UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB


 [ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                OF 1934 For the fiscal year ended December 31, 2002.


 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934 For the transition period from ________________to _____________


                         Commission File Number 811-3584


                               INDIGO ENERGY, INC.
                 (Name of small business issuer in its charter)


    DELAWARE                                             13-4105842
(State or other jurisdiction of incorporation         (I.R.S. Employer
or organization)                                     Identification No.)


                               535 WESTGATE DRIVE
                                    NAPA, CA
                    (address of principal executive offices)


                                      94558
                                   (Zip Code)


                    Issuer's telephone number (707) 254-9302


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


         Securities registered under Section 12(g) of the Exchange Act:
                    COMMON STOCK, PAR VALUE $0.001 PER SHARE


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


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


    As of April 11, 2003, the aggregate market value of the voting and
  non-voting common equity held by non-affiliates computed by reference to the
  price at which the common equity was sold, or the average bid and asked price
  of such common equity, was $336,252


          As of April 11, 2003, the number of shares outstanding of the
                    issuer's common shares, was 12,013,262


                    Documents incorporated by reference: None


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



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<TABLE>
<CAPTION>


TABLE OF CONTENTS

PART 1
<S>         <C>                                                                                           <C>
       Item 1     DESCRIPTION OF BUSINESS                                                                 4
       Item 2.    DESCRIPTION OF PROPERTY                                                                 17
       Item 3.    LEGAL PROCEEDINGS                                                                       17
       Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                     17

PART II
       Item 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                18
       Item 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                               20
       Item 7.    FINANCIAL STATEMENTS                                                                    23
       Item 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                   AND FINANCIAL DISCLOSURE                                                               39

PART III
       Item 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                   COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                                      39
       Item 10.   EXECUTIVE COMPENSATION                                                                  41
       Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                          42
       Item 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                          46
       Item 13.   EXHIBITS, LISTS AND REPORTS ON FORM 8-K                                                 47
       Item 14.   CONTROLS AND PROCEDURES                                                                 48

SIGNATURES                                                                                                49
CERTIFICATIONS                                                                                            50
</TABLE>



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<PAGE>



PART I.

ITEM 1.  DESCRIPTION OF BUSINESS.

All references in this prospectus to "we", "us", "ours", "the Company" and
"Indigo Energy" are intended to refer to Indigo Energy, Inc.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-KSB contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. When used in this report, the words
"believe," "anticipate," "think," "intend," "plan," "expect," "project," "will
be" and similar expressions identify such forward-looking statements. The
forward-looking statements included herein are based on current expectations and
assumptions that involve a number of risks and uncertainties. Such statements
regarding future events and/or the future financial performance of the Company
are subject to certain risks and uncertainties, such as delays in the completion
or release of products, the availability of financing, the achievement of sales
assumptions as projected, the risk of war, terrorism and similar hostilities,
the possible lack of consumer appeal and acceptance of products released by the
Company, fluctuations in demand, that competitive conditions within the
Company's markets will not change materially or adversely, that the Company's
forecasts will accurately anticipate market demand, and the risks discussed in
"Factors Affecting Future Performance", which could cause actual events or the
actual future results of the Company to differ materially from any
forward-looking statement. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, the business and operations of the
Company are subject to substantial risks that increase the uncertainty inherent
in the forward-looking statements. In light of the significant risks and
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such statements should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.


(a) Business Development.

Indigo Energy, Inc. (the "Company"), a development stage company incorporated in
March 2000, has its principal offices at 535 Westgate Drive, Napa, CA 94558. The
telephone number is (707) 254-9302. Through December 31, 2002, the Company has
generated no revenues from operations.


(b) Business of Issuer.

PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS

The Company no longer intends to design, develop, manufacture and market
reliable electrical backup power supplies primarily for the telecommunication
industry. The Company lacks the capital, human and working, to build a range of
uninterruptible power supply systems in the power quality and reliability
industry.

The Company has not identified new products or services and their markets. No
new products or services have been announced publicly.


                                       4
<PAGE>

The Company's current business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership.

At the present time, the Company has not identified any business opportunity
that it plans to pursue, nor has the Company reached any agreement or definitive
understanding with any person concerning an acquisition.

It is anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
in corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses they represent have an interest in
considering a merger or acquisition with the Company. No assurance can be given
that the Company will be successful in finding or acquiring a desirable business
opportunity, given that little funds are available for acquisitions, or that any
acquisition that occurs will be on terms that are favorable to the Company or
its stockholders.

The Company's search will be directed toward small and medium-sized enterprises
that have a desire to become public corporations. The Company anticipates that
the business opportunities presented to it will (1) be recently organized with
no operating history, or a history of losses attributable to
under-capitalization or other factors; (2) be experiencing financial or
operating difficulties; (3) be in need of funds to develop a new product or
service or to expand into a new market; (4) be relying upon an untested product
or marketing concept; or (5) have a combination of the characteristics mentioned
in (1) through (4). The Company intends to concentrate its acquisition efforts
on properties or businesses that it believes to be undervalued. Given the above
factors, investors should expect that any acquisition candidate may have a
history of losses or low profitability.

The Company does not propose to restrict its search for investment opportunities
to any particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited resources. The Company's
discretion in the selection of business opportunities is unrestricted, subject
to the availability of such opportunities, economic conditions, and other
factors.

As a consequence of the registration of its securities, any entity which has an
interest in being acquired by, or merging into, the Company, is expected to be
an entity that desires to become a public company and establish a public trading
market for its securities. In connection with such a merger or acquisition, it
is highly likely that an amount of stock constituting control of the Company
would be issued by the Company or purchased from the current principal
shareholders of the Company by the acquiring entity or its affiliates. If stock
is purchased from the current shareholders, the transaction is very likely to
result in substantial gains to them relative to their purchase price for such
stock. In the Company's judgment, none of its officers and directors would
thereby become an "underwriter" within the meaning of the Section 2(11) of the
Act. The sale of a controlling interest by certain principal shareholders of the
Company could occur at a time when the other shareholders of the Company remain
subject to restrictions on the transfer of their shares.

Depending upon the nature of the transaction, the current officers and directors
of the Company may resign management positions with the Company in connection
with the Company's acquisition of a business opportunity. In the event of such a
resignation, the Company's current management would not have any control over
the conduct of the Company's business following the Company's combination with a
business opportunity.


                                       5
<PAGE>

It is anticipated that business opportunities will come to the Company's
attention from various sources, including its officers and directors, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.

The Company does not foresee that it would enter into a merger or acquisition
transaction with any business with which its officers or directors are currently
affiliated. However, existing corporate policy does not prevent the Company from
entering into a transaction with a related party, and management is unaware of
any circumstances under which this policy will change. It is not the current
intention of management to promote other blank check entities.

INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES

To a large extent, a decision to participate in a specific business opportunity
may be made upon management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, the perceived benefit
the Company will derive from becoming a publicly held entity, and numerous other
factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, it is anticipated that
the historical operations of a specific business opportunity may not necessarily
be indicative of the potential for the future because of the possible need to
shift marketing approaches substantially, expand significantly, change product
emphasis, change or substantially augment management, or make other changes. The
Company will be dependent upon the owners of a business opportunity to identify
any such problems that may exist and to implement, or be primarily responsible
for the implementation of, required changes. Because the Company may participate
in a business opportunity with a newly organized firm or with a firm which is
entering a new phase of growth, it should be emphasized that the Company will
incur further risks, because management in many instances will not have proved
its abilities or effectiveness, the eventual market for such company's products
or services will likely not be established, and such company may not be
profitable when acquired. The Company is unable to predict the approximate
number of merger candidates with which it might make contact.

It is anticipated that the Company will not be able to diversify, but will
essentially be limited to one such venture because of the Company's limited
financing. This lack of diversification will not permit the Company to offset
potential losses from one business opportunity against profits from another, and
should be considered an adverse factor affecting any decision to purchase the
Company's securities.

It is emphasized that management of the Company may effect transactions having a
potentially adverse impact upon the Company's shareholders pursuant to the
authority and discretion of the Company's management to complete acquisitions
without submitting any proposal to the stockholders for their consideration.
Holders of the Company's securities should not anticipate that the Company
necessarily will furnish such holders, prior to any merger or acquisition, with
financial statements, or any other documentation, concerning a target company or
its business. In some instances, however, the proposed participation in a
business opportunity may be submitted to the stockholders for their
consideration, either voluntarily by such directors to seek the stockholders'
advice and consent or because state law so requires.

