 Infinity borrowed an additional $3.0 million from a
stockholder in order to pay current payables.  The bridge loan is due January
5, 2004 and bears interest at the Comerica Bank Prime Rate plus 1%, currently
5.25%, with interest of $13,125 paid monthly.  In conjunction with the
issuance of the bridge loan, Infinity issued options to purchase 320,000
shares of Infinity, Inc. common stock at $8.75 per share for five years.

    Subsequent to December 31, 2002 Infinity borrowed an additional $0.8
million from stockholders of Infinity to pay outstanding payables related to
the development of Infinity-Wyoming's properties.  These loans bear interest
at 5.25% with interest and principal due January 5, 2004. In conjunction with
the issuance of the bridge loans, Infinity issued options to purchase 150,000
shares of Infinity, Inc. common stock at $8.75 per share for five years.

    Subsequent to December 31, 2002 Infinity also borrowed $0.3 million on a
loan from a local bank.  The loan is payable in ten monthly payments of
$25,000 plus interest of 6.75%.  The proceeds from the loan were used to pay
outstanding payables associated with drilling of additional LaBarge wells in
December 2002 and January 2003.

     Infinity received proceeds of approximately $1.9 million from the
issuance of common stock during the year ended December 31, 2002.
Approximately $1.0 million of the proceeds were from the exercise of
Infinity's Class B Warrants that expired June 30, 2002.  Infinity issued
163,264 shares of common stock upon the exercise of the Class B Warrants.  The
remaining proceeds were received from the exercise of options to purchase
425,000 shares of stock.  Subsequent to December 31, 2002, Infinity issued
107,150 shares of common stock upon the exercise of options which resulted in
proceeds of $0.7 million.

     The working capital deficit as of December 31, 2002 was $3.1 million.
Infinity expects to spend approximately $3.6 million meeting its drilling and
completion, pipeline installation, and environmental impact study obligations
during 2003 and to incur approximately $1.1 million in interest on its
convertible notes.  The minimum drilling obligations previously discussed in
"ITEM 2. DESCRIPTION OF PROPERTIES - OIL AND GAS INTEREST IN LEASEHOLD
ACREAGE" are required to maintain Infinity-Wyoming's present leasehold
position on farm-out agreements on the acreage at Pipeline and LaBarge in
2003.  Infinity expects to incur approximately $1.3 million in corporate cash
usage during 2003.  In order to meet these financial requirements and the
operating needs of Infinity and its subsidiaries during 2003, Infinity has
borrowed an additional $1.0 million in bridge loan financing, and has received
approximately $0.7 million from the exercise of options to purchase common
stock during the first quarter of 2003. Management believes that cash flow
generated from operating activities of the oil field services business and oil
and gas production along with subsequent debt and equity financing should be
sufficient to meet its current cash requirements.

     Consolidated expects to generate approximately $3.3 million in operating
cash flow from the oil field service business during 2003.  The increase in
cash flow from this business segment is expected to be driven by an increase
in business in the Powder River Basin of Wyoming as drilling activity


                                   23


increases there as a result of the completion of the Powder River
environmental impact study and an increase in oil field service operations in
Eastern Kansas and Northeastern Oklahoma as customers move forward with
development activities on leases that will be expiring within the next two
years.  Infinity-Wyoming is also expected to generate approximately $4.6
million in operating cash flow from oil and gas production operations during
2003.  Management anticipates an increase in production from the wells on the
Pipeline project to increase to approximately 6,500 MCF per day due to
additional compression capabilities and bringing additional wells on line
during the year.  In addition to the increase in production, Infinity-Wyoming
has contracts in place to sell 3,500 MMBTU per day at $4.71 and 1,000 MMBTU
per day at $3.00 per MMBTU through March 2004 and November, 2003,
respectively.  Production expenses are expected to stay fairly steady during
the period.

                   Recap of Current Minimum Requirements
                          ($ in Millions)
            Current Deficit                       $3.1
            Property Development Requirements      3.6
            Interest on Notes                      1.1
            Corporate Cash Usage                   1.3
                                                 ------
            Total Current Requirements            $9.1

                        Sources of Cash

            Bridge loan financing                 $1.0
            Stock option exercises                 0.7
            Consolidated operations                3.3
            Infinity-Wyoming operations            4.6
                                                 ------
            Total Sources                         $9.6

     In addition to its operating needs, Consolidated anticipates it will
incur capital expenditures of approximately $1.1 million in 2003 related to
vehicle acquisitions and equipment fabrication of approximately $0.8 million
and facilities maintenance of approximately $0.3 million.  Management believes
that credit available to Consolidated through local sources, vendors and
through its current capital expenditures facility with LaSalle Bank will be
sufficient to meet Consolidated's capital expenditure needs of $1.1 million in
2003.

     Infinity-Wyoming anticipates having capital expenditures, subject to
permitting requirements, beyond the minimum drilling obligations discussed in
"ITEM 2.  DESCRIPTION OF PROPERTY - OIL AND GAS INTEREST IN LEASEHOLD ACREAGE"
of approximately $15.7 million for 2003. Those additional anticipated
expenditures are as follows:  (1)Infinity-Wyoming plans to drill and complete
ten additional production wells and two disposal wells and install the related
facilities on the LaBarge acreage at a cost of approximately $8.1 million;
(2)drill and complete five production wells and one disposal well and the
related facilities on the Antelope acreage at a cost of $3.5 million; (3)drill
and complete five wells in addition to the wells required to meet leasehold
obligations in the Pipeline field at a cost of $2.0 million; and (4)drill and
complete a horizontal Niobrara well in the Sand Wash Basin at a cost of $1.8
million.  Infinity-Wyoming also anticipates incurring additional costs of
approximately $0.3 million for various land acquisitions to fill in acreage
within existing properties.  In order to fund Infinity-Wyoming's anticipated
additional capital expenditures in 2003, Infinity-Wyoming will be required to



                                   24


pursue funding through conventional bank financing, the forward sale of its
oil and gas production or through the public or private equity or debt market
pursued by the parent.  The amount of progress that Infinity-Wyoming will be
able to make on the development of its properties will be dependent upon its
ability to obtain the proper permits for the development and to fund the
development.  Obtaining permits and sufficient funding to meet these
additional capital expenditures cannot be guaranteed.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

COMMODITY RISK

     Infinity's major market risk exposure is in the pricing applicable to its
gas production.  Realized pricing is primarily driven by the prevailing price
for crude oil and spot prices applicable to Infinity's United States crude oil
and natural gas production.  Historically, prices received for gas production
have been volatile and unpredictable.  Pricing volatility is expected to
continue.  Gas price realizations ranged from a monthly low of $1.04 per MCF
to a monthly high of $3.33 per MCF during 2002.  Oil price realizations ranged
from a monthly low of $19.23 per barrel to a monthly high of $28.93 per barrel
during 2002.

     Infinity-Wyoming periodically enters into hedging activities on a portion
of its projected natural gas production in accordance with its Energy Risk
Management Policy.  These activities are intended to support cash flow at
certain levels in order to manage Infinity-Wyoming's cash flow by reducing the
exposure to gas price fluctuations.  See "ITEM 2. DESCRIPTION OF PROPERTY -
DELIVERY COMMITMENTS" and Note 1 to the Consolidated Financial Statements.
Realized gains or losses from Infinity-Wyoming's cash flow risk management
activities are recognized in gas production revenues.  In 2002, Infinity-
Wyoming recognized a net reduction in revenue of $40,490 by hedging its gas
production compared to if it had sold the gas on the spot market.

ITEM 7. FINANCIAL STATEMENTS.

     Please see pages F-1 through F-38.

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

     Not applicable.


















                                   25




                                   PART III

ITEM 9, 10, 11, 12. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) FOR THE EXCHANGE ACT; EXECUTIVE
COMPENSATION; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS; AND CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.

     The information required by these Items is incorporated herein by
reference to the Company's definitive Proxy Statement relating to the Annual
Meeting of Shareholders to be held June 5, 2003.


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

     (a) EXHIBITS.

EXHIBIT
NUMBER     DESCRIPTION                   LOCATION

   3       Articles of Incorporation     Incorporated by reference to
           and Bylaws                    Exhibit No. 3 to the Registrant's
                                         Registration Statement (No.
                                         33-17416-D)

   3.1     Articles and Amendment to     Incorporated by reference to
           Articles of Incorporation     Exhibit No. 3.1 to the Registrant's
                                         Annual Report on Form 10-K for
                                         the fiscal year ended March 31,
                                         1992 (File No. 33-17416-D)

  10.1     Stock Option Plan             Incorporated by reference to
                                         Exhibit No. 10.1 to the Registrant's
                                         Annual Report on Form 10-K for the
                                         fiscal year ended March 31, 1992
                                         (File No. 33-17416-D)

  10.2     1999 Stock Option Plan        Incorporated by reference to
                                         Exhibit No. 10.2 to Registrant's
                                         Annual Report on Form 10-K for the
                                         fiscal year ended March 31, 2000

  10.3     Asset Purchase Agreement      Incorporated by reference to
           dated January 7, 1994,        Exhibit No. 2 to the Registrant's
           among Infinity, Inc. Con-     Current Report on Form 8-K dated
           solidated Industrial Ser-     January 21, 1994
           vices, Inc., Consolidated
           Oil Well Services, Inc.
           and Edsel E. Noland

  10.4     Assignment of Participation   Incorporated by reference to
           Agreement, Conveyance, and    Exhibit 10.8 to the Registrant's
           Bill of Sale between          Annual Report on Form 10-KSB
           Infinity Oil and Gas, Inc.    for the fiscal year ended
           and Infinity Oil and Gas of   March 31, 2000.
           Wyoming, Inc.





                                   26


  10.5     Participation Agreement       Incorporated by reference to
           between Wold Oil Properties,  Exhibit 10.9 to the Registrant's
           Inc. and Infinity Oil and     Annual Report on Form 10-KSB
           Gas, Inc.                     for the fiscal year ended
                                         March 31, 2000.

  10.6     Assignment of Oil and Gas     Incorporated by reference to
           Leases, Operating Rights      Exhibit 10.10 to the Registrant's
           and Record Title, Conveyance  Annual Report on Form 10-KSB
           and Bill of Sale between      for the fiscal year ended
           Infinity Oil and Gas, Inc.    March 31, 2000.
           and Infinity Oil and Gas of
           Wyoming, Inc.

  10.7     Joint Operating Agreement,    Incorporated by reference to
           Manson Lease, between         Exhibit 10.11 to the Registrant's
           Verde Oil Company and         Annual Report on Form 10-KSB
           Infinity Oil and Gas of       for the fiscal year ended
           Kansas, Inc.                  March 31, 2000.

  10.8     2000 Stock Option Plan        Incorporated by reference to
                                         Exhibit 10.12 to the Registrant's
                                         Annual Report on Form 10-KSB
                                         for the fiscal year ended
                                         March 31, 2001.

  10.9     2001 Stock Option Plan        Incorporated by reference to
                                         Exhibit 10.13 to the Registrant's
                                         Annual Report on Form 10-KSB
                                         for the fiscal year ended
                                         March 31, 2001.

  10.10    Form of 8% Convertible        Incorporated by reference to
           Subordinated Notes            Exhibit 10.14 to the Registrant's
                                         Annual Report on Form 10-KSB
                                         for the fiscal year ended
                                         March 31, 2001.

  10.11    Purchase and Sale Agreement   Incorporated by reference to
           dated November 3, 2000        Exhibit 10.15 to the Registrant's
           between Antelope Energy       Annual Report on Form 10-KSB
           Company, LLC, Coyote          for the fiscal year ended
           Exploration Company and       March 31, 2001.
           Melange Associates, Inc.
           and Infinity Oil and Gas of
           Wyoming, Inc.

  10.12    Form of Trust Indenture for   Incorporated by reference to Exhibit
           8% Convertible Subordinated   4.1 to the Registrant's Registration
           Notes with the Wilmington     Statement on Form S-3 (File No.
           Trust Company                 333-69292)

  10.13    Form of Registration Rights   Incorporated by reference to Exhibit
           Agreement                     4.2 to the Registrant's Registration
                                         Statement on Form S-3 (File No.
                                         333-69292)





                                   27


  10.14    Form of Placement Agent       Incorporated by reference to Exhibit
           Warrant                       4.3 to the Registrant's Registration
                                         Statement on Form S-3 (File No.
                                         333-69292)

  10.15    Loan and Security Agreement   Incorporated by reference to Exhibit
           between LaSalle Bank N.A.     10.19 to the Registrant's Annual
           and Consolidated Oil Well     Report on Form 10-KSB for the
           Services, Inc. and related    transition period ended
           guaranties                    December 31, 2001

  10.16    2002 Stock Option Plan        Incorporated by reference to Exhibit
                                         10.20 to the Registrant's Annual
                                         Report on Form 10-KSB for the
                                         Transition period ended
                                         December 31, 2001

  10.17    Trust Indenture               Incorporated by reference to Exhibit
           for 7% Convertible            4.1 to the Registrant's Registration
           Subordinated Notes with       Statement on Form S-3 (File No.
           Wilmington Trust Company      333-96671)

  10.18    Form of Placement Agent       Incorporated by reference to Exhibit
           Warrants                      4.3 to the Registrant's Registration
                                         Statement on Form S-3 (File No.
                                         333-96671)

  10.19    2003 Stock Option Plan        Filed herewith electronically

  10.20    Executive Severance           Filed herewith electronically
           Agreement with
           Stanton E. Ross

  21       Subsidiaries of the           Incorporated by reference to Exhibit
           Registrant                    21 to the Registrant's Annual
                                         Report on Form 10-KSB for the
                                         Transition period ended
                                         December 31, 2001

  23.1     Consent of Ehrhardt, Keefe,   Filed herewith electronically
           Steiner & Hottman, P.C.

  99.1     Certification of Chief        Filed herewith electronically
           Executive Officer Pursuant
           to 18 U.S.C. Section 1350

  99.2     Certification of Chief        Filed herewith electronically
           Financial Officer Pursuant
           to 18 U.S.C. Section 1350

     (b) REPORTS ON FORM 8-K.  None

ITEM 14. CONTROLS AND PROCEDURES

     The chief executive officer and chief financial officer, have conducted
an evaluation of the effectiveness of the design and operation of Infinity's
disclosure controls and procedures within 90 day of the filing date of this
annual report.  Based upon the results of this evaluation, Infinity believes
that they maintain proper procedures for gathering, analyzing and disclosing
all information in a timely fashion that is required to be disclosed in its
Exchange Act reports.  There have been no significant changes in Infinity's
controls subsequent to the evaluation date.

                                   28

                           Table of Contents


                                                                      Page


Independent Auditors' Report                                           F-2

Financial Statements:

     Consolidated Balance Sheet- December 31, 2002                     F-3

     Consolidated Statements of Operations - For the
     Years Ended December 31, 2002 and 2001 (Unaudited)
      and the Nine Months Ended December 31, 2001                      F-4

     Consolidated Statements Changes in Stockholders'
     Equity - For the Year Ended December 31, 2002
     and the Nine Months Ended December 31, 2001                       F-5

     Consolidated Statements of Cash Flows - For the Year
     Ended December 31, 2002 and 2001 (Unaudited) and the
     Nine Months Ended December 31, 2001                               F-6

Notes to Consolidated Financial Statements                             F-8



































                                    F-1




                       INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders
Infinity, Inc. and Subsidiaries
Chanute, Kansas

We have audited the consolidated balance sheet of Infinity, Inc. and
Subsidiaries as of December 31, 2002 and the consolidated statements of
operations, changes in stockholders' equity and cash flows for the year ended
December 31, 2002 and the nine months ended December 31, 2001.  These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
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 audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.   An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements.  An audit also includes
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 condition of Infinity,
Inc. and Subsidiaries, as of December 31, 2002, and the results of their
operations and their cash flows for the year ended December 31, 2002 and the
nine months ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.





                                    /s/ Ehrhardt Keefe Steiner & Hottman PC
                                    Ehrhardt Keefe Steiner & Hottman PC
April 2, 2003
Denver, Colorado
















                                    F-2




                        INFINITY INC. AND SUBSIDIARIES


                          Consolidated Balance Sheet
                              December 31, 2002

<TABLE>
<CAPTION>
                                    Assets
<S>                                 <C>                          <C>
Current assets
     Cash and cash equivalents                                          $   867,017
     Accounts receivable, less allowance for doubtful accounts of
       $25,000                                                            1,493,224
     Inventories                                                            340,217
     Prepaid expenses and other                                             278,510
                                                                        -----------
             Total current assets                                         2,978,968



Property and equipment, at cost, less accumulated depreciation
  and impairment                                                         10,315,068
Oil and gas properties, using full cost accounting net of
  accumulated depreciation, depletion, and amortization
     Subject to amortization                                             19,107,427
     Not subject to amortization                                         13,176,850
Intangible assets, at cost, less accumulated amortization                 5,299,881
Note receivable, less current portion                                     1,597,053
Other assets, net                                                           655,022
                                                                        -----------
Total assets                                                            $53,130,269
                                                                        ===========

                   Liabilities and Stockholders' Equity

Current liabilities
     Current portion of long-term debt                                  $ 2,227,195
     Accounts payable                                                     2,875,900
     Accrued expenses                                                       969,526
                                                                        -----------
             Total current liabilities                                    6,072,621

Long-term liabilities
     Long-term debt, less current portion                                 7,464,156
     8% subordinated convertible notes payable                            4,243,000
     7% subordinated convertible notes payable                           12,540,000
                                                                        -----------
             Total liabilities                                           30,319,777
                                                                        -----------
Commitments and contingencies

Stockholders' equity
     Common stock, par value $.0001, authorized 300,000,000
       shares, issued and outstanding 7,558,462 shares                          756
     Additional paid-in-capital                                          22,870,449
     Accumulated other comprehensive loss                                   (77,301)
     Retained earnings                                                       16,588
                                                                        -----------
             Total stockholders' equity                                  22,810,492
                                                                        -----------

Total liabilities and stockholders' equity                              $53,130,269
                                                                        ===========
</TABLE>
               See notes to consolidated financial statements.

                                   F-3

                   INFINITY INC. AND SUBSIDIARIES

                Consolidated Statements of Operations


<TABLE>
<CAPTION>

                                                     For the Years Ended          For the Nine
                                                        December 31,              Months Ended
                                                  ---------------------------     December 31,
                                                      2002          2001              2001
                                                  -----------     -----------     ------------
                                                                  (Unaudited)
<S>                                               <C>             <C>             <C>

Revenues
     Oil and gas service operations               $ 8,570,631     $12,432,021     $ 9,853,624
     Oil and gas sales                              2,367,713       1,943,650       1,759,095
     Other                                             13,036           8,175           7,724
                                                  -----------     -----------     -----------
          Total revenues                           10,951,380      14,383,846      11,620,443
                                                  -----------     -----------     -----------
Cost of sales
     Oil and gas service operations                 4,620,663       6,725,462       5,154,495
     Oil and gas production expenses                1,582,816       1,177,325       1,074,460
     Oil and gas production taxes                     237,876          67,243          66,290
     Other                                             34,370          41,747          30,800
                                                  -----------     -----------     -----------
          Total cost of sales                       6,475,725       8,011,777       6,326,045
                                                  -----------     -----------     -----------
Gross profit                                        4,475,655       6,372,069       5,294,398

Operating expenses                                  4,647,062       3,530,029       2,789,026
Depreciation, depletion and amortization            2,017,266       1,391,753       1,063,643
                                                  -----------     -----------     -----------
                                                    6,664,328       4,921,782       3,852,669
                                                  -----------     -----------     -----------
Operating income (loss)                            (2,188,673)      1,450,287       1,441,729

Other income (expense)
     Interest income and other income                 123,794         135,609         104,288
     Interest expense                                (602,350)     (2,477,518)     (1,866,155)
     Impairment of other assets                             -        (600,050)       (600,050)
     Gain on sale of investments                            -       6,728,683       5,128,280
     Loss on sale of other assets                     (33,665)        (77,641)        (77,641)
                                                  -----------     -----------     -----------
          Total other income (expense)               (512,221)      3,709,083       2,688,722
                                                  -----------     -----------     -----------
Net income (loss) before income taxes              (2,700,894)      5,159,370       4,130,451

Income tax (expense) benefit                        1,144,028      (1,952,056)     (1,590,056)
                                                  -----------     -----------     -----------
Net income (loss)                                 $(1,556,866)    $ 3,207,314     $ 2,540,395
                                                  ===========     ===========     ===========
Basic earnings (loss) per share                   $     (.22)     $       .50     $       .39
                                                  ===========     ===========     ===========
Diluted earnings (loss) per share                 $     (.22)     $       .46     $       .37
                                                  ===========     ===========     ===========
Weighted average basic shares outstanding           7,202,844       6,479,248       6,501,104
                                                  ===========     ===========     ===========
Weighted average diluted shares outstanding         7,202,844       6,964,784       6,965,922
                                                  ===========     ===========     ===========
</TABLE>


               See notes to consolidated financial statements.





                                   F-4


<PAGE>
                      INFINITY INC. AND SUBSIDIARIES

          Consolidated Statements of Changes in Stockholders' Equity
                   For the Year Ended December 31, 2002
               and the Nine Months Ended December 31, 2001

<TABLE>
<CAPTION>
                                                                                                    Accumulated
                                  Common Stock         Additional                    Total            Other
                               --------------------     paid-in      Retained     Comprehensive    Comprehensive  Stockholders'
                                 Issued      Amount     capital      Earnings         Loss            Loss          Equity
                                ---------    -----    -----------   -----------   -------------   -------------   ------------
<S>                             <C>          <C>      <C>           <C>            <C>             <C>             <C>
Balance, March 31, 2001         6,449,874    $ 644    $11,416,720   $  (966,941)                   $ 3,145,975     13,596,398

Issuance of common stock
 for cash upon the exercise
 of options                        65,350        8        126,062             -                              -        126,070

Warrants issued in
 connection with 8%
 subordinated convertible
 notes                                  -        -        924,717             -                              -        924,717

Beneficial conversion feature           -        -      1,165,500             -                              -      1,165,500

Comprehensive loss:
   Net income                           -        -              -     2,540,395     $ 2,540,395              -      2,540,395
   Embedded derivative
    liability                           -        -              -             -               -     (1,793,426)    (1,793,426)
   Other comprehensive income;
    unrealized holding gains
    in securities during the
    period, net of income taxes
    of $123,587                         -        -              -             -         238,690        238,690        238,690
   Reclassification gains on
    sales of securities, net
    of taxes of $1,743,615              -        -              -             -      (3,384,665)    (3,384,665)    (3,384,665)
   Embedded derivative
    liability reclassified
    to earnings                         -        -              -             -               -      1,793,426      1,793,426
                                ---------    -----    -----------   -----------     -----------    -----------     ----------
Comprehensive loss                                                                  $  (605,580)
                                                                                    ===========

Balance, December 31, 2001      6,515,224      652     13,632,999     1,573,454                              -     15,207,105

Issuance of common stock
 for cash upon the exercise
 of options and warrants          588,264       58      1,947,147             -                              -      1,947,205

Conversion of 8% subordinated
 convertible notes and accrued
 interest into common stock       454,974       46      2,274,813             -                              -      2,274,859

Warrants issued in connection
 with $2,000,000 bridge loan            -        -      1,347,728             -                              -      1,347,728

Warrants issued in connection
 with 7% subordinated
 convertible notes                      -        -      1,386,044             -                              -      1,386,044

Warrants issued in connection
 with $3,000,000 bridge loan            -        -      2,281,718             -                              -      2,281,718

Comprehensive loss:
   Net loss                             -        -              -    (1,556,866)    $(1,556,866)             -     (1,556,866)
   Unrealized loss on commodity
    price swap, net of tax
    benefit of $60,712                  -        -              -             -         (96,981)       (96,981)       (96,981)
   Reclassifications, net of
    income tax expense of
    $12,320                             -        -              -             -          19,680         19,680         19,680
                                ---------    -----    -----------   -----------     -----------    -----------     ----------
   Comprehensive loss                                                               $(1,634,167)
                                                                                    ===========
Balance, December 31, 2002      7,558,462   $  756    $22,870,449   $    16,588                    $   (77,301)   $22,810,492
                                =========    =====    ===========   ===========                    ===========     ==========
</TABLE>


                See notes to consolidated financial statements.