The analysis of business opportunities will be undertaken by or under the
supervision of the Company's president, who is not a professional business
analyst. Although there are no current plans to do so, Company management may
hire and pay a finder's fee to a registered broker-dealer to assist in the
investigation and selection of business opportunities. In addition, the Company


                                       6
<PAGE>


may pay a finder's fee to a registered broker-dealer who introduces candidates
with which the Company successfully merges or commits to a business combination.
The Company does not intend to have anyone solicit on its behalf candidates in
exchange for a fee. There will not be any general solicitation by anyone acting
as a finder. Since Company management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of business
opportunities, no policies have been adopted regarding use of such consultants
or advisors, the criteria to be used in selecting such consultants or advisors,
the services to be provided, the term of service, or regarding the total amount
of fees that may be paid. However, because of the limited resources of the
Company, it is likely that any such fee the Company agrees to pay would be paid
in stock and not in cash. Otherwise, the Company anticipates that it will
consider, among other things, the following factors:

-    Potential  for  growth  and  profitability,  indicated  by new  technology,
     anticipated market expansion, or new products;

-    The Company's perception of how any particular business opportunity will be
     received by the investment community and by the Company's stockholders;

-    Whether, following the business combination, the financial condition of the
     business  opportunity would be, or would have a significant prospect in the
     foreseeable  future of becoming  sufficient to enable the securities of the
     Company to qualify for  listing on an  exchange or on a national  automated
     securities quotation system, such as NASDAQ, so as to permit the trading of
     such securities to be exempt from the  requirements of Rule 15c2-6 recently
     adopted by the Securities and Exchange Commission (the "SEC"). See "Factors
     Affecting Future Performance - Regulation of Penny Stocks";

-    Capital requirements and anticipated  availability of required funds, to be
     provided by the Company or from operations,  through the sale of additional
     securities,  through joint ventures or similar arrangements,  or from other
     sources;

-    The extent to which the business opportunity can be advanced;

-    Competitive  position as compared to other  companies  of similar  size and
     experience  within the industry segment as well as within the industry as a
     whole;

-    Strength and diversity of existing management, or management prospects that
     are scheduled for recruitment;

-    The cost of  participation  by the  Company as  compared  to the  perceived
     tangible and intangible values and potential; and

-    The  accessibility  of  required  management  expertise,   personnel,   raw
     materials, services, professional assistance, and other required items.

The Company will contact persons and companies with which its officers have an
acquaintance to make known the search for an acquisition candidate for the
Company. The Company does not intend to advertise in media. The Company will
screen potential acquisitions initially based upon whether a candidate has a
going business, audited financial statements for prior fiscal years, and
management experience in the industry.

No investors are intended to be solicited by the Company in connection with an
acquisition. No one has advanced operational funding to the Company in the past
other than certain shareholders.

In regard to the possibility that the shares of the Company would qualify for
listing on NASDAQ,


                                       7
<PAGE>

the current standards  include,  among other things,  the requirements that
the  issuer  of  the  securities  that  are  sought  to  be  listed  have  total
stockholders' equity of at least $5,000,000 or total market capitalization of at
least $50,000,000,  or net income of at least $750,000.  Many, and perhaps most,
of  the  business  opportunities  that  might  be  potential  candidates  for  a
combination with the Company would not satisfy the NASDAQ listing criteria.

No one of the factors described above will be controlling in the selection of a
business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and complex.
Potential investors must recognize that, because of the Company's limited
capital available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate adverse
facts about the opportunity to be acquired.

The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of any future specific
proposals, none of which have been submitted to the Company, and the selection
of a business opportunity may take several months or more.

Prior to making a decision to participate in a business opportunity, the Company
will generally request that it be provided with written materials regarding the
business opportunity containing such items as a description of products,
services and company history; management resumes; financial information;
available projections, with related assumptions upon which they are based; an
explanation of proprietary products and services; evidence of existing patents,
trademarks, or services marks, or rights thereto; present and proposed forms of
compensation to management; a description of transactions between such company
and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.

As part of the Company's investigation, the Company's executive officers and
directors may meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.

It is possible that the range of business opportunities that might be available
for consideration by the Company could be limited by the impact of SEC
regulations regarding purchase and sale of "penny stocks." The regulations would
affect, and possibly impair, any market that might develop in the Company's
securities until such time as they qualify for listing on NASDAQ or on another
exchange which would make them exempt from applicability of the "penny stock"
regulations.

Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that


                                       8
<PAGE>

process.  Acquisition  candidates  which have a need for an immediate  cash
infusion  are not  likely  to find a  potential  business  combination  with the
Company to be an attractive alternative.

There are no current loan arrangements or arrangements for any financing
whatsoever relating to any business opportunities.

FORM OF ACQUISITION

It is impossible to predict the manner in which the Company may participate in a
business opportunity. Specific business opportunities will be reviewed as well
as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of that review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. Such a
transaction is commonly referred to as a "reverse merger." As part of such a
transaction, the Company's existing directors may resign and new directors may
be appointed without any vote by stockholders.

It is likely that the Company will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders.

It is anticipated that any new securities issued in any reorganization would be
issued in reliance upon exemptions, if any are available, from registration
under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of the transaction, the Company may agree to
register such securities either at the time the transaction is consummated, or
under certain conditions or at specified times thereafter. The issuance of
substantial additional securities and their potential sale into any trading
market that might develop in the Company's securities may have a depressive
effect upon such market.

The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.


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<PAGE>

As a general matter, the Company anticipates that it, and/or its officers and
principal shareholders will enter into a letter of intent with the management,
principals or owners of a prospective business opportunity prior to signing a
binding agreement. Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.

It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs theretofor incurred in the related investigation would not be recoverable.
Moreover, because many providers of goods and services require compensation at
the time or soon after the goods and services are provided, the inability of the
Company to pay until an indeterminate future time may make it impossible to
procure goods and services.

In all probability, upon completion of an acquisition or merger, there will be a
change in control through issuance of substantially more shares of common stock.
Further, in conjunction with an acquisition or merger, it is likely that
management may offer to sell a controlling interest at a price not relative to
or reflective of any value of the shares sold by management, and at a price that
could not be achieved by individual shareholders at the time.

INVESTMENT COMPANY ACT AND OTHER REGULATION

The Company may participate in a business opportunity by purchasing, trading or
selling the securities of such business. The Company does not, however, intend
to engage or hold itself out as engaging primarily in such activities.
Specifically, the Company intends to conduct its activities so as to avoid being
classified as an "investment company" under the Investment Company Act of 1940
(the "Investment Act"), and to avoid application of the costly and restrictive
registration, regulation and other provisions of the Investment Act. The Company
will only seek to acquire a majority interest in another entity.

Section 3(a) of the Investment Act contains the definition of an "investment
company," and it excludes any entity that does not engage primarily in the
business of investing, reinvesting or trading in securities, or that does not
engage in the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which exceeds 40% of
the value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a manner that will
result in the availability of this exception from the definition of an
"investment company." Consequently, the Company's participation in a business or
opportunity through the purchase and sale of investment securities will be
limited to the purchase of a majority interest in another entity.

The Company's plan of business may involve changes in its capital structure,
management, control and business, especially if it consummates a reorganization
as discussed above. Each of these areas is regulated by the Investment Act, in
order to protect purchasers of investment company securities. Since the Company
will not register as an investment company, stockholders will not be afforded
these protections.


                                       10
<PAGE>

Any securities which the Company might acquire in exchange for its common stock
will be "restricted securities" within the meaning of the Act. If the Company
elects to resell such securities, such sale cannot proceed unless a registration
statement has been declared effective by the SEC or an exemption from
registration is available. Section 4(1) of the Act, which exempts sales of
securities not involving a distribution, would in all likelihood be available to
permit a private sale. Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were to be necessary, the Company
would be required to comply with the provisions of the Act to effect such
resale.

An acquisition made by the Company may be in an industry that is regulated or
licensed by federal, state or local authorities. Compliance with such
regulations can be expected to be a time-consuming and expensive process.

COMPETITION

The Company expects to encounter substantial competition in its efforts to
locate attractive opportunities, primarily from business development companies,
venture capital partnerships and corporations, venture capital affiliates of
large industrial and financial companies, small investment companies, and
wealthy individuals. Many of these entities and individuals will have
significantly greater experience, resources and managerial capabilities than the
Company and will therefore be in a better position than the Company to obtain
access to attractive business opportunities. The Company also will possibly
experience competition from other public "blank check" companies, some of which
may have more funds available than does the Company.

INTELLECTUAL PROPERTY

The Company filed a number of patent applications relating to its flywheel
system with the United States Patent and Trademark Office. If granted, a patent
gives the owner the right to exclude others from making, using, and selling the
invention claimed in the patent for a period of twenty years from the filing
date. The Company filed four trademark applications also.

Since the Company's incorporation in 2000, Indigo Energy developed inventions to
increase performance, reduce cost, and enhance the reliability and life of
flywheel energy storage systems ("FESS"). Our patent objectives were to protect
our unique inventions, to avoid infringement issues and to develop the necessary
assets and credibility to facilitate favorable results in business dealings with
competitors, suppliers and potential customers.

Indigo Energy's first patent application was submitted in May 2000. Since then
over fifty applications have been processed. On November 26, 2002, the U.S.
Patent and Trademark Office issued the company's first patent, Patent No.
6,486,627.

The Company does not have the capital, human and working, to protect and further
pursue its intellectual property. The Company retains ownership of its
intellectual property but the Company intends to license or sell the
intellectual property. There is no assurance the Company will successfully
license or sell the intellectual property, or if the Company succeeds in doing
so, that the licensing or sale of the intellectual property will produce revenue
or profits.

RESEARCH AND DEVELOPMENT EXPENDITURE OVER THE LAST TWO FISCAL YEARS

Our research and development expenses were $10,286 and $199,310 in 2002 and
2001, respectively.


                                       11
<PAGE>

No expenses were borne by customers.

ENVIRONMENTAL LAW COMPLIANCE

While we cannot predict with certainty the future operating costs for
environmental compliance, we do not believe they will have a material effect on
our capital expenditures, earnings or competitive position.

EMPLOYEES

Currently, the Company does not have any employees, except for our current
officers. All of the officers are employed on a part time basis, and none are
currently paid a salary, accruing salaries, or represented by a collective
bargaining agreement.

FACTORS AFFECTING FUTURE PERFORMANCE

Conflicts of Interest. Certain conflicts of interest may exist between the
Company and its officers and directors. They have other business interests to
which they devote their attention, and may be expected to continue to do so
although management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
exercise of such judgment as is consistent with fiduciary duties to the Company.

It is anticipated that Company's officers and directors may actively negotiate
or otherwise consent to the purchase of a portion of his or her common stock as
a condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's officers may consider his or her own
personal pecuniary benefit rather than the best interests of other Company
shareholders, and the other Company shareholders are not expected to be afforded
the opportunity to approve or consent to any particular stock buy-out
transaction. There is an inherent conflict of interest in such a situation, and
as long as a person is an officer or director, such person would have a
fiduciary duty to act in the best interest of the shareholders.

Need For Additional Financing. The Company has very limited funds, and such
funds may not be adequate to take advantage of any available business
opportunities. Even if the Company's funds prove to be sufficient to acquire an
interest in, or complete a transaction with, a business opportunity, the Company
may not have enough capital to exploit the opportunity. The ultimate success of
the Company may depend upon its ability to raise additional capital. The Company
has no business operations or revenues, and therefore, its ability to raise
additional capital will be severely limited. The Company has not investigated
the availability, source, or terms that might govern the acquisition of
additional capital and will not do so until it determines a need for additional
financing. If additional capital is needed, there is no assurance that funds
will be available from any source or, if available, that they can be obtained on
terms acceptable to the Company. Accordingly, the Company's business
opportunities will be limited to those that can be completed with little or no
capital.

Regulation of Penny Stocks. The Company's securities will be subject to a SEC
rule that imposes special sales practice requirements upon broker-dealers who
sell such securities to persons other than established customers or accredited
investors. For purposes of the rule, the phrase "accredited investors" means, in
general terms, institutions with assets in excess of $5,000,000, or individuals
having a net worth in excess of $1,000,000 or having an annual income that
exceeds $200,000 (or that, when combined with a spouse's income, exceeds
$300,000). For transactions covered by the rule, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the rule
may affect the ability of broker-dealers to sell the Company's securities


                                       12
<PAGE>

and also may affect the  ability of  purchasers  in this  offering  to sell
their securities in any market that might develop therefore.

In addition, the SEC has adopted a number of rules to regulate "penny stocks."
Because the securities of the Company constitute "penny stocks" within the
meaning of the rules, the rules would apply to the Company and to its
securities. The rules may further affect the ability of owners of common stock
to sell the securities of the Company in any market that might develop for them.
Shareholders should be aware that, according to the SEC, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (3) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differentials and markups
by selling broker-dealers; and (5) the wholesale dumping of the same securities
by promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. The Company's management is aware of the abuses that
have occurred historically in the penny stock market. Although the Company does
not expect to be in a position to dictate the behavior of the market or of
broker-dealers who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns from being
established with respect to the Company's securities.

Lack of Operating History. Due to the special risks inherent in the
investigation, acquisition, or involvement in a new business opportunity, the
Company must be regarded as a new or start-up venture with all of the unforeseen
costs, expenses, problems, and difficulties to which such ventures are subject.

No Assurance of Success or Profitability. There is no assurance that the Company
will acquire a favorable business opportunity. Even if the Company should become
involved in a business opportunity, there is no assurance that it will generate
revenues or profits, or that the market price of the common stock will be
increased thereby.

Possible Business - Not Identified and Highly Risky. The Company has no
identified and has no commitments to enter into or acquire a specific business
opportunity and therefore can disclose the risks and hazards of a business or
opportunity that it may enter into in only a general manner, and cannot disclose
the risks and hazards of any specific business or opportunity that it may enter
into. An investor can expect a potential business opportunity to be quite risky.
The Company's acquisition of or participation in a business opportunity will
likely be highly illiquid and could result in a total loss to the Company and
its stockholders if the business or opportunity proves to be unsuccessful.

Type of Business Acquired. The type of business to be acquired may be one that
desires to avoid effecting its own public offering and the accompanying expense,
delays, uncertainties, and federal and state requirements which purport to
protect investors. Because of the Company's limited capital, it is more likely
than not that any acquisition by the Company will involve other parties whose
primary interest is the acquisition of control of a publicly traded company.
Moreover, any business opportunity acquired may be currently unprofitable or
present other negative factors.

Impracticability of Exhaustive Investigation. The Company's limited funds and
the lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business opportunity
before the Company commits its capital or other resources thereto. Management
decisions, therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if the Company had


                                       13
<PAGE>

more  funds  available  to it,  would be  desirable.  The  Company  will be
particularly  dependent in making  decisions  upon  information  provided by the
promoter,  owner,  sponsor,  or others associated with the business  opportunity
seeking the  Company's  participation.  A  significant  portion of the Company's
available  funds may be expended for  investigative  expenses and other expenses
related to preliminary aspects of completing an acquisition transaction, whether
or not any business opportunity investigated is eventually acquired.

Lack of Diversification. Because of the limited financial resources that the
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

Reliance upon Financial Statements. The Company generally will require audited
financial statements from companies that it proposes to acquire. Given cases
where audited financials are not available, the Company will have to rely upon
interim period unaudited information received from target companies' management
that has not been verified by outside auditors. The lack of the type of
independent verification which audited financial statements would provide,
increases the risk that the Company, in evaluating an acquisition with such a
target company, will not have the benefit of full and accurate information about
the financial condition and recent interim operating history of the target
company. This risk increases the prospect that the acquisition of such a company
might prove to be an unfavorable one for the Company or the holders of the
Company's securities.

Moreover, the Company will be subject to the reporting provisions of the
Exchange Act, and thus will be required to furnish certain information about
significant acquisitions, including audited financial statements for any
business that it acquires. Consequently, acquisition prospects that do not have,
or are unable to provide reasonable assurances that they will be able to obtain,
the required audited statements would not be considered by the Company to be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable. Should the Company, during the time it remains
subject to the reporting provisions of the Exchange Act, complete an acquisition
of an entity for which audited financial statements prove to be unobtainable,
the Company would be exposed to enforcement actions by the SEC and to
corresponding administrative sanctions, including permanent injunctions against
the Company and its management. The legal and other costs of defending a SEC
enforcement action would have material, adverse consequences for the Company and
its business. The imposition of administrative sanctions would subject the
Company to further adverse consequences.

In addition, the lack of audited financial statements would prevent the
securities of the Company from becoming eligible for listing on NASDAQ, or on
any existing stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to serve as
market makers in the securities of the Company. Without audited financial
statements, the Company would almost certainly be unable to offer securities
under a registration statement pursuant to the Act, and the ability of the
Company to raise capital would be significantly limited until such financial
statements were to become available.

Other Regulation. An acquisition made by the Company may be of a business that
is subject to regulation or licensing by federal, state, or local authorities.
Compliance with such regulations and licensing can be expected to be a
time-consuming, expensive process and may limit other investment opportunities
of the Company.