                                        F-5

<PAGE>
                      INFINITY INC. AND SUBSIDIARIES

                   Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                    For the Years Ended       For the Nine
                                                                        December 31,          Months Ended
                                                                 -------------------------    December 31,
                                                                     2002           2001          2001
                                                                 -----------    ----------    ------------
                                                                                (Unaudited)
<S>                                                              <C>            <C>           <C>
Revenues
Cash flows from operating activities
     Net income (loss)                                           $(1,556,866)   $ 3,207,314   $ 2,540,395
                                                                 -----------    -----------   -----------
     Adjustments to reconcile net income (loss) to net cash
      provided by operating activities
         Depreciation, depletion, amortization and impairment      2,017,266      1,966,519     1,663,693
         Deferred income taxes                                    (1,144,028)     1,952,056     1,590,056
         Gain on sale of investments                                       -     (6,728,683)   (5,128,280)
         Gain on sale of other assets                                 33,665         77,641        77,641
         Change in assets and liabilities
               (Increase) decrease in accounts receivable            106,659       (770,612)     (111,393)
               (Increase) decrease in inventories                      9,999       (144,478)      (85,967)
               (Increase) decrease in prepaid expenses and other    (110,920)       157,327         4,541
               Increase in accounts payable                          284,657      1,977,075       712,671
               Increase in accrued expenses                          495,383        142,814        97,564
                                                                 -----------    -----------   -----------
                                                                   1,692,681     (1,370,341)   (1,179,474)
                                                                 -----------    -----------   -----------
                  Net cash provided by operating activities          135,815      1,836,973     1,360,921
                                                                 -----------    -----------   -----------

Cash flows from investing activities
     Purchase of property, equipment, and intangibles             (2,695,382)    (3,481,685)   (3,432,959)
     Proceeds from the sale of investments and marketable
      securities                                                     750,000     11,992,205     8,871,017
     Purchase of marketable securities                                     -       (750,000)     (750,000)
     Proceeds from sale of property and equipment, oil and
      gas properties and other assets                                235,000        390,774       143,808
     Investment in oil and gas properties                        (14,426,524)   (10,380,567)   (7,845,918)
     Payments on note receivable                                       7,844              -             -
     Increase in other assets                                        (88,547)      (109,290)     (217,459)
                                                                -----------    -----------   -----------
                  Net cash used in investing activities          (16,217,609)    (2,338,563)   (3,231,511)
                                                                 -----------    -----------   -----------
Cash flows from financing activities
     Proceeds from borrowings on long-term debt                   21,749,993      7,393,047     7,393,047
     Sale of common stock                                          1,947,205        169,120       126,070
     Principal payments on long-term debt                         (7,414,285)    (6,873,611)   (5,137,987)
                                                                 -----------    -----------   -----------
                  Net cash provided by financing activities       16,282,913        688,556     2,381,130
                                                                 -----------    -----------   -----------

Net increase in cash and cash equivalents                            201,119        186,556       510,540

Cash and cash equivalents, beginning of period                       665,898        478,932       155,358
                                                                 -----------    -----------   -----------

Cash and cash equivalents, end of period                         $   867,017    $   665,898   $   665,898
                                                                 ===========    ===========   ===========


(Continued on following page.)



                 See notes to consolidated financial statements.

                                        F-6

<PAGE>
                         INFINITY INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows


(Continued from previous page.)

Supplemental cash flow disclosures:
                                                                    For the Years Ended       For the Nine
                                                                        December 31,          Months Ended
                                                                 -------------------------    December 31,
                                                                     2002           2001          2001
                                                                 -----------    ----------    ------------
                                                                                (Unaudited)

Cash paid for interest, net of amounts capitalized               $   383,449    $ 2,679,706   $ 2,171,029
                                                                 ===========    ===========   ===========
Non-cash transactions:
     Non-cash investment in oil and gas properties               $ 2,056,283    $ 1,845,648   $ 1,570,377
                                                                 ===========    ===========   ===========
     Property and equipment acquired through capital
      leases or seller financed debt                             $         -    $         -   $ 2,437,138
                                                                 ===========    ===========   ===========
     Oil and gas properties acquired through seller
      financed debt                                              $   607,236    $         -   $         -
                                                                 ===========    ===========   ===========
     Stock-based compensation for warrants issued
      with 8% and 7% subordinated convertible notes
      recorded as loan costs                                     $ 1,386,044    $   924,717   $   924,717
                                                                 ===========    ===========   ===========
     Stock-based compensation for options issued
      with bridge loans recorded as loan costs                   $ 3,629,446    $         -   $         -
                                                                 ===========    ===========   ===========
     Conversion of 8% subordinated convertible notes and
      accrued interest to common stock                           $ 2,274,859    $         -   $         -
                                                                 ===========    ===========   ===========

     Sale of oil and gas property for note receivable            $ 1,620,000    $         -   $         -
                                                                 ===========    ===========   ===========
     Change in accumulated other comprehensive income (loss),
      net of income taxes                                        $    77,301    $ 4,719,001   $ 3,145,975
                                                                 ===========    ===========   ===========

</TABLE>





















               See notes to consolidated financial statements.

                                     F-7

<PAGE>
                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies

The Company and its subsidiaries are engaged in providing oil and gas
production enhancement services in Northeastern Oklahoma, Eastern Kansas, and
the Powder River Basin of Wyoming and in oil and gas exploration, development
and production activities in Southeast Kansas, South Central Wyoming, and
Northwestern Colorado.

Effective with the period ended December 31, 2001, the Company elected to
begin utilizing a December 31 year-end.  Therefore, the period ended December
31, 2001 represents a nine-month period and the year ended December 31, 2002
represents a twelve-month period.

Basis of Presentation

The consolidated financial statements include the accounts of Infinity, Inc.
and its wholly owned subsidiaries, Consolidated Oil Well Services, Inc.,
Infinity Oil and Gas of Wyoming, Inc., Infinity Oil and Gas of Kansas, Inc.,
CIS - Oklahoma, Inc., Infinity Research and Development, Inc., L.D.C. Food
Systems, Inc., Consolidated Pipeline Company, Inc., CIS Oil and Gas, Inc.,
Infinity Nicaragua, Ltd. and Infinity Nicaragua Offshore, Ltd.  Infinity
Nicaragua, Ltd., and Infinity Nicaragua Offshore, Ltd. own a 98.2% interest in
Rio Grande Resources, SA.  All significant intercompany balances and
transactions have been eliminated in consolidation.

Prior Year Comparative Information

In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the results of operations and
cash flows of the Company for the year ended December 31, 2001.

Reclassifications

Certain reclassifications have been made to the balances for the nine months
ended December 31, 2001 to make them comparable to those presented for the
year ended December 31, 2002, none of which change the previously reported net
income.

Accounts Receivable

Revenue producing activities are conducted primarily in Kansas, Oklahoma, and
Wyoming.  The Company grants credit to all qualified customers which
potentially subjects the Company to credit risk resulting from, among other
factors, adverse changes in the industries in which the Company operates
and the financial condition of its customers.  However, management regularly
monitors its credit relationships and provides adequate allowances for
potential losses.






                                  F-8

<PAGE>
                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Hedging Activities

Effective April 1, 2001, the Company adopted the provisions of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS No. 133").  SFAS No. 133 requires the Company to
record derivative instruments embedded in contracts at their fair value.  If
the derivative is designated as a fair value hedge, the changes in the fair
value of the derivative and of the hedged item attributable to the hedged risk
are recognized in earnings.  If the derivative is designated as a cash flow
hedge, the effective portions of changes in the fair value of the derivative
are recorded in other comprehensive income (loss) and are recognized in the
statement of operations when the hedged item affects earnings.  Ineffective
portions of changes in the fair value of cash flow hedges, if any, are
recognized in earnings.

As a result, the Company recorded an embedded derivative liability for
approximately $1,800,000 related to certain of the Company's debt obligations,
which were tied to the market value of the Company's marketable securities.
The adjustment was recorded as a reduction in accumulated other comprehensive
income on April 1, 2001.  The entire amount was transferred to earnings in
April 2001, when the related debt instruments were satisfied (Note 7).

The Company periodically enters into commodity price swap derivatives to
manage price risk with regard to a portion of its natural gas production.
Commodity price swap derivative contracts are accounted for using cash flow
hedge accounting.  Under this method, realized gains and losses on qualifying
hedges are recognized in gas revenues when the associated revenue stream
occurs and the resulting cash flows are reported as cash flows from
operations.  To qualify as a hedge, these contracts must be designated as a
cash flow hedge and changes in their value must correlate with changes in the
price of anticipated future production such that the Company's exposure to the
effects of commodity price is reduced.  If the contract is not a hedge,
changes in the fair value are recorded in the Company's statement of
operations currently.  If a derivative financial instrument, such as the swap
discussed above, is settled before the date of the anticipated transaction,
the Company carries forward the accumulated change in value of the contract
and includes it in the measurement of the related transaction.

During the year ended December 31, 2002, the Company had three commodity price
swap agreements as follows:

                                            MMBTU Per   Amount Per
          Effective Dates                      Day         MMBTU
------------------------------------        ---------   ----------

April 1, 2002 - October 31, 2002              1,000     $    1.80
October 1, 2002 - September 30, 2003          1,000          2.97
November 1, 2002 - March 31, 2003             1,000          3.00



                                   F-9




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Hedging Activities (continued)

The contracts called for the Company to receive or make payments based upon
the differential between the hedge price and the market gas price, as defined
in the contracts, for the notional quantity.  During the year ended December
31, 2002, the Company realized approximately $32,000 in losses on the three
commodity swaps which have been included in natural gas revenues in the
accompanying consolidated statement of operations and in cash provided by
operating activities in the accompanying consolidated statement of cash flows.
At December 31, 2002, the Company has an approximately $125,000 derivative
liability related to the financial hedges.

Revenue Recognition

The Company recognizes sales of oil when the product is delivered and
recognizes enhancement service revenue when the services are performed.  The
Company uses the sales method for recording natural gas sales.  This method
allows for recognition of revenue, which may be more or less than the
Company's share of pro-rata production from certain wells.  During the year
ended December 31, 2002 and the nine months ended December 31, 2001, the
Company had minimal gas sales and therefore, there were no material natural
gas imbalances.