Dependence upon Management; Limited Participation of Management. The Company
currently has only three individuals who are serving as its officers and
directors on a part-time basis. The Company will be heavily dependent upon the
skills, talents, and abilities of current management to


                                       14
<PAGE>

implement  its business  plan,  and may,  from time to time,  find that the
inability of the officers and  directors to devote their full time  attention to
the business of the Company results in a delay in progress  toward  implementing
its business plan.  Because investors will not be able to evaluate the merits of
possible business acquisitions by the Company, they should critically assess the
information concerning the Company's officers and directors.

Lack of Continuity in Management. The Company does not have an employment
agreement with its officers and directors, and as a result, there is no
assurance they will continue to manage the Company in the future. In connection
with acquisition of a business opportunity, it is likely the current, and
subsequently new, officers and directors and of the Company may resign subject
to compliance with Rule 14f-1 promulgated under the Exchange Act. A decision to
resign will be based upon the identity of the business opportunity and the
nature of the transaction, and is likely to occur without the vote or consent of
the stockholders of the Company.

Dependence upon Outside Advisors. To supplement the business experience of its
officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's president without
any input from stockholders. Furthermore, it is anticipated that such persons
may be engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the president of the Company considers
it necessary to hire outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required services.

Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.

Competition. The search for potentially profitable business opportunities is
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.

Loss of Control by Management and Stockholders. The Company may consider an
acquisition in which the Company would issue as consideration for the business
opportunity to be acquired, an amount of the Company's authorized but unissued
common stock that would, upon issuance, represent the great majority of the
voting power and equity of the Company. Such an acquisition would result in the
acquired company's stockholders and management controlling the Company, and the
likelihood that the Company's management would be replaced by persons unknown at
this time. Such a merger may result in a greatly reduced percentage of ownership
of the Company by its current shareholders.

Public Market Limited. The common stock currently trades on the OTC Bulletin
Board, and therefore it is difficult for a shareholder to liquidate his
investment without considerable delay. In addition, the price of the common
stock may be highly volatile. Factors such as those discussed in this "Risk
Factors" section have a significant impact upon the market price of the
securities offered hereby. Owing to the low price of the securities, many
brokerage firms may not be willing


                                       15
<PAGE>

to effect  transactions  in the  securities.  Even if a  purchaser  finds a
broker willing to effect a transaction in these  securities,  the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.

Rule 144 Sales. All of the outstanding shares of common stock held by present
officers, directors, and stockholders are "restricted securities" within the
meaning of Rule 144 under the Act. As restricted shares, these shares may be
resold only pursuant to an effective registration statement or under the
requirements of Rule 144 or other applicable exemptions from registration under
the Act and as required under applicable state securities laws. Rule 144
provides in essence that a person who has held restricted securities for one
year may, under certain conditions, sell every three months, in brokerage
transactions, a number of shares that does not exceed the greater of 1% of a
company's outstanding common stock or the average weekly trading volume during
the four calendar weeks prior to the sale. There is no limit on the amount of
restricted securities that may be sold by a nonaffiliate after the restricted
securities have been held by the owner for a period of two years. Non-affiliate
shareholders who have held their shares for under Rule 144(k) two years are
eligible to have freely tradable shares. A sale under Rule 144 or under any
other exemption from the Act, if available, or pursuant to subsequent
registration of shares of common stock of present stockholders, may have a
depressive effect upon the price of the common stock in any market that may
develop. All shares become available for resale (subject to volume limitations
for affiliates) under Rule 144, one year after date of purchase subject to
applicable volume restrictions under the Rule.




                                       16
<PAGE>



ITEM 2.  DESCRIPTION OF PROPERTY.

The Company's offices are at the home of Mr. Bloomer, our Chairman and
President, and we currently pay no rent:

         535 Westgate Drive
         Napa, California  94558


ITEM 3.  LEGAL PROCEEDINGS.

There are no legal proceedings to which the Company is a part.


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

No matters were submitted to a vote of security holders within the period
covered by this report, through solicitation of proxies or otherwise.



                                       17
<PAGE>



PART II.

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

The Company's common stock is traded on the NASD Over-the-Counter Bulletin Board
System under the symbol "IEGY.OB". The price per share reflected in the table
below represents the range of low and high prices for the common stock for the
quarters indicated, since the inception of trading on August 13, 2001.

<TABLE>
<CAPTION>

    QUARTER ENDED                                             LOW PRICE   HIGH PRICE
    -------------                                             ---------   ----------
<S>                                                            <C>          <C>
    September 30, 2001......................................   $0.75        $1.35
    December 31, 2001......................................    $0.55        $1.35
    March 31, 2002......................................       $0.40        $2.00
    June 30, 2002......................................        $0.70        $1.75
    September 30, 2002......................................   $0.80        $1.25
    December 31, 2002.......................................   $0.25        $1.00
</TABLE>


As of April 11, 2003, there were approximately 158 holders of record of the
Company's common stock.

DIVIDEND POLICY

The Company has not paid any cash dividends on the Common Stock and has no
present intention to declare or pay cash dividends on the Common Stock in the
foreseeable future. The Company intends to retain any earnings that it may
realize in the foreseeable future to finance its operations.

SALES OF UNREGISTERED SECURITIES

Since inception, the Company has issued unregistered securities to a limited
number of persons as described below.

         (1) In connection with its organization in March 2000, the 4 founders
of the Company were issued 9,500,000 shares of common stock. This transaction
was not registered under the Act in reliance on the exemption from registration
in Section 4(2) of the Act, as a transaction not involving any public offering.
These securities were issued as restricted securities and the certificates were
stamped with restrictive legends to prevent any resale without registration
under the Act or in compliance with an exemption.

         (2) The Company commenced on offering in reliance on Rule 506 of
Regulation D of the Securities Act of 1933, for the sale of the Company's common
stock. The 506 private placement began in late March 2000 and was completed as
of May 31, 2000. The offering was for up to 1,000,000 shares at an offering
price of $0.25 per share. The Company had sold 986,800 shares of common stock
raising aggregate gross proceeds of $246,700, before deduction of offering
expenses totaling $17,400. The shares were sold to 14 "accredited investors",
including officers of the Company. Christopher Gabrys and Rick Campbell,
officers of the Company, solicited shareholders, and no documentation was given
to any person solicited in the offering. These transactions were not registered
under the Act in reliance on the exemption from registration in Section 4(2) of
the Act, and Rule 506 of Regulation D promulgated thereunder. Form D was filed
with the Securities and Exchange Commission. The following persons purchased
shares in the 506 private placement:

                                       18
<PAGE>
<TABLE>
<CAPTION>


Name of Shareholder                           Number of Shares Purchased          Price Per Share
-------------------                           --------------------------          ---------------
<S>                                                     <C>                            <C>
Christopher Gabrys                                      104,000                        $0.25
Elaine Collins                                          400,000                        $0.25
David and Bonnie Campbell                               140,000                        $0.25
Robert and Tamitha McFarland                             20,000                        $0.25
Danny and Mary Tucker                                   120,000                        $0.25
Jeffrey and Tracy Bartel                                 10,800                        $0.25
Martha Gabrys                                            20,000                        $0.25
Jon Gabrys                                               40,000                        $0.25
Richard Coker                                            20,000                        $0.25
Wayne Gabrys                                             40,000                        $0.25
Charles and Gaila Triggs                                 60,000                        $0.25
Mandy Triggs                                              4,000                        $0.25
Derek and Susan Triggs                                    4,000                        $0.25
Charles Triggs                                            4,000                        $0.25
--------------                                             ----                        -----
TOTAL                                                   986,800
</TABLE>


(3)               In December of 2001, we entered into an agreement to issue
                  127,453 shares of common stock to a creditor of the Company to
                  settle an outstanding debt of a principal amount of $127,453.
                  The issuance was effected under the exemption from
                  registration provided under Section 4(2) of the Securities Act
                  of 1933, as amended.

(4)               In December of 2001, we entered into an agreement to issue
                  80,000 shares of common stock to each of two creditors of the
                  Company to settle two outstanding debts of $65,000,
                  representing principal and interest, and certain other
                  obligations to issue common stock to said creditors. The
                  issuance was effected under the exemption from registration
                  provided under Section 4(2) of the Securities Act of 1933, as
                  amended.

(5)               In January 2002, we issued an option to purchase 50,000 shares
                  of common stock, at an exercise price of $1.00 per share, to
                  J. Michael Neary, a director of the Company, in connection
                  with his appointment to the Board of Directors of the Company.
                  The options were issued under our 2001 Stock Option Plan. Such
                  options become exercisable over a four year period, with
                  one-quarter vesting in January 2003, one-quarter vesting in
                  January 2004 and the remainder vesting in January 2005.



                                       19
<PAGE>



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

PLAN OF OPERATION

The Company will continue to utilize the free labor of its directors, officers,
and shareholders until such time as funding is sourced from the capital markets.
It is anticipated additional funding for the next twelve months will be required
to maintain the Company as a public company. Attempts are currently being made
to raise cash through private placements and said attempts will continue
throughout 2003. The Company will also use various debt instruments and as well
as public offerings to raise needed capital during 2003. Over the next twelve
months, the operations of the Company will be limited to the solicitation of an
appropriate merger or acquisition candidate. The sales and cost of sales of the
Company for fiscal years 2002 and 2001 were $0.

The Company does not expect to conduct further research and development. The
Company does not have the substantial additional capital to complete its
development and reach an operating stage. Also, since the resignations, on
January 15, 2003, of Rick Campbell as director and Vice President and, on
January 20, 2003, Christopher Gabrys as director and President, the Company
lacks the engineering skill and expertise necessary to complete its development
and reach an operating stage. The Company does not expect purchase or sale of
plant and significant equipment nor does the Company expect significant changes
in the number of employees.

LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>

                                                      2002          2001
                                                   ----------    ----------

<S>                                                <C>                 <C>
             TOTAL CURRENT ASSETS                  $  1,415            $ 86,405
             TOTAL CURRENT LIABILITIES             $268,520            $222,756

             WORKING CAPITAL DEFICIENCY            $267,105            $136,351
</TABLE>


The working capital deficiency increased by $130,754 from December 31, 2001 to
December 31, 2002. Cash increased by $1,415 over the same period.

GENERAL AND ADMINISTRATIVE EXPENSES

The Company's general and administrative expenses decreased from $302,025 for
the period December 31, 2000 to December 31, 2001 to 261,700 for the year ended
December 31, 2002, a decrease of $40,325 or 13.35% over 2001. General and
administrative expenses represent office expenses, consulting and professional
fees. The decrease in general and administrative expenses is primarily due to a
decrease in consulting and professional fees.

NET LOSS

The Company's net loss decreased from $569,603 for the period December 31, 2000
to December 31, 2001 to $444,560 for the year ended December 31, 2002 due to the
decrease in general and administrative and research and development expenses
incurred during the year. At December 31, 2002, the Company had a stockholders'
deficit of $267,105.

INFLATION


                                       20
<PAGE>

Although the Company believes that inflation has not had a material adverse
effect on the results of the operations to date, any increase in costs to the
Company could affect the net income or loss of the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

FAS No. 141, "Business Combinations" and FAS No. 142, "Goodwill and Other
Intangible Assets," were issued in July 2001. FAS 141 requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method of accounting. FAS 141 also specifies the criteria which must be
met in order for certain acquired intangible assets to be recorded separately
from goodwill. FAS 142 became effective for the Company beginning with the
Company's first quarter of 2002. Under FAS 142, goodwill is no longer amortized
but rather will be tested for impairment annually, or more frequently if events
or changes in circumstances indicate that the asset might be impaired. This new
approach requires the use of valuation techniques and methodologies
significantly different than the previous undiscounted cash flow policy utilized
by the Company. The Company does not expect the adoption of FAS 141 or FAS 142
to have a material impact on it financial statements.

FAS No. 143, "Accounting for Asset Retirement Obligations" was issued in June of
2001. FAS 143, which became effective for the Company beginning in 2003,
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and associated asset retirement costs.
The Company does not expect the adoption of FAS 143 to have a material impact on
its Financial Statements.

FAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
was issued in August 2001. FAS 144, which became effective for the Company
beginning with its first quarter of 2002, establishes a single accounting model
for long-lived assets to be disposed of by sale, and also broadens the
presentation of discontinued operations to include more disposal transactions.
The adoption of FAS 144 did not have a material impact on the Company's
Financial Statements.

In April 2002, the FASB issued SFAS 145, "Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and "Technical Corrections,"
which rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of
Debt" and an amendment of that Statement, and SFAS No. 64, "Extinguishment of
Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145 also rescinds SFAS
No. 44, " Accounting for Intangible Assets for Motor Carriers." SFAS No. 145
amends SFAS No. 13, "Accounting for Leases," to eliminate an inconsistency
between the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. SFAS No. 145 also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. SFAS No.145
is effective for fiscal years beginning after May 15, 2002. The Company does not
expect the adoption of SFAS No. 145 will have a material impact on its results
of operations or financial position.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which addresses significant issues regarding
the recognition, measurement, and reporting of costs associated with exit and
disposal activities, including restructuring activities. SFAS No. 146 requires
that costs associated with exit or disposal activities be recognized when they
are incurred rather than at the date of a commitment to an exit or disposal
plan. SFAS No. 146 is effective for all exit or disposal activities initiated
after December 31, 2002. The Company does not expect the adoption of SFAS No.
146 to have a material impact on our results of operations or financial
position.


                                       21
<PAGE>

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements regarding
our plans, objectives, expectations and intentions. Although we believe the
statements and projections are based upon reasonable assumptions, actual results
may differ from those that we have projected.




                                       22
<PAGE>



ITEM 7. FINANCIAL STATEMENT

         Independent Auditors Report

         Balance Sheet as at December 31, 2002 and 2001

         Statements of Operations cumulative for the period from December 31,
2000 to December 31, 2002 and 2001.

         Statements of Cash Flows cumulative for the period from December 31,
2000 to December 31, 2002 and 2001.

         Statement of Stockholders' Deficiency cumulative for the period from
December 31, 2000 to December 31, 2002 and 2001.

         Notes to Financial Statements


                                       23
<PAGE>


                          Independent Auditors' Report


To the Board of Directors of
       Indigo Energy, Inc.


We have audited the accompanying balance sheet of Indigo Energy, Inc., a
development stage company (the "Company") as of December 31, 2002 and the
related statements of operations, stockholders' deficit and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. The financial statements of the
Company as of December 31, 2001 were audited by other auditors whose report
dated March 18, 2002 included an explanatory paragraph that expressed
substantial doubt about the Company's ability to continue as a going concern .

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 financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Indigo Energy, Inc. as of
December 31, 2002, and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming that Company.
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company's cumulative losses during the development period, net
capital deficiency, and the need to obtain substantial additional funding to
complete its development raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.





Orlando, Florida
April 9, 2003


                                       24
<PAGE>



Balance Sheets

<TABLE>
<CAPTION>

                                 Assets                                             2002                        2001
                                 ------
                                                                          -----------------------------------------------

Current assets:
<S>                                                                                   <C>                            <C>
   Cash                                                                               $      1,415                     -
                                                                          -----------------------------------------------

                  Total current assets                                                       1,415                     -




Equipment, net                                                                                   -                 2,820
                                                                          -----------------------------------------------

Other assets:
   Patent application costs                                                                      -                83,585
                                                                          -----------------------------------------------

                  Total other assets                                                             -                83,585
                                                                          -----------------------------------------------

                  Total assets                                                          $     1,415               86,405
                                                                          ===============================================

                  Liabilities and Stockholders' Deficit

Current liabilities:
  Accounts payable                                                                    $    246,636               208,455
  Advances from officers (stockholders)                                                     10,984                 3,401
  Advances from consulting firm                                                             10,900                10,900
                                                                          -----------------------------------------------

        Total current liabilities                                                          268,520               222,756

Stockholders' deficit
  Preferred stock, $0.001 par value, 10,000,000
        shares authorized, no shares issued and outstanding                                     -                     -
  Common stock, $0.001 par value, 90,000,000 shares
        authorized, 12,013,262 and 11,774,253 shares
         issued and outstanding, respectively                                               12,013                11,774
  Additional paid-in capital                                                             1,062,191               828,624
  Deficit accumulated during the development stage                                     (1,301,309)             (856,749)
  Notes receivable from officers (stockholders)                                           (40,000)             (120,000)
                                                                          -----------------------------------------------

        Total stockholders' deficit                                                      (267,105)             (136,351)
                                                                          -----------------------------------------------

        Total liabilities and stockholders' deficit                                    $     1,415                86,405
                                                                          ===============================================
</TABLE>


                                       25
<PAGE>




Statements of Operations
<TABLE>
<CAPTION>


                                                                                                                    Cumulative for
                                                                                                                   the period from
                                                                                                                    March 8, 2000
                                                                   Year ended                    Year Ended         (inception) to
                                                                  December 31,                  December 31,         December 31,
                                                                      2002                          2001                2002
                                                          -------------------------------------------------------------------------

<S>                                                                 <C>                            <C>                <C>
Revenue                                                             $      -                            -                   -

Expenses:
     Research and development expenses                                10,286                      199,310             397,115
     General and administrative expenses                             261,700                      302,025             663,909
     Interest expense                                                    600                       67,471              68,071
     Depreciation                                                        597                          797               1,762
     Forgiveness of notes receivable
                          from officers (stockholders)                57,027                            -              57,027
     Impairment of long lived assets                                 116,450                            -             116,450
                                                          --------------------------------------------------------------------