Environmental Costs

The Company expenses, on a current basis, recurring costs associated with
managing hazardous substances and pollution in ongoing operations.  The
Company also accrues for costs associated with the remediation of
environmental pollution when it becomes probable that a liability has been
incurred and its proportionate share of the amount can be reasonably
estimated.

Management Estimates

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and 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.  Actual
results could differ from those estimates.  Significant estimates with regard
to the consolidated financial statements include the estimate of proved oil
and gas reserve volumes and the related present value of estimated future net
cash flows.  See Note 17 for supplemental oil and gas information (unaudited).

Inventories

Inventories, consisting primarily of cement mix, sand, fuel and chemicals, are
stated at the lower of cost or market. Cost has been determined on the
first-in, first-out method.



                                   F-10


                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Property and Equipment

Depreciation and amortization are computed using the straight-line method over
the following estimated useful lives:

                  Assets                   Useful Lives
     ---------------------------------     ------------

     Buildings                               30 years
     Site improvements                       15 years
     Machinery, equipment and vehicles     5 - 10 years
     Office furniture and equipment        5 - 10 years

Oil and Gas Properties

The Company follows the full cost method of accounting for oil and gas
properties.  Accordingly, all productive and non-productive costs associated
with acquisition, exploration, and development of oil and gas reserves,
including directly related internal costs are capitalized.  The Company
capitalized $326,895 and $317,060 of internal costs during the year ended
December 31, 2002 and the nine months ended December 31, 2001, respectively.
Costs associated with production and general corporate activities are expensed
in the period incurred.

The Securities and Exchange Commission's full cost accounting rules prohibit
recognition of income in current operations for services performed on oil and
natural gas properties in which the Company has an interest, but rather
require amounts to be treated as a reimbursement of costs with any excess of
fees over costs credited to the full cost pool and recognized through lower
cost amortization only as production occurs.

All capitalized costs of oil and gas properties, including the estimated
future costs to develop proved reserves, are amortized on the
unit-of-production method using estimates of proved reserves.  Investments in
unproved properties and major development projects are not amortized until
proved reserves associated with the projects can be determined or until
impairment occurs.  If the results of an assessment indicate that the
properties are impaired, the amount of the impairment is added to the
capitalized costs to be amortized.

In addition, the capitalized costs are subject to a "ceiling test," which
basically limits such costs to the aggregate of the "estimated present value,"
discounted at a 10-percent interest rate of future net revenues from proved
reserves, net of estimated future income taxes, based on current economic and
operating conditions, plus the lower of cost or fair market value of unproved
properties.







                                 F-11




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Oil and Gas Properties (continued)

Depreciation and depletion of proved oil and gas properties is computed on the
units-of-production method based upon estimates of proved reserves with oil
and gas being converted to a common unit of measure based on their relative
energy content.  Unproved oil and gas properties, including any related
capitalized interest expense, are not amortized, but are assessed for
impairment either individually or on an aggregated basis.

Sales of proved and unproved properties are accounted for as adjustments of
capitalized costs with no gain or loss recognized, unless such adjustments
would significantly alter the relationship between capitalized costs and
proved reserves of oil and gas, in which case the gain or loss is recognized
in income.  Abandonments of properties are accounted for as adjustments of
capitalized costs with no loss recognized.

Capitalized Interest

The Company capitalizes interest costs to oil and gas properties on
expenditures made in connection with exploration and development projects that
are not subject to current amortization. Interest is capitalized only for the
period that activities are in progress to bring these projects to their
intended use.  Total interest costs incurred for the year ended December 31,
2002 and the nine months ended December 31, 2001 were $1,612,469 and
$2,321,056 (including a $1,793,426 charge to interest expense upon payoff of
certain debt), respectively.  Interest costs capitalized were $1,010,119 and
$454,901 for the year ended December 31, 2002 and nine months ended December
31, 2001, respectively.

Long-lived Assets

Long-lived assets to be held and used in the Company's business are reviewed
for impairment whenever events or changes in circumstances indicate that the
related carrying amount may not be recoverable.  When the carrying amount of
the long-lived assets exceeds the discounted expected future cash flows, the
Company records an impairment.  The Company recorded a $600,050 impairment
during the last quarter of the nine months ended December 31, 2001 to write
other assets down to estimated net realizable value.  No impairment was
recorded during the year ended December 31, 2002.

Transportation Costs

The Company accounts for transportation costs under Emerging Issues Task Force
("EITF") 00-10, "Accounting for Shipping and Handling Fees and Costs," whereby
amounts paid for transportation costs are classified as operating expense and
not netted against natural gas revenues.





                                   F-12




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Intangible Assets

Effective January 1, 2002, the Company adopted Financial Accounting Standard
No. 142 (SFAS No.142) "Goodwill and Other Intangible Assets".  As a result,
the Company no longer amortizes goodwill, but instead, reviews goodwill for
impairment on at least an annual basis.  The adoption of SFAS No. 142 had no
effect on the Company's earnings at January 1, 2002.  Amortization costs for
the nine months ended December 31, 2001 was $8,438.

Other intangibles are recorded at cost and are amortized on the straight-line
basis over the contractual or estimated useful life of the asset or the term
of the loan, which range from 1 to 5 years.

Amortization of loan costs associated with debt obtained in connection with
exploration and development projects that are not subject to current
amortization, is capitalized to oil and gas properties.  Amortization of loan
costs is capitalized only for the period activities are in progress to
bring these projects to their intended use.  Total amortization costs incurred
and capitalized for the year ended December 31, 2002 and the nine months ended
December 31, 2001 were $2,023,373 and $147,239, respectively.

Per Share Information

Basic earnings (loss) per common share are computed as net income (loss)
divided by the weighted average number of common shares outstanding during the
period.  Diluted earnings (loss) per common share is computed as net income
(loss) divided by the weighted average number of common shares and potential
common shares, using the treasury stock method, outstanding during the period.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash generally consists of cash on hand
and demand deposits with financial institutions.  At times, the Company
maintains deposits in financial institutions in excess of federally insured
limits.  Management monitors the soundness of the financial institutions and
feels the Company's risk is negligible.

The Company considers all highly liquid investments with an original maturity
of three months or less to be a cash equivalent.











                                   F-13




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Investment Securities

Investment securities that are held for short-term resale are classified as
trading securities and carried at fair value.  Debt securities that management
has the ability and intent to hold to maturity are classified as
held-to-maturity and carried at cost, adjusted for amortization of premium and
accretion of discounts using methods approximating the interest method.  Other
marketable securities are classified as available-for-sale and are carried at
fair value, based on quoted market prices.  Unrealized gains and losses on
securities available-for-sale are reported as a component of comprehensive
income, net of applicable income taxes.  Costs of securities sold are
recognized using the specific identification method.

Stock Options

The Company applies Accounting Principles Board Opinion No. 25 "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
plan. Accordingly, no compensation cost has been recognized for options
granted to employees under the stock option plan.  Had compensation costs for
employee options under the Company's plan been determined based upon the fair
value at the grant date for awards under the plan consistent with the
methodology prescribed under Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation", the Company's net income
(loss) and earnings (loss) per share would have been as follows (Note 8):

<TABLE>
<CAPTION>
                                                                      For the Year    For the Nine
                                                                         Ended        Months Ended
                                                                      December 31,    December 31,
                                                                          2002            2001
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Net income (loss) as reported                                         $ (1,556,866)   $ 2,540,395
Deduct:  Total sock-based employee compensation expense,
determined under fair value based method for all awards, net of tax     (2,448,341)      (684,265)
                                                                      ------------    -----------
Proforma net income (loss)                                            $ (4,005,207)   $ 1,856,130
                                                                      ============    ===========

Basic income (loss) per share as reported                             $       (.22)   $       .39
Diluted income (loss) per share as reported                           $       (.22)   $       .37
Basic income (loss) per share-proforma                                $       (.56)   $       .29
Diluted income (loss) per share - proforma                            $       (.56)   $       .27

</TABLE>

For options granted during the year ended December 31, 2002 and the nine
months ended December 31, 2001, the estimated fair value of the options
granted utilizing the Black-Scholes pricing model under the Company's plan was
based on a weighted average risk-free interest rate of 1.5% and 8.0%, expected
option life of 5 years, expected volatility of approximately 117% and 83% and
no expected dividends.

                                    F-14



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Comprehensive Income (Loss)

The Company has elected to report comprehensive income (loss) in the
consolidated statement of stockholders' equity.  Comprehensive income (loss)
is composed of net income (loss) and all changes to stockholders' equity,
except those due to investments by stockholders, changes in additional paid-in
capital and distributions to stockholders.

Income Taxes

Income taxes are provided for the tax effects of the transactions reported in
the consolidated financial statements and consist of taxes currently due plus
deferred taxes related primarily to temporary differences between the tax and
financial basis of property and equipment and other assets, oil and gas
properties, and net operating loss carry forwards using enacted tax rates in
effect for the year in which the differences are expected to reverse.

The deferred tax assets and liabilities represent the future tax return
consequences of those temporary differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.  The
measurement of deferred tax assets is reduced, if necessary, by the amount of
any tax benefits that are not expected to be realized based on available
evidence that it is more likely than not to be realized in the form of a
deferred tax valuations allowance.

Recently Issued Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations."  SFAS No. 143 requires the fair value of a liability for an
asset retirement obligation to be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made.  The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset.  SFAS No. 143 is effective for years beginning after June
15, 2002.  The Company is currently evaluating what effect the adoption of
this statement will have on the Company's consolidated financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities."  SFAS No. 146 addresses accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring)."  SFAS No. 146 requires that a
liability for a cost associated with an exit or disposal activity be
recognized and measured initially at fair value when the liability is
incurred.  SFAS No. 146 is effective for exit or disposal activities that are
initiated after December 31, 2002, with early application encouraged.   The
Company does not expect the adoption of this statement to have a material
effect on the Company's consolidated financial statements.



                                    F-15



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 1 - Organization and Summary of Significant Accounting Policies
(continued)

Recently Issued Accounting Pronouncements (continued)

In November 2002, the FASB published interpretation No, 45 "Guarantor's
Accounting and Disclosure requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others".  The Interpretation expands on the
accounting guidance of Statements No. 5, 57, and 107 and incorporates
without change the provisions of FASB Interpretation No. 34, which is being
superseded.  The Interpretation elaborates on the existing disclosure
requirements for most guarantees, including loan guarantees such as standby
letters of credit. It also clarifies that at the time a company issues a
guarantee, the company must recognize an initial liability for the fair value,
or market value, of the obligations it assumes under that guarantee and must
disclose that information in its interim and annual financial statements.  The
initial recognition and initial measurement provisions apply on a prospective
basis to guarantees issued or modified after December 31, 2002, regardless of
the guarantor's fiscal year-end. The disclosure requirements in the
Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002.  The Company does not expect the
adoption of this statement to have a material effect on the Company's
consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition and Disclosure".  This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation" to provide alternative methods of
transition for an entity that voluntarily changes to the fair value method of
accounting for stock-based compensation.  In addition, SFAS 148 amends the
disclosure provision of SFAS 123 to require more prominent disclosure about
the effects of an entity's accounting policy decisions with respect to
stock-based employee compensation on reported net income.  The effective date
for this Statement is for fiscal years ended after December 15, 2002.  The
Company has adopted the disclosure requirements of SFAS 148 effective December
31 2002 in its consolidated financial statements.  The Company will continue
to account for stock-based compensation using the methods detailed in the
stock-based compensation accounting policy as described earlier.