                         Total expenses                              446,660                      569,603           1,304,334

Interest income                                                        2,100                            -               2,100
                                                          --------------------------------------------------------------------

                         Net loss                                    444,560                      569,603           1,302,234
                                                          ====================================================================

Basic net loss per common share                                  $   (0.037)                      (0.050)
                                                          ================================================

Weighted average common
     shares outstanding                                           11,904,142                   11,459,488
                                                          ================================================


</TABLE>


                                       26
<PAGE>


Statements of Cash Flows
<TABLE>
<CAPTION>



                                                                                                                    Cumulative for
                                                                                                                    the period from
                                                                                                                     March 8, 2000
                                                                       Year Ended               Year Ended           (inception) to
                                                                      December 31,             December 31,           December 31,
                                                                          2002                     2001                   2002
                                                       -----------------------------------------------------------------------------

Cash flows from operating activities:
<S>                                                                         <C>                         <C>            <C>
  Net loss                                                                  $  (444,560)                (569,603)      (1,301,309)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
     Depreciation of equipment                                                       597                      797            1,762
      Impairment of long lived assets                                            116,450                        -          116,450
     Forgiveness of notes receivables

       from officers (stockholders)                                               57,027                        -           57,027
     Value of services contributed to the Company
       by certain executive officers                                              22,500                   90,000          187,500
     Consulting fee paid by issuance of
       common stock                                                               79,000                        -           79,000
      Receivable - interest due from officer                                      (2,100)                       -           (2,100)
      Interest expense paid by issuance of common stock                                -                   60,000           60,000
      Receivable - shared research cos                                                 -                   10,000                -
     Increase in accounts payable                                                 38,181                  185,623          374,089
                                                                -------------------------------------------------------------------

                     Net cash used in operating activities                     (132,905)                (223,183)         (427,581)

Cash flows used in investing activities:
  Purchase of equipment                                                          (1,275)                    (303)           (5,260)
  Payments of patent application costs                                          (29,367)                 (71,007)         (112,952)
</TABLE>


                                       27
<PAGE>
<TABLE>
<CAPTION>


<S>                                                                                   <C>                <C>              <C>
   Advances to officers (stockholders)                                                 -                 (77,457)         (116,599)
                                                                -------------------------------------------------------------------

                     Net cash used in investing activities                      (30,642)                (148,767)         (234,811)

Cash flows from financing activities:
  Proceeds from issuance of common stock, net                                    132,306                  250,000          621,106
   Proceeds from convertible note payable                                              -                  100,000          100,000
   Advances from consulting firm                                                       -                   10,900           10,900
   Advances from officers (stockholders)                                          32,656                        -           32,656
   Payments for expenses public offering                                               -                        -         (100,855)
                                                                -------------------------------------------------------------------

                    Net cash provided by financing activities                    164,962                  360,900          663,807
                                                                -------------------------------------------------------------------

                    Net increase (decrease) in cash                                1,415                 (11,050)            1,415


Cash, at beginning of year                                                             -                   11,050                -
                                                                -------------------------------------------------------------------


Cash, at end of year                                                               1,415                        -            1,415
                                                                ===================================================================

Supplemental information about cash payments is as follows:
   Cash payments of interest                                                   $     600                        -                -
                                                                ===================================================================

Supplemental schedule of non-cash financing activities:
  Conversion of convertible notes and accrued interest to
   common stock                                                                 $      -                  160,000          160,000
                                                                ==================================================================

  Conversion of accounts payable to common stock                                $      -                  127,453         127,453
                                                                ==================================================================


</TABLE>

                                       28
<PAGE>




Statement of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>



                                                                                              Common stock
                                                                                   -----------------------------------
                                                                                       Total
                                                                                   stockholders'
                                                                                      deficit            Shares          Amount
                                                                                 --------------------------------------------------


<S>                  <C> <C>                                                          <C>             <C>               <C>
Balances at December 31, 2000 .....................................................   $    26,654     10,486,800        10,487

Common stock issued in an initial public offering, net of expenses of $100,855 ....       149,145      1,000,000       148,145



Common stock issued on conversion of convertible notes payable and accrued interest       160,000        160,000           160


Common stock issued on conversion of accounts payable .............................       127,453        127,453           127


Value of services contributed to the Company by certain executive officers ........        90,000             --            --


Net loss - year ended December 31, 2001 ...........................................      (569,603)            --            --


Issuance of notes receivable from officers (stockholders) .........................      (120,000)            --             --



Balances at December 31, 2001 .....................................................      (136,351)    11,774,253        11,774


Common stock issued in private placement, net of expenses of $450 .................       132,306        189,009           189


Consulting fee paid by issuance of common stock ...................................        79,000         50,000            50


Value of services contributed to the Company by certain executive officers ........        22,500             --            --
</TABLE>


                                       29
<PAGE>
<TABLE>
<CAPTION>


<S>                                                                                      <C>                 <C>           <C>
Net loss - year ended December 31, 2002 ...........................................      (444,560)            --            --


Sale of notes receivable from officers (stockholders) .............................        80,000             --            --


Balances at December 31, 2002 .....................................................   $  (267,105)     12,013,262   $    12,013


                                                                                                       Deficit
                                                                                                      Accumulated        Notes
                                                                                   Additional         during the        receivables
                                                                                    paid-in           development         from
                                                                                     capital              stage       (stockholders)
                                                                                   ------------------------------------------------

Balances at December 31, 2000 .....................................................       303,313        (287,146)          --

Common stock issued in an initial public offering, net of expenses of $100,855 ....

                                                                                           1,000               --            --


Common stock issued on conversion of convertible notes payable and accrued interest       159,840             --             --


Common stock issued on conversion of accounts payable .............................       127,326             --             --


Value of services contributed to the Company by certain executive officers ........        90,000             --             --


Net loss - year ended December 31, 2001 ...........................................          --          (569,603)           --


Issuance of notes receivable from officers (stockholders) .........................          --                --      (120,000)
                                                                                                                     -----------


Balances at December 31, 2001 .....................................................       828,624        (856,749)      (120,000)


Common stock issued in private placement, net of expenses of $450 .................       132,117              --             --


Consulting fee paid by issuance of common stock ...................................        78,950              --             --


Value of services contributed to the Company by certain executive officers ........        22,500              --             --


Net loss - year ended December 31, 2002 ...........................................          --           (444,560)           --


Sale of notes receivable from officers (stockholders) .............................          --               --          80,000
                                                                                                                     -----------

Balances at December 31, 2002 .....................................................   $ 1,062,191     $(1,301,309)   $   (40,000)
                                                                                                                      ===========

</TABLE>


                                       30
<PAGE>




                               INDIGO ENERGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                          Notes to Financial Statements

                           December 31, 2002 and 2001



(1)    Summary of Significant Accounting Policies

       (a)    Description of Development Stage Activities

         The Company was organized on March 8, 2000 as a Delaware corporation
under the name Alternate Energy Corp. Immediately thereafter the Company changed
its name to Q Power, Inc. and in October 2000 changed to its present name of
Indigo Energy, Inc.

              The Company is presently in its development stage and intends to
              become a developer and manufacturer of a reliable electrical
              backup power supply for the telecommunications industry. The
              Company has elected December 31 as its year-end for tax and
              financial reporting.

       (b)    Offerings of the Company's Common Stock

         In May 2000, the Company completed an offering of 986,800 shares of its
common stock, at an offering price of $.25 per share, to qualified investors.
Pursuant to the offering, the Company received $246,700, less costs of $17,400
associated with the offering, for net proceeds of $229,300. The offering was
made pursuant to the exemptions from registration with the Securities and
Exchange Commission (SEC) provided by Regulation D, Rule 506, of the 1933 Act,
and under applicable state laws, rules and regulations.

              On December 19, 2000, the Company filed a Registration Statement
              on Form SB-2 (Amendment No.2) with the SEC. The Registration
              Statement was declared effective by the SEC on January 4, 2001,
              File No. 333-42026. In connection therewith, the Company issued
              1,000,000 shares of its common stock at an offering price of $.25
              per share for an aggregate of $250,000. Costs associated with the
              offering, amounting to $100,855, have been charged to additional
              paid-in capital, resulting in net proceeds from the offering of
              $149,145.

              Pursuant to an agreement dated March 8, 2002, the Company issued
              50,000 shares of its common stock valued at $79,000 to a
              consultant, wherein the consultant agreed to provide various
              services to the Company including business development, business
              strategy and corporate image for a period of three months. In
              connection with the agreement, the Company filed Form S-8 with the
              SEC to register the shares.