Note 2 - Continued Operations and Realization of Assets

The Company's consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and liquidation of
liabilities in the ordinary course of business.  During 2002, the Company had
consolidated losses from operations of approximately $2,200,000, and
a working capital deficit at December 31, 2002 of approximately $3,100,000.

The Company also has minimum drilling obligations during fiscal year 2003 of
approximately $3,600,000 in order to maintain the Company's present leasehold
positions.  In addition, management estimates cash requirements of $1,100,000
for interest on notes and $1,300,000 for general corporate usage.  Thus, in
total, the Company has current minimum cash requirements in 2003 of
approximately $9,100,000 including the working capital deficit at December 31,
2002.


                                  F-16



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 2 - Continued Operations and Realization of Assets (continued)

Management's plans are to fund the $9,100,000 of minimum cash requirements
through its operations, through proceeds from the exercise of options and
warrants and/or proceeds from bridge loan or equity financing.  In order to
fund any additional or other capital expenditures above the minimum
requirements during 2003, the Company will be required to pursue additional
funding through potential conventional bank financing, the forward sale of its
oil and gas production, or through the public or private equity or debt
market.

Management believes the cash flow generated from operating activities along
with subsequent debt and equity financing should be sufficient to meet current
cash requirements.  However, the ability of the Company to achieve the
required operating results and additional funding cannot be assured.

During the first quarter of 2003, the Company realized approximately $708,000
of proceeds from the exercise of 107,150 common stock options and $1,000,000
from bridge loans.

The consolidated financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts or amounts
and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.

Note 3 - Property and Equipment

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

     Buildings, site costs and improvements      $     2,207,245
     Machinery, equipment and vehicles                15,158,783
     Office furniture and equipment                      239,058
                                                 ---------------
          Total cost                                  17,605,086
          Less accumulated depreciation               (7,290,018)
                                                 ---------------
          Net property and equipment             $    10,315,068
                                                 ===============

















                                 F-17

<PAGE>
                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 4 - Intangibles

Intangibles consist of the following at December 31, 2002:

     Loan costs                                  $    7,679,249
     Non-compete                                        300,000
     Goodwill                                           225,000
     Other                                               55,871
                                                 --------------
                                                      8,260,120
     Less accumulated amortization                   (2,960,239)
                                                 --------------

     Net intangibles                             $    5,299,881
                                                 ==============

Note 5 - Investment in Securities

In April 2001, the Company sold 225,000 shares of Evergreen stock for proceeds
of approximately $8,870,000 resulting in a gain of approximately $5,128,000.
A portion of the net proceeds was used to pay off long-term debt (Note 7).

At December 31, 2001, the Company had available for sale securities with a
fair value of $750,000.  Cost of the available for sale securities
approximated fair value at December 31, 2001.

During 2002, the Company sold the available for sale securities.  The Company
realized no material gain or loss on the transaction.

Note 6 - Oil and Gas Properties

Oil and gas properties consist of the following at December 31, 2002:

<TABLE>
<CAPTION>
                                                                Subject to     Not Subject to
                                                               Amortization     Amortization
                                                               ------------    --------------
<S>                                                            <C>             <C>

     Acquisition costs                                          $   795,976     $  6,935,464
     Development costs                                            2,658,981                -
     Exploration costs                                           15,956,888        6,241,386
                                                                -----------     -------------

          Total cost                                             19,411,845     $ 13,176,850
                                                                                =============

     Less accumulated depreciation, amortization and depletion     (304,418)
                                                                -----------

                                                                $19,107,427
                                                                ===========
</TABLE>



                                   F-18



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 6 - Oil and Gas Properties (continued)

From inception through December 31, 2002, the Company has capitalized the
following financing costs related to properties not subject to  amortization.
As these properties are developed, the costs are transferred to properties
subject to amortization:

Beneficial conversion feature related
 to the 8% subordinated convertible notes     $     1,165,500
Capitalized interest                                1,863,783
Capitalized amortization of loan costs              2,170,612
                                              ---------------

Total capitalized finance costs               $     5,199,895
                                              ===============

Properties Subject to Amortization

In July 2000 (original purchase) and subsequent periods (additional
purchases), the Company acquired 100% working interests and 82.5% net revenue
interests in leaseholds in the Greater Green River Basin of Wyoming
("Pipeline") for approximately $3,438,000.  The Company has incurred
approximately $15,132,000 in exploration and development costs through
December 31, 2002 to develop the Pipeline acreage.  Based on reserve analysis
performed by an independent petroleum engineer, the acquisition costs
associated with 3,040 acres of the 35,340 total acreage position and all
development and exploration costs incurred to date, totaling approximately
$12,484,000, on the 3,040 acres are subject to amortization.

In March 2000 (original purchase) and subsequent periods (additional
purchases), the Company acquired a 100% working interest and 80.0% net revenue
interests in leaseholds in the Greater Green River Basin of Wyoming
("LaBarge") for approximately $2,022,000.  The original lessor on a portion of
the acreage has a 30% participation election.  If the original lessor chooses
not to participate in the drilling and completion of a well, then the 100%
working interest and the approximately 80% associated net revenue interest
will remain with the Company until the well has generated earnings to recover
the well costs plus 300% non-consent penalty.  The Company has incurred
approximately $9,193,000 in exploration and development costs through December
31, 2002 to develop the LaBarge acreage.  Based on reserve analysis performed
by an independent petroleum engineer, the acquisition costs associated with
1,603 acres of the 29,523 total acreage position and all development and
exploration cash incurred to date, totaling approximately $6,066,000, on the
1,603 acres are subject to amortization.

The Company is required to perform certain Environmental Impact Study and
Assessments on the LaBarge and Pipeline properties. Management believes that
the results of these studies will not have a material impact on the continued
development of these properties.




                                 F-19



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 6 - Oil and Gas Properties (continued)

In February 2000, the Company acquired a 100% working interest in a property
in eastern Kansas, through a joint venture with an operator in which a former
director of the Company is a partner and operations manager.  The Company's
total investment in the property was approximately $1,100,000.  In addition,
during 2000, the Company acquired an active oil lease in the Owl Creek Field
in Woodson County, Kansas for $510,000.  Effective May 1, 2002, the Company
sold its interest in oil and gas properties in eastern Kansas for $180,000
cash and a $1,620,000 note receivable.  The note bears interest at 7.7%,
requires quarterly payments of $35,000, including interest and is due on
August 1, 2005.  The transaction resulted in a gain of approximately $244,000,
after consideration of other costs, which is recorded as a reduction in
capitalized oil and gas property costs under the full cost accounting method.

Properties Not Subject to Amortization

The Company has incurred approximately $2,943,000 and $1,833,000 of leasehold
costs and approximately $2,635,000 and $3,127,000 of exploration and
development costs on the Pipeline and LaBarge prospects, respectively, which
are not subject to amortization, as the costs incurred on the related acreage
have not yet resulted in proved reserves.  A significant portion of the
LaBarge exploration and development costs are anticipated to move to the
subject to amortization in the first quarter of 2003 when 5 wells which
started drilling in the fourth quarter 2002, begin production.  In addition,
the Company is required to complete six additional wells in order to meet its
drilling obligations under the development phase of the lease and maintain its
current leasehold position in the Pipeline project.  In order to complete six
additional wells, the Company will need to drill and complete three wells and
complete three other wells already drilled on the acreage. In addition during
2003, the Company has to complete three wells on the LaBarge project that have
already been drilled and incur costs to complete the pipeline.  The cost to
drill and complete these wells and pipeline is estimated to be approximately
$2,700,000.

During 2002, the Company acquired a working interest in leaseholds in the Sand
Wash Basin of Colorado and Wyoming for cash of approximately $755,000 and
notes totaling approximately $607,000 (Note 7).  The Company has incurred
initial exploration and development costs of $312,000.

In November 2001, the Company acquired a 31.25% working interest in an oil and
gas lease in Southwest, Kansas for approximately $122,000 and has incurred
exploration and development costs of approximately $79,000.  Included in the
initial cost was approximately $66,000 related to dry hole costs, which are
included in the full cost amortization calculation.

In November 2000, the Company acquired a 100% working interest in a coal bed
methane property in Northwestern Colorado for 81,600 shares of the Company's
common stock valued at approximately $226,000 and approximately $367,000 cash.
The shares were valued at approximately $2.77 per share based on the market
value of the common stock on the date of purchase.  The Company has incurred
approximately $149,000 of additional leasehold costs to acquire additional
acreage and has capitalized exploration and development costs of approximately
$88,000 as of December 31, 2002.  The lease requires the Company to drill a
total of 5 wells within the first 5 years of the lease.  No wells have been
drilled to date.

                                   F-20


                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 6 - Oil and Gas Properties (continued)

Properties Not Subject to Amortization (continued)

These properties are not subject to amortization and are being, or will be
developed, completed and put into production when gas is located in apparent
reasonable quantities.  The geological structures on the Wyoming and Colorado
properties are such that the amount of reserves cannot be evaluated with the
engineering certainty necessary to be judged proven reserves.  As drilling of
a specific well is finished, a determination is made to complete the well and
begin production or treat the well as unsuccessful.  Costs of successful wells
are added to the full cost amortization calculation when the property is
proven.  Costs of unsuccessful wells are added to the full cost amortization
calculation when that determination is made.

The Company reviews unproved properties for impairment on at least an annual
basis.  Upon impairment, the Company adds the amount of the impairment to the
full cost amortization calculation.  No impairment has been recorded during
the year ended December 31, 2002 and the nine months ended December 31, 2001.
Any cost related to exploratory dry wells is included in the full cost
amortization base when that determination is made.  Any costs associated with
geophysical and geological costs that are not associated with specific
unproven properties are included in the full cost amortization base as
incurred.

The per barrel amount of depreciation, depletion and amortization incurred
during the year ended December 31, 2002 and nine months ended December 31,
2001 was $1.11 and $2.56, respectively.

Recovery of the above acquisition and development costs is dependent on a
variety of factors including actual production results and market conditions.