              On July 12, 2002, the Company completed a private placement of
              189,009 of its common shares at a price of $0.70 per share to 33
              accredited investors. The private placement was made pursuant to
              the exemptions from registration with the SEC provided by
              Regulation D, Rule 506, of the 1933 Securities Act, and under
              applicable state laws, rules and regulations, No commissions were
              paid and no registration rights were granted by the Company. The
              private placement provided the Company with net cash proceeds,
              after expense, of $132,306. The proceeds of the private placement
              were used to partially pay past due payables, fund research and
              development and general corporate expenses.

       (c)    Use of Estimates in Preparing Financial Statements

              The preparation of financial statements in conformity with
              accounting principles generally accepted in the United States
              requires management to make estimates and assumptions that affect
              the reported amounts of assets and liabilities and disclosure of


                                       31
<PAGE>

              contingent assets and liabilities at the dates of the financial
              statements and the reported amounts of revenues and expenses
              during the reporting periods. Actual results could differ from
              those estimates.


       (d)    Concentrations of Credit Risk

              Financial instruments which potentially expose the Company to
              concentrations of credit risk, as defined by Statement of
              Financial Accounting Standards No. 105, consist principally of
              notes receivable from officers (stockholders). Such notes
              receivable aggregate $40,000 at December 31, 2002, the details of
              which are described in Note 2. The Company does not have
              collateral of the officers to support the notes.

       (e)    Research and Development

              Research and development costs are expensed as incurred.

       (f)    Plant and Equipment

              Plant and equipment are stated at cost, less accumulated
              depreciation. The cost of major improvements and betterments to
              existing plant and equipment are capitalized, while maintenance
              and repairs are charged to expense when incurred. Upon retirement
              or other disposal of plant and equipment, the profit realized or
              loss sustained on such transaction is reflected in income.
              Depreciation is computed on the cost of plant and equipment on the
              straight-line method, based upon the estimated five-year useful
              life of the assets.

       (g)    Patent Application Costs

              Costs incurred in connection with patent applications are
              capitalized in the accounts of the Company at cost.

              In the event that a patent is granted to the Company, the costs
              incurred will be amortized on a straight-line basis over the
              economic life of the patent, but in no event longer than the legal
              life of the patent. Patent application costs recorded, as assets
              which are subsequently determined to have no discernible future
              benefit will be charged to operations.


                                       32
<PAGE>



                               INDIGO ENERGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                          Notes to Financial Statements

                           December 31, 2002 and 2001

(1)    Summary of Significant Accounting Policies, Continued


       (h)    Impairment of Long-Lived Assets

              The Company's long-lived assets and certain identifiable
              intangibles are reviewed for impairment whenever events or changes
              in circumstances indicate that the carrying amount of an asset may
              not be recoverable. Recoverability of assets to be held and used
              is measured by a comparison of the carrying amount of an asset to
              future net cash flows (undiscounted and without interest charges)
              expected to be generated by the asset. If such assets are
              considered to be impaired, the impairment to be recognized is
              measured by the amount by which the carrying amount of the assets
              exceeds the fair value of the assets.

              The Company recorded charges totaling $116,450 relating to
              write-down of net assets as a result of management's decision to
              discontinue development of a reliable electrical backup power
              supply for the telecommunications industry.

(i)      Income Taxes

              Deferred income taxes result from the effects of temporary
              differences between the tax bases of assets and liabilities and
              their reported amounts in the financial statements, and for the
              expected future tax benefits to be derived from tax loss
              carryforwards. A valuation allowance is recorded to reflect the
              likelihood of realization of deferred tax assets.

       (j)    Net Loss Per Share

              Net loss per common share was calculated under SFAS No. 128,
              "Earnings per Share". Basic net loss per share is computed by
              dividing the net loss by the weighted average outstanding shares
              of $11,904,142 and 11,459,488 as of December 31, 2002 and 2001,
              respectively during the periods. Inasmuch as the Company has
              incurred losses, the effect of dilutive securities have been
              excluded from the computation, as they are antidilutive.

       (k)    Going Concern

              The accompanying financial statements have been prepared assuming
              that the Company will continue as a going concern. The Company is
              dependent upon raising additional capital and/or obtaining
              financing to continue its development stage operations. The
              financial statements do not include any adjustments that might
              result from the outcome of this uncertainty.

              It is management's plan to raise additional funds through private
              placements.


                                       33
<PAGE>




(1)    Summary of Significant Accounting Policies, Continued


       (l)    Comprehensive Income

              The Company has adopted Statement of Financial Accounting
              Standards (SFAS) No. 130, "Reporting Comprehensive Income", which
              established standards for reporting and display of comprehensive
              income and its components in the financial statements. Besides net
              income, SFAS No. 130 requires the reporting of other comprehensive
              income, defined as revenues, expenses, gains and losses that under
              generally accepted accounting principles are not included in net
              income. At December 31, 2002 and 2001, the Company had no items of
              other comprehensive income and as a result, no additional
              disclosure is included in the financial statements.


       (m)    Fair Value of Financial Instruments

              Fair value estimates discussed herein are based upon certain
              market assumptions and pertinent information available to
              management. The respective carrying value of certain
              on-balance-sheet financial instruments approximated their fair
              values. These financial instruments included cash, accounts
              payable, advances from officers, advances from consulting firm,
              and notes receivable from officers (stockholders). Fair values
              were assumed to approximate carrying values for these financial
              instruments since they are short-term in nature or they are
              receivable or payable on demand.

       (n)     Stock-Based Compensation

              The Company accounts for stock-based compensation awards to
              employees using the intrinsic value method as prescribed by
              Accounting Principles Board Opinion ("APB") No. 25, Accounting for
              Stock Issued to Employees, and related interpretations.
              Accordingly, no compensation expense is recorded for options
              issued to employees in fixed amounts and with fixed exercise
              prices at least equal to the fair value of the Company's common
              stock at the date of the grant. The Company provides the
              disclosure requirements of SFAS No. 123, Accounting for
              Stock-Based Compensation. Stock-based awards to non-employees are
              accounted for under the provisions of SFAS No. 123.

       (o)    Reclassifications

              Certain prior year balances have been reclassified to conform with
              the current year financial statement presentation. Those
              reclassifications had no impact on previously reported results of
              operations or stockholders' deficit.


                                       34
<PAGE>




        (2)    Notes Receivable From Officers (Stockholders)

          In December 2001, the Company  converted  advances to three officers
          (stockholders)   of  the  Company  into  interest  bearing  notes
          receivable.  The  notes  bear  interest  at 7%  per  annum,  with
          interest  payable  quarterly.  On December 31,  2002,  $80,000 in
          notes receivable were sold to officers (stockholders) in exchange
          for a reduction in advances from these  officers  (stockholders).
          The sale of notes  resulted in the Company  recording a charge of
          $57,027 for  forgiveness  of notes  receivable.  The  outstanding
          principal  notes  receivable  balance of $40,000 at December  31,
          2002 is due on December 31, 2003.


     (3)    Conversion of Notes and Accounts Payable to Common Stock

       Notes Payable

       In August 2001, the Company received the proceeds of convertible notes
       payable in the aggregate amount of $100,000. The underlying loans were
       for a period of three months and were convertible into 100,000 shares of
       the Company's common stock at maturity in November 2001, at the
       noteholders option. Accrued interest at the maturity date of the notes
       amounted to $30,000. The noteholders were also entitled to receive 30,000
       shares of the Company's common stock as additional interest at maturity.
       In November 2001, the noteholders agreed to receive 160,000 shares of the
       Company's stock in full satisfaction of the notes and the accrued
       interest thereon.

       Accounts Payable

In December 2001, the Company entered into an agreement with a vendor whereby
the Company issued 127,453 shares of its common stock valued at $1 per share in
payment of certain outstanding invoices aggregating $127,453 payable to the
vendor.