Note 7 - Long-Term Debt


<TABLE>
<CAPTION>
                                                                                December 31,
                                                                        ---------------------------
                                                                             2002           2001
                                                                        ------------   ------------
<S>                                                                     <C>            <C>
8% subordinated convertible notes payable, convertible into
 848,600 shares of Company common stock.  Due June 13, 2006.            $  4,243,000   $  6,475,000

7% subordinated convertible notes payable, convertible into
 1,453,913 shares of Company common stock.  Due April 22,
  2007.                                                                   12,540,000              -


Bridge loan with related party; interest at bank prime plus 1.0%
 (totaling 5.25% at December 31, 2002); due and payable on
 January 5, 2004; uncollateralized.                                        3,000,000              -




                                F-21




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 7 - Long-Term Debt (continued)

                                                                                December 31,
                                                                        ---------------------------
                                                                           2002           2001
                                                                        ------------   ------------
Note payable to seller (for a 50% interest in an airplane), with
interest at Wall Street prime due on a quarterly basis.  The
Company is required to make annual principal payments equal to
5% of the current outstanding principal until paid in full. The
seller can call the note if the bank calls their note for the original
purchase of the airplane.  The note is collateralized by the 50%
interest in the airplane (Note 16).                                        1,489,125      1,567,500

$2,000,000 revolving credit note, cross-collateralized by
substantially all the assets of the oil and gas service subsidiary's
assets; with interest at prime plus 1.0% (totaling 5.25% at
December 31, 2002); due in December 2004.                                      6,506              -

$2,900,000 term loan with interest at prime plus 1.0% (totaling
5.25% at December 31, 2002), due in monthly installments of
$80,626 plus interest, through December 2004.  The note is cross-
collateralized by substantially all the assets of the oil and gas
service subsidiary.                                                        1,960,651              -

$1,000,000 term loan with interest at prime plus 1.0% (totaling
5.25% at December 31, 2002), due in monthly installments of
$15,626 plus interest, through December 2004.  The note is cross-
collateralized by substantially all the assets of the oil and gas
service subsidiary.                                                          570,000              -

Notes payable to sellers of oil and gas properties without interest,
one note for $397,500 paid in full in January 2003 and other note
for $209,736 due in May 2003.                                                607,236              -

Various fixed rate notes collateralized by vehicles and equipment
with interest rates ranging from 7.25% to 9.5%; payable in
monthly installments of principal and interest totaling $18,105,
with payments due between June 2002 and August 2007.                      1,228,519       1,217,486

Note payable to a bank with interest at Wall Street Prime plus
..25% (totaling 4.5% at December 31, 2002); payable in monthly
installments of $6,394 including interest through November 2006;
collateralized by real property.                                            249,081         298,474

Note payable to a bank with interest at 9.25%, payable in monthly
installments of $4,883 including interest through December 2011;
collateralized by real estate.                                              335,035         358,998








                                  F-22



<PAGE>
                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 7 - Long-Term Debt (continued)


                                                                                December 31,
                                                                        ---------------------------
                                                                           2002           2001
                                                                        ------------   ------------

Capital leases, with monthly installments totaling $5,064,
including interest and expiring through November 2006.                       245,197        274,377

Notes payable to an unrelated individual and an unrelated third
party, with interest at 8%.  Paid in full in 2002.                                 -        404,878

Notes payable to seller.  Paid in full in 2002.                                    -        449,851

Term note.  Paid in full in January 2002.                                          -      1,023,061

$1,000,000 revolving credit note.  Paid in full in 2002.                           -        764,735

Various notes payable and capital leases.  Paid in full in 2002.                   -        929,047
                                                                        ------------   ------------
          Total long-term obligations                                     26,474,350     13,763,407
          Less current portion                                            (2,227,194)    (3,342,193)
                                                                        ------------   ------------
                                                                        $ 24,247,156   $ 10,421,214
                                                                        ============   ============
</TABLE>

Maturities of long-term obligations are as follows:
<TABLE>
<CAPTION>

                                            Long-Term           Capital
   Years Ending December 31,                   Debt             Leases             Total
   -------------------------             ---------------    -------------     ---------------
   <S>                                   <C>                <C>               <C>
     2003                                $     2,182,579    $      60,768     $     2,243,347
     2004                                      4,821,163           60,768           4,881,931
     2005                                        447,298           60,768             508,066
     2006                                      4,774,807          110,000           4,884,807
     2007                                     12,664,056                -          12,664,056
     Thereafter                                1,339,250                -           1,339,250
     Less amount representing interest                 -          (47,107)            (47,107)
                                         ---------------    -------------     ---------------
     Total principal                          26,229,153          245,197          26,474,350
     Less current portion                     (2,182,579)         (44,615)         (2,227,194)
                                         ---------------    -------------     ---------------

                                         $    24,046,574    $     200,582     $    24,247,156
                                         ===============    =============     ===============
</TABLE>

Included in equipment in the accompanying consolidated balance sheet as of
December 31, 2001 are assets held under capital leases in the amount of
approximately $297,000 net of accumulated amortization of approximately
$41,000.


                                   F-23



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 7 - Long-Term Debt (continued)

On November 25, 2002, the Company issued five-year options to purchase 320,000
shares of the Company's common stock at $8.75 per share when it obtained a
$3,000,000 one year bridge loan from a related party with an annual interest
rate at Wall Street prime plus 1.0% in order to pay outstanding payable
associated with the development of its coal bed methane properties.  The
Company capitalized loan costs of $2,281,718 related to the fair value of the
options as determined using the Black-Scholes pricing method assuming a five
year life, weighted average risk-free interest rate of 1.5%, expected
volatility of 125.20% and no expected dividend yield.  In March of 2003, the
note was extended to January of 2004.

Effective April 22, 2002, the Company sold 12,540,000 in 7% Subordinated
Convertible Notes in a private placement in which C.E. Unterberg, Towbin acted
as the placement agent.  A director of the Company is also an officer with
C.E. Unterberg, Towbin.  In addition, to the extent a holder of the Company's
8% Subordinated Convertible Note converted any of their interest to stock, and
purchased 7% Subordinated Convertible Notes, these parties would be related
parties.  Interest on the notes accrues at a rate of 7% per annum and is
payable in arrears on each April 15 and October 15 commencing October 15,
2002.  The Company can elect to pay the accrued interest in cash or in the
form of additional notes.  The additional notes are to be issued in increments
of $1,000 with residual interest due in cash.  The notes are convertible to
one share of common stock at $8.625 per share and mature on April 22, 2007.
The notes are subordinated to substantially all the Company's other existing
or future notes payable, capital leases, debentures, bonds or other such
securities.  In addition, after April 22, 2004, the Company can redeem a
portion of the notes as follows:

                              Percentage of
     Year                       Principal
     ----                     -------------

     2004                         104.2%
     2005                         102.8%
     2006 and thereafter          101.4%


If, at any time after April 22, 2003, the Company's stock price exceeds 300%
of the conversion price for 20 consecutive days, the Company can redeem a
portion of the notes for the principal balance and accrued interest
outstanding.  If there is a change in control of the Company, the Company must
redeem the notes at the rates noted above if after April 22, 2004 or 101% of
principal plus accrued interest if before April 22, 2004.

Subsequent to December 31, 2002, the holders of $500,000 of 7% subordinated
convertible notes converted the debt into 57,971 shares of the Company's
common stock.



                                F-24




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 7 - Long-Term Debt (continued)

The Company incurred costs of $865,505 associated with the placement, which
has been capitalized as loan costs and is being amortized over the term of the
notes.  The Company also issued warrants to purchase 200,000 shares of common
stock at $9.058.  The Company capitalized additional loan costs of $1,386,044
related to the fair value of the warrants as determined using the
Black-Scholes pricing method assuming a five year life, weighed average
risk-free interest rate of 7%, expected volatility of 98.30% and no expected
dividend yield.  Proceeds from the offering were used in the development of
the Company's coal bed methane properties.

As the conversion feature of the convertible notes was above the market value
of the stock on the date of issue, the Company did not record a beneficial
conversion feature.

On March 7, 2002, the Company issued five-year options to purchase 250,000
shares of common stock at $7.34 per share when it obtained a $2,000,000 bridge
loan from a related party, with an annual interest rate of 8% in order to pay
outstanding payables associated with the development of its coal bed methane
properties.  The Company capitalized loan costs of $1,347,728 related to the
fair value of the options as determined using the Black-Scholes pricing method
assuming a five year life, weighted average risk-free interest rate of 8%,
expected volatility of 89.55% and no expected dividend yield.  The loans were
paid April 24, 2002 with proceeds from the sale of the 7% subordinated
convertible notes.

In January 2002, the Company refinanced a portion of its long-term debt.  The
Company entered into a financing agreement whereby the Company executed the
following:

     - A $2,000,000 revolving credit note cross-collateralized by
       substantially all the Company's assets except oil and gas properties;
       with interest at prime plus 1.0%.  The note is due December 31, 2004.
     - An approximately $2,900,000 term note with interest at prime plus 1.0%,
       due in monthly installments of $80,626 plus interest, through December
       2004.  The note is cross-collateralized by substantially all the assets
       of the Company except oil and gas properties.
     - A $1,000,000 capital expenditure line with interest at prime plus 1.0%,
       due in monthly installments of $15,626 plus interest through December
       31, 2004 when unpaid principal and interest are due.  The note is
       cross-collateralized by substantially all the assets of the Company
       except oil and gas properties.  The Company borrowed $720,000 under the
       note.

The notes require the Company to comply with certain financial and restricted
covenants.  The notes are also guaranteed by an officer of the Company up to
$1,000,000.




                                 F-25




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 7 - Long-Term Debt (continued)

Effective June 13, 2001, the Company sold 6,475,000 in 8% Subordinated
Convertible Notes in a private placement in which C.E. Unterberg, Towbin acted
as the placement agent.  Interest on the notes accrues at a rate of 8% per
annum and is payable in arrears on each December 15 and June 15 commencing
December 15, 2001.  The notes are convertible to one share of common stock at
$5 per share and mature on June 13, 2006.  The notes are subordinated to
substantially all the Company's other existing or future notes payable,
capital leases, debentures, bonds or other such securities.  In addition,
after June 13, 2002, the Company can redeem a portion of the notes as follows:

                                   Percentage of
                  Year               Principal
                  ----             -------------

            2003                       104.8%
            2004                       103.2%
            2005 and thereafter        101.6%

If, at any time after June 13, 2003, the Company's stock price exceeds 300% of
the conversion price for 20 consecutive days, the Company can redeem a portion
of the notes for the principal balance and accrued interest outstanding.  If
there is a change in control of the Company, the Company must redeem the notes
at the rates noted above if after June 13, 2003, or 101% of principal plus
accrued interest if before June 13, 2003.

During 2002, the holders of $2,232,000 of 8% subordinated convertible notes
converted the debt and accrued interest into 454,974 shares of the Company's
common stock.

Subsequent to December 31, 2002, the holders of $1,240,000 of 8% subordinated
convertible notes converted the debt into 248,000 shares of the Company's
common stock.

The Company incurred costs of $470,278 associated with the placement, which
has been capitalized as loan costs and is being amortized over the term of the
notes.  The Company also issued warrants to purchase 220,000 shares of common
stock at $5.99.  The Company capitalized additional loan costs of $924,717
related to the fair value of the warrants as determined using the
Black-Scholes pricing method assuming a five year life, weighted average
risk-free interest rate of 8%, expected volatility of 80.66% and no expected
dividend yield.  Proceeds from the offering were used in the development of
the Company's coal bed methane properties.

As the conversion feature of the convertible notes was below the market value
of the stock on the date of issue, the Company recorded a discount of
$1,165,500 related to the intrinsic value of the beneficial conversion
feature.  The notes are immediately convertible and therefore, the discount
was immediately amortized.  The Company capitalized the amortization of the
beneficial conversion feature into oil and gas properties not subject to
amortization as the debt was issued in order to continue exploration and
development of projects that were not currently subject to amortization, and
was not used for general operating purposes.


                                  F-26



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 7 - Long-Term Debt (continued)

During March and April 2000, the Company entered into financing agreements
collateralized by 225,000 shares of the Evergreen stock held by the Company.
The Company borrowed a total of approximately $4,000,000.  In April 2001, the
Company sold the shares of Evergreen stock used as collateral for the
borrowing and paid off the related debt.  Under the terms of the financing
agreements, the amount due was directly related to the market price of the
Evergreen stock at the date of sale.  At the time the Company sold the stock,
the resulting derivative liability was approximately $1.8 million dollars
based on the market price of the Evergreen stock.  The pay-off of the debt
resulted in an approximately $1.8 million charge to interest expense.  Costs
associated with paying off the loans were capitalized into oil and gas
properties not subject to amortization as the net proceeds were used for
exploration and development projects that were not subject to current
amortization.

Note 8 - Common Stock

Stock Split

In May 2002, the Company affected a 2:1 stock split effective May 13, 2002.
All shares and per share amounts have been restated to give effect to the
stock split.

Warrants

The Company, in conjunction with a public stock offering in September 1988,
issued Class A, Class B and underwriter warrants to purchase 425,918 shares of
common stock.  The 223,496 Class A warrants have expired.  During 2002,
163,264 shares of common stock were issued upon the exercise of Class B
warrants for proceeds of $977,911.  The remaining 39,158 Class B warrants
expired in June 2002.