                                       35
<PAGE>




(4)    Income Taxes

       Deferred income taxes reflect the net tax effect of temporary differences
       between the carrying amounts of assets and liabilities for financial
       reporting purposes and the amounts used for income tax purposes and
       operating loss carryforwards. Significant items comprising the net
       deferred tax asset at December 31, 2002 are:

<TABLE>
<CAPTION>

<S>                                                                                          <C>
            Net operating loss carryforward                                                  $
            Start-up costs not currently deductible for tax purposes
            Total deferred income tax assets
            Less:  deferred tax asset valuation allowance
                                                                                             --------------------
                                                                                             --------------------

                     Net deferred tax asset                                                  $

                                                                                             ====================
</TABLE>


The elements comprising the differences in the income tax expense between the
federal statutory rate and the Company's effective rate for the year ended
December 31, 2002 and the period March 8, 2000 (inception) to December 31, 2002
are shown as follows:
<TABLE>
<CAPTION>

                                                                           2002                     2001
                                                                    --------------------    ---------------------

<S>                                                                 <C>                         <C>
            Income tax credit computed at the statutory rate        $                                 (193,665)
            Permanent non-deductible expenses                                                           30,600
            Un recorded tax benefits resulting from valuation
              allowance                                                                                163,065
                                                                    --------------------    ---------------------

                     Total income tax provision                     $                                     -
                                                                    ====================    =====================

</TABLE>

       At December 31, 2002, the Company has a net operating loss, for federal
       income tax purposes, of approximately $__________ available to offset
       future taxable income for a period of twenty years. In addition, deferred
       start-up costs of approximately $__________ will be available to offset
       future taxable income for a period of five years once the Company
       commences its intended business operations. The company has applied a
       full valuation allowance to its deferred tax assets inasmuch as there can
       be no assurance, at this time, that the Company will evolve from the
       development stage and generate future taxable income.



                                       36
<PAGE>




(5)    Stock Option Plan

         In August, 2001, the Company established a qualified and nonqualified
stock option plan pursuant to which up to 1.2 million shares of its common stock
can be set aside to promote the growth and profitability of the Company by
providing certain executives, directors and other employees or consultants with
an additional incentive to achieve Company objectives and to attract and retain
competent personnel. The Company granted options for the purchase of an
aggregate of up to 675,000 shares of the Company's common stock to its officers
(stockholders) at an exercise price of $1.00 per share which generally expires
10 years after the grant date.

       On January 23, 2002 the Company granted options under its stock option
       plan to a newly appointed director for the purchase of an aggregate of up
       to 50,000 shares of the Company's common stock at an exercise price of
       $1.00 per share which generally expires 10 years after the grant date.
       The options vest over a period of four years.

       The Company accounts for its stock compensation plans under the
       provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". As
       permitted by SFAS No. 123, the Company measures compensation cost in
       accordance with Accounting Principles Board Opinion (APB) No. 25,
       "Accounting for Stock Issued to Employees" and related interpretations.
       Accordingly, no accounting recognition is given to stock options granted
       at fair market value until they are exercised. Upon exercise, net
       proceeds, including tax benefits realized, are credited to equity.

       Under SFAS No. 123, pro forma information regarding net loss and net loss
       per share is required. This information is required to be determined as
       if the Company had accounted for its stock options under the fair value
       method of that statement.

       The fair value of each option issued is estimated on the date of the
       grant using the Black-Scholes option pricing model with the following
       assumptions: risk free interest rate of 5.04% and 4.57% in 2002 and 2001,
       respectively; dividend yield of 0% in 2002 and 2001; volatility factors
       of the expected market price of the Company's stock of 137.62% and 0% in
       2002 and 2001, respectively; and the expected life of an option life of
       ten years in 2002 and 2001.


                                       37
<PAGE>





(5)    Stock Option Plan, Continued


       For purposes of pro forma disclosures, the estimated fair value of the
       options is amortized over the options' vesting period. Had the Company's
       stock option plan been accounted for based on the fair value method set
       forth under SFAS No. 123, net loss and net loss per share would have been
       increased to the following pro forma amounts:

<TABLE>
<CAPTION>

                                                          Year ended              Year ended          Cumulative: March
                                                                                                           8, 2000
                                                                                                        (Inception) to
                                                       December 31, 2002       December 31, 2001      December 31, 2002
                                                      --------------------    --------------------    -------------------

            Net loss:
<S>                                                       <C>                       <C>                 <C>
                 As reported                              $ (444,560)               (569,603)           (1,302,234)
                 Pro forma                                  (510,955)               (603,992)           (1,402,093)

            Basic net loss per share:
                 As reported                                  $(.037)                  (.050)                 (.11)
                 Pro forma                                     (.043)                  (.053)                 (.12)

</TABLE>



                                       38
<PAGE>



PART III.

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

The disclosure called for by this Item has been previously reported.


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

The following table sets forth the names, ages concerning each of the directors
and executive officers of the Company:
<TABLE>
<CAPTION>


Names                              Age         Position
-----                              ---         --------

<S>                                <C>         <C>
Joel Bloomer                       63          Chairman of the Board of Directors, President

J. Michael Neary 64 Director

Scott Kostiuk                      32          Secretary and Treasurer

</TABLE>


CURRENT OFFICERS, DIRECTORS AND KEY EMPLOYEES

JOEL BLOOMER, CHAIRMAN OF THE BOARD & PRESIDENT

Mr. Bloomer has served as our Chairman of the Board since inception and assumed
the position of President in January of 2003. He worked as a business consultant
to Toray Composites (America) Inc. since 1994. Mr. Bloomer has 35 years
experience in the aerospace industry in composite materials, structural design,
dynamic analysis, manufacturing process development and business development
activities. He is a graduate of the University of Washington with a M.S. in
Aeronautical Engineering.

J. MICHAEL NEARY

Mr. Neary joined the Board of Directors on January 23, 2002. He has thirty years
of experience in the area of intellectual property procurement and protection.
From 1990 to 1996, Mr. Neary worked as a Senior Patent Attorney with Boeing
Commercial Airplane Group. From 1984 to 1990, he worked as a Senior Patent
Attorney with Boeing Aerospace Company. Mr. Neary is a graduate of the George
Washington University Law Center, Juris Doctor 1970. He earned a B.S. Electrical
Engineering from C.W. Post College in 1966.

SCOTT KOSTIUK, SECRETARY AND TREASURER

Mr. Kostiuk has been our Secretary and Treasurer since inception. From October
1998 to February 2000, Mr. Kostiuk has served as the Secretary and Treasurer of
Zeppelin Software Inc, a wireless


                                       39
<PAGE>

communications  company.  From November 1994 to 1999, Mr. Kostiuk served as
the  Secretary  and Treasurer of The Plant  Software  Inc., a computer  software
development  and  publishing  company.  Mr.  Kostiuk  attended the University of
Toronto, graduating with a B.A. degree in 1993.


There are no arrangements or understandings pursuant to which any person has
been elected as a director or executive officer of the Company. Directors are
elected annually by the stockholders and hold office until the next annual
meeting of stockholders and until their respective successors are elected and
qualified. Executive officers are elected by the Board of Directors and hold
office until their respective successors are elected and qualified. There is no
family relationship among any directors or executive officers of the Company.


The Company's board of directors has determined that it does not have an audit
committee financial expert serving on its audit committee. The Company believes
its current resources, level of activity, and the general environment of risk
have left it unable to attract an audit committee financial expert.


SECTION 16(A)  BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
with the Securities and Exchange Commission ("SEC") and NASD. Executive
officers, directors, and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.

The Company believes that all filing requirements applicable under Section 16(a)
to its executive officers, directors and 10% stockholders were complied with for
fiscal 2002.


The Company has not adopted a code of ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. The Company believes its
limited size, resources, and current level of activity make a code of ethics
cumbersome and unnecessary.



                                       40
<PAGE>



ITEM 10. EXECUTIVE COMPENSATION.

The following table summarizes all compensation awarded to, earned by, or paid
to the Chairman of the Board, three officers and a director of the Company
(collectively, the "Named Executive Officers") for services rendered in all
capacities to the Company for each of the Company's last three fiscal years. No
other executive officer of the Company received total salary and bonus in excess
of $100,000 during any of the last three fiscal years.
<TABLE>
<CAPTION>

.......................................................................................................................
                                             SUMMARY COMPENSATION TABLE
.......................................................................................................................
.......................................................... ......................................... ..................
                                                                   Long Term Compensation
.......................................................... ......................................... ..................
....................... .................................. .............................. .......... ..................
                              Annual Compensation                    Awards               Payouts
....................... .................................. .............................. .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
     (a)         (b)     (c)      (d)         (e)              (f)            (g)           (h)            (i)
................ ...... ......... ...... ................. .............. ............... .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
   Name and     Year   Salary    Bonus    Other Annual     Restricted      Securities    LTIP           All Other
  Principle              ($)      ($)   Compensation ($)      Stock        Underlying    Payouts    Compensation ($)
   Position                                               Award(s) ($)    Options/SARs      ($)
                                                                              (#)
................ ...... ......... ...... ................. .............. ............... .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
<S>             <C>       <C>      <C>         <C>              <C>            <C>           <C>            <C>
  C. Gabrys,    2002      0        0           0                0              0             0              0
 President &    2001      0        0           0                0           175,000          0              0
   CEO (1)      2000      0        0           0                0              0             0              0
................ ...