During 2001, in connection with the sale of $6,475,000 8% subordinated
convertible notes, the Company granted 220,000 warrants to purchase the
Company's common stock at $5.99 per share.  The warrants expire in June 2006.

During 2002, in connection with the sale of $12,540,000, 7% subordinated
convertible notes, the Company granted 200,000 warrants to purchase the
Company's common stock at $9.058 per share.  The warrants expire in April
2007.

Options

The Company has adopted stock option plans containing both incentive and
non-statutory stock options. All options allow for the purchase of common
stock at prices not less than the fair market value of such stock at the date
of grant. The option price under the incentive stock option provisions of
the plans, if the optionee owns more than 10% of the total combined voting
power of all classes of the Company's stock, will not be less than 110% of the
fair market value of such stock at the date of grant.


                                   F-27


                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 8 - Common Stock (continued)

Options (continued)

Options granted under the plans become exercisable immediately or as directed
by the Board of Directors and generally expire five or ten years after the
date of grant, unless the employee owns more than 10% of the total combined
voting power of all classes of the Company's stock, in which case they
must be exercised within five years of the date of grant. Pursuant to the
plans, an aggregate of 1,991,666 shares of common stock are available for
issuance upon the exercise of such options.  The Company granted 345,000 and
330,000 to employees under the Plans during the year ended December 31, 2002
and the nine months ended December 31, 2001, respectively.

In connection with obtaining $5,000,000 of bridge loans in March and November
of 2002, the Company granted 570,000, 5-year options to purchase the Company's
common stock at $7.34 (250,000 of the options) or $8.75 (320,000 of the
options) per share (Note 7).

A summary of stock option and warrant activity is as follows:


<TABLE>
<CAPTION>
                                                Option/Warrant   Weighted Average
                                  Number of         Price             Price
                                   Shares         Per Share         Per Share
                                  ---------     ---------------  ----------------
<S>                               <C>           <C>                 <C>
Outstanding, March 31, 2001       1,237,172     $ 1.50 - $ 6.00      $ 3.12

Granted                             550,000       5.00 -   5.99        5.39
Canceled or forfeited               (32,300)      1.75 -   3.81        2.22
Exercised                           (65,350)      1.50 -   3.81        1.93
                                  ---------     ---------------      ------

Outstanding, December 31, 2001    1,689,522       1.50 -   6.00        3.91

Granted                           1,115,000       7.00 -   9.06        8.47
Canceled or forfeited               (45,358)      3.81 -   6.00        3.94
Exercised                          (588,264)      1.50 -   6.00        3.31
                                  ---------     ---------------      ------

Outstanding, December 31, 2002    2,170,900     $ 1.50 -   9.06      $ 6.38
                                  =========     ===============      ======
</TABLE>








                                      F-28





                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 8 - Common Stock (continued)

Options (continued)

<TABLE>
<CAPTION>
                          Number       Weighted
                        Outstanding     Average      Weighted      Number         Weighted
        Range of            at         Remaining     Average    Exercisable at    Average
        Exercise        December 31,   Contractual   Exercise    December 31,     Exercise
         Prices            2002          Life         Price         2002            Price
     -------------      ------------   -----------   --------   --------------    --------
     <S>                <C>            <C>           <C>        <C>               <C>
     $ 1.50                 72,000       2 years     $  1.50        72,000        $   1.50
     $ 1.50 - 3.81         435,900       3 years     $  3.10       435,900        $   3.10
     $ 5.00 - 5.99         538,000       4 years     $  5.40       378,000        $   5.58
     $ 5.00 - 9.06       1,125,000       5 years     $  8.44       781,000        $   6.01
                         ---------                               ---------
                         2,170,900                               1,666,900
                         ---------                               ---------
</TABLE>


Subsequent to December 31, 2002, 107,150 options were exercised for proceeds
of approximately $708,000.


Note 9 - Income Taxes

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                     For the Year    For the Nine
                                                       Ended         Months Ended
                                                     December 31,    December 31,
                                                        2002            2001
                                                     ------------    ------------
<S>                                                  <C>             <C>
Current income tax expense                           $         -     $         -
Deferred income tax expense (benefit)                 (1,226,874)      1,590,056
Change in deferred tax asset valuation allowance          82,846               -
                                                     ------------    -----------

Total income tax expense (benefit)                   $ (1,144,028)   $ 1,590,056
                                                     ============    ===========
</TABLE>









                                   F-29



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 9 - Income Taxes (continued)

The effective income tax rate varies from the statutory federal income tax
rate as follows:


                                 For the Year     For the Nine
                                    Year          Months Ended
                                 December 31,     December 31,
                                    2002             2001
                                 ------------     ------------

Federal income tax rate               (34)%               34%
State income tax rate                  (6)                 6
Other permanent differences             1                 (1)
Change in valuation allowance          (3)                 -
                                 ---------        ----------

Effective tax rate                    (42)%               39%
                                 =========        ==========

The significant temporary differences and carry forwards and their related
deferred tax asset (liability) and deferred tax asset valuation allowance
balances as of December 31, 2002 are as follows:

Deferred tax assets
     Accruals and impairment              $     252,000
     Net operating loss carryforward          4,601,000
     Permanent differences                      202,000
     Other                                       18,000
                                          -------------
     Gross deferred tax assets                5,073,000
                                          -------------

Deferred tax liabilities
     Intangible drilling costs                3,191,000
     Property and equipment                     682,000
                                          -------------
     Gross deferred tax liabilities           3,873,000
                                          -------------
     Net deferred tax asset                   1,200,000
          Less valuation allowance           (1,200,000)
                                          -------------

Deferred tax asset                        $           -
                                          =============

For income tax purposes, the Company has approximately $12,000,000 of net
operating loss carry forwards expiring in various years through 2023.

During 2002, the Company realized certain tax benefits related to stock option
plans in the amount of $232,000.  Such benefits were recorded as a deferred
tax asset as they increased the Company's net operating losses and an increase
in additional paid in capital.  The recognition of the valuation allowance
offset the impact of this benefit.

                                  F-30


                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 9 - Income Taxes (continued)

The Company has provided for a valuation allowance of $1,200,000 due to the
uncertainty of realizing the tax benefits from its net operating loss
carryforwards.

Note 10 - Commitments and Contingencies

In June 2001, the Company entered into a long-term gas gathering contract,
which expires in December 2008.  Under the contract, the Company will pay gas
gathering fees per MCF delivered.  The Company is obligated to pay a fee of
$.40 per MCF on the first 3,350,000 MCF and $.25 per MCF thereafter.
Additionally, the Company has an annual volume commitment for the first 3
years starting September 1, 2001.  The Company's minimum volume for the first
three years is (i) Year one 600,000 MCF, (ii) Year two 1,500,000 MCF, and
(iii) Year three 1,250,000 MCF.  If the Company exceeds these minimums in a
year, the excess reduces the following year's commitment.  If the Company does
not meet the minimum in a year, the shortfall is added to the following years
and at the end of the three years, the Company has to pay additional costs for
the shortfall.  Through December 31, 2002, the Company had delivered
approximately 757,000 MCF.  Management does not believe there will be a
contract shortfall and therefore, anticipates no additional costs under the
contract.

The Company has certain drilling commitments as described further in Note 6.

During 2002, the Company entered into an executive severance agreement with
its Chief Executive Officer ("CEO").  If there is a change of control or if
the CEO is terminated without cause through December 31, 2003, then the CEO is
entitled to compensation as follows:

     1.     Two times annual base salary.
     2.     An amount equal to the bonus received for the preceding year.
     3.     Accrued and unpaid salary and benefits.
     4.     Continue all insurance coverage for two years.
     5.     Other employee benefits.

The Company's oil and gas operations are subject to various Federal, state and
local laws and regulations.  The Company could incur significant expense to
comply with new or existing laws and non-compliance could have a material
adverse effect on the Company's operations.

Note 11 - Retirement Plan

The Company has a 401(k) plan covering substantially all of the employees of
the oil and gas production enhancement service division.  There were no
Company contributions made to the plan during the year ended December 31, 2002
and the nine months ended December 31, 2001.






                                  F-31




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 12 - Industry Segments

The Company reports segment information in accordance with Financial
Accounting Standards Board Statement No. 131.  This Statement requires
disclosure of information related to certain operating segments of the
Company.

The Company's operations have been classified into two industry segments:
(i) Oil Field Services; and (ii) Oil and Gas Production.  The Oil Field
Services segment of the Company is directed at maintaining and enhancing
production obtained from oil and gas wells and currently has operations in
Kansas, Oklahoma, and Wyoming.  The Oil and Gas Production segment of
the Company has acquired interests in undeveloped leasehold in Wyoming,
Colorado and Kansas of which a portion have been developed into producing
properties.


<TABLE>
<CAPTION>
                                     Oil Field      Oil & Gas        Corporate
                                     Services       Production       and Other      Consolidated
                                   ------------     -----------     -----------     ------------
<S>                                <C>              <C>             <C>             <C>
Net sales
December 31, 2001 (nine months)    $  9,853,624     $ 1,759,095     $     7,724     $ 11,620,443
December 31, 2002                     8,570,631       2,367,713          13,036       10,951,380

Depreciation, amortization,
 depletion and impairment
December 31, 2001 (nine months)         842,694         136,649         684,350        1,663,693
December 31, 2002                     1,485,495         273,936         257,835        2,017,666

Operating income (loss)
December 31, 2001 (nine months)       2,163,119         143,118        (864,508)       1,441,729
December 31, 2002                        37,285        (299,079)     (1,926,879)      (2,188,673)

Identifiable assets, net
December 31, 2001 (nine months)      10,253,955       8,393,680       4,449,457       33,097,092
December 31, 2002                     9,967,770      35,566,847       7,595,652       53,130,269

Capital expenditures
December 31, 2001 (nine months)       2,524,719       7,982,573           7,710       10,515,002
December 31, 2002                     1,561,357      14,695,044         865,505       17,121,906

</TABLE>

Note 13 - Significant Customers

During the nine months ended December 31, 2001, the Company had sales to two
unrelated third parties of approximately $2,640,000, representing
approximately 23% of net sales.  During the year ended December 31, 2002, the
Company had sales to one unrelated third party of approximately $1,569,000,
representing approximately 14% of net sales.  In addition, during 2002, the
Company sold 89% of its oil and gas to three companies.  Receivables
outstanding from the December 31, 2002 and 2001 significant customer sales
were approximately $586,000 and $107,000, respectively.


                               F-32



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements



Note 14 - Fair Value of Financial Instruments

The carrying value of the Company's cash balance, accounts receivable,
accounts payable and accrued expenses represents the fair value of the
accounts as of December 31, 2002.  The fair value of the Company's long-term
debt with financial institutions and equipment financing companies approximate
the carrying value because (i) interest rates are variable or (ii) were
executed at rates comparable to current rates for similar notes.  The fair
value of the Company's other long-term debt obligations cannot be determined
due to the nature of the transactions, which created the debt, and comparable
market value information is not readily determinable without incurring
excessive costs.

Note 15 - Earnings Per Share

At December 31, 2002, all potential Company shares are anti-dilutive.  At
December 31, 2001, the following shows the amounts used in computing earnings
per share and the effects on income and the weighted average number of shares
of dilutive potential common stock:

<TABLE>
<CAPTION>
                                                          Weighted
                                                          Average
                                           Income       Common Shares   Earnings
                                          Numerator      Denominator    Per Share
                                          ---------     -------------   ----------
<S>                                       <C>           <C>             <C>
Basic earnings per share (December 31,
2001)
     Income available to common
      stockholders                        $2,540,395      6,501,104     $     .39
                                                                        =========

      Plus: impact of assumed conversion
       of warrants and options                     -        455,816
      Impact of assumed conversion of
       8% subordinated convertible
       notes                                       - *        9,002
                                          ----------      ---------

Diluted earnings per share                $2,540,395      6,965,922    $     .37
                                          ==========      =========    =========

*  Interest on 8% subordinated convertible notes was capitalized.
</TABLE>

As of December 31, 2002 and 2001, the impact of 4,473,413 and 344,090,
respectively, of potential common shares were not included because their
effect was anti-dilutive.






                                 F-33




                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 16- Subsequent Events

In January 2003, the Company borrowed $750,000 from 4 related parties, with
interest at 5.25% and principal and interest due January 5, 2004.  In
connection with these notes, the Company will grant 150,000 5-year options to
purchase the Company's common stock at $8.75 per share.

In January 2003, the Company entered into a new $2,617,975 note payable for a
50% interest in a new airplane.  The former airplane note was cancelled with
the equity from that note applied against the new note.  The new note requires
quarterly interest payments at the floating rate in effect for the seller
and an annual principal payment equal to 5% of the current outstanding
principal balance.  The new note is collateralized by the 50% interest in the
new plane.

During 2003, the Company entered into a commodity price swap for 3,500 MMBTU
per day from April 1, 2003 to March 31, 2004 at a hedge price of $4.71 per
MMBTU.

In March 2003, the Company entered into a $250,000 note agreement with a bank.
The note bears interest at 6.25% and is due in 10 monthly installments of
$25,000 plus interest.


Note 17 - Supplemental Oil and Gas Information (Unaudited)

Proved Oil and Gas Reserves (Unaudited)

The following information was developed from reserve reports as of April 1,
2001 and January 1, 2003 which are based on estimates made by independent
reserve engineers:


                                                Natural Gas       Crude Oil
                                                   (MCF)          (Barrels)
                                                ----------         --------

Proved reserves as of March 31, 2001             9,144,761          444,573

Revisions of previous estimates                    208,837         (277,120)
Production                                        (128,998)         (29,289)
                                                ----------         --------

Proved reserves as of December 31, 2001          9,224,600          138,164

Sales or other deletions                                 -         (128,788)
Revisions of previous estimates                 (2,042,255)          85,277
Extension, discoveries and other additions      89,284,734          141,169
Production                                        (676,879)         (53,122)
                                                ----------         --------

Proved reserves as of December 31, 2002         95,790,200          182,700
                                                ==========         ========



                                    F-34


                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements




Note 17 - Supplemental Oil and Gas Information (Unaudited) (continued)

Proved Oil and Gas Reserves (Unaudited) (continued)

Proved reserves are estimated quantities of crude oil, natural gas and natural
gas liquids which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs under
existing economic and operating conditions.

There are uncertainties inherent in estimating quantities of proved oil and
gas reserves, projecting future production rates, and timing of development
expenditures.  Accordingly, reserve estimates are often different from the
quantities of oil and gas that are ultimately recovered.

Proved Developed Oil and Gas Reserves

The following information sets forth the estimated quantities of proved
developed oil and gas reserves of the Company as of the end of each year.


                                                 Crude Oil and
                                Natural Gas       Condensate
Proved Developed Reserves         (MCF)           (Barrels)
-------------------------       -----------      -------------

December 31, 2001                4,112,300          138,864
December 31, 2002               38,590,600          182,700


Costs Incurred in Oil and Gas Activities

Costs incurred in connection with the Company's oil and gas acquisition,
exploration and development activities are shown below.


                                             For the Year     For the Nine
                                                Ended         Months Ended
                                             December 31,     December 31,
                                                2002             2001
                                             ------------     ------------

Property acquisition costs
     Proved                                  $     72,383     $    223,319
     Unproved                                   2,279,587        1,291,126
                                             ------------     ------------
          Total property acquisition costs      2,351,970        1,514,445

Development costs                                 786,095          721,760
Exploration costs                              11,955,351        6,957,735
                                             ------------     ------------

Total costs                                  $ 15,093,416     $  9,193,940
                                             ============     ============

                                   F-35


                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 17 - Supplemental Oil and Gas Information (Unaudited) (continued)

Aggregate Capitalized Costs

Aggregate capitalized costs relating to the Company's oil and gas producing
activities, and related accumulated DD&A are as follows:

                                               For the Year     For the Nine
                                                  Ended         Months Ended
                                               December 31,     December 31,
                                                  2002             2001
                                               ------------     ------------

Proved oil and gas properties                  $ 13,176,850     $  5,009,661
Unproved oil and gas properties                  19,411,845       12,404,906
                                               ------------     ------------
          Total                                  32,588,645       17,414,567

Less accumulated depreciation, depletion,
 amortization and impairment                       (304,418)        (223,706)
                                               ------------     ------------

Net capitalized costs                          $ 32,284,277     $ 17,190,861
                                               ============     ============

From inception through December 31, 2002, the Company has capitalized the
following financing costs related to properties not subject to amortization.
As these properties are developed, the costs are transferred to properties
subject to amortization:

Beneficial conversion feature related to
 the 8% subordinated convertible notes         $  1,165,500
Capitalized interest                              1,863,783
Capitalized amortization of loan costs            2,170,612
                                               ------------

Total capitalized finance costs                $  5,199,895
                                               ============

Oil and Gas Operations

Aggregate results of operations in connection with the Company's oil producing
activities are shown below:
                                               For the Year     For the Nine
                                                  Ended         Months Ended
                                               December 31,     December 31,
                                                  2002             2001
                                               ------------     ------------

Revenues                                       $  2,367,713     $  1,692,805
Production costs                                 (1,820,692)      (1,074,460)
DD&A                                               (196,627)        (130,232)
                                               ------------     ------------
Results of operations from producing
 activities (excluding corporate
 overhead and interest costs)                  $    350,394     $    488,113
                                               ============     ============

                                    F-36

                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 17 - Supplemental Oil and Gas Information (Unaudited) (continued)

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved
Oil and Gas Reserves (Unaudited)

The following information is based on the Company's best estimate of the
required data for the Standardized Measure of Discounted Future Net Cash Flows
as of December 31, 2002 and 2001 as required by Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 69.  The Standard
requires the use of a 10 percent discount rate.  This information is not the
fair market value nor does it represent the expected present value of future
cash flows of the Company's proved oil and gas reserves.

                                             For the Year     For the Nine
                                                Ended         Months Ended
                                             December 31,     December 31,
                                                2002             2001
                                             -------------    -------------

Future cash inflows                          $ 303,392,537    $  27,499,212
Future production costs                       (109,060,912)     (11,493,932)
Future development costs                       (16,424,600)        (500,000)
Future income tax expense                      (59,269,174)      (5,969,531)
                                             -------------    -------------
Future net cash flows                          118,637,851        9,535,749
10% annual discount for estimated timing
 on cash flows                                 (63,585,181)      (3,913,266)
                                             -------------    -------------
Standardized measure of discounted
 future cash flows                           $  55,052,670    $   5,622,483
                                             =============    =============

Future cash inflows for the year ended December 31, 2002 and the nine months
ended December 31, 2001 are computed by applying a year end weighted average
spot market gas price for the areas of production of $3.11 and $2.74 per MCF,
respectively, and a year-end weighted average oil price of $31.20 and $16.71
per barrel, respectively.  Future production and development costs are
computed by estimating the expenditures to be incurred in developing and
producing the Company's proved oil and gas reserves at December 31, 2002 and
2001 assuming continuation of existing economic conditions.

Future production and development costs, which include dismantlement and
restoration expense, are computed by estimating the expenditures to be
incurred in developing and producing the Company's proved oil and gas reserves
at the end of the period, based on period-end costs, and assuming
continuation of existing economic conditions.

Future income tax expenses at December 31, 2002 and 2001 were computed by
applying the appropriate period-end statutory tax rates to the future pretax
net cash flows relating to the Company's proved oil and gas reserves, less the
tax basis of the properties involved.




                                  F-37



                        INFINITY INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note 17 - Supplemental Oil and Gas Information (Unaudited) (continued)

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved
Oil and Gas Reserves (Unaudited) (continued)

The following reconciles the change in the standardized measure of discounted
future net cash flow:

                                               For the Year     For the Nine
                                                  Ended         Months Ended
                                               December 31,     December 31,
                                                  2002             2001
                                               -------------    ------------

Beginning of period                            $   5,622,483    $ 13,009,222
Extensions, discoveries and other additions       77,054,495               -
Sales and transfers                                 (547,245)              -
Net change in sales and transfer prices,
  net of production costs                            371,265      (7,315,638)
Revision of previous quantity estimates           (1,590,027)       (753,656)
Development costs incurred during the period         786,095               -
Sales of oil and gas, net of production costs       (547,021)       (618,345)
Changes in future development costs                 (252,092)              -
Net change in income taxes                       (25,423,043)              -
Changes in production rates and other             (1,337,938)              -
Accretion of discount                                915,698       1,300,900
                                               -------------    ------------

End of period                                  $  55,052,670    $  5,622,483
                                               =============    ============

Future income tax expenses are computed by applying the appropriate period-end
statutory tax rates to the future pretax net cash flow relating to the
Company's proved oil and gas reserves, less the tax basis of the properties
involved.  Tax depreciation is calculated on the capitalization of
approximately 30% of the development costs of the Pipeline leasehold and
approximately 40% of the development costs of the LaBarge property as tangible
investment and uses MACRS depreciation for a 7-year life.  The future income
tax expenses do not give effect to tax credits, allowances, or the impact of
general and administrative costs of ongoing operations relating to the
Company's proved oil and gas reserves.
















                                   F-38

<PAGE>
                                  SIGNATURES

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

                                   INFINITY, INC.



Dated:  April 14, 2003            By: /s/ Stanton E. Ross
                                      Stanton E. Ross, President

     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 Company
and in the capacities and on the dates indicated:

            SIGNATURE                  CAPACITY                DATE



/s/ Stanton E. Ross              President, Treasurer      April 14, 2003
Stanton E. Ross                  (Principal Accounting
                                 Officer) and Director


/s/ Jon D. Klugh                 Chief Financial           April 14, 2003
Jon D. Klugh                     Officer and Secretary



/s/ George R. Jones              Director                  April 14, 2003
George R. Jones



/s/ Leroy C. Richie              Director                  April 14, 2003
Leroy C. Richie



/s/ O. Lee Tawes                 Director                  April 14, 2003
O. Lee Tawes
















                                    29

<PAGE>
                             CERTIFICATIONS

     I, Stanton E. Ross, Chief Executive Officer, certify that:

     1. I have reviewed this annual report on Form 10-KSB of Infinity, Inc.;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

        a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

        b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

        c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

        a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have  identified for the
registrant's auditors any material weaknesses in internal controls; and

        b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

     6. The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  April 14, 2003


/s/ Stanton E. Ross
Stanton E. Ross
Chief Executive Officer
(Principal Executive Officer)

                                   30

     I, Jon D. Klugh, Chief Financial Officer, certify that:

     1. I have reviewed this annual report on Form 10-KSB of Infinity, Inc.;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

        a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

        b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

        c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

        a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have  identified for the
registrant's auditors any material weaknesses in internal controls; and

        b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

     6. The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  April 14, 2003



/s/ Jon D. Klugh
Jon D. Klugh
Chief Financial Officer
(Principal Financial Officer)

                                  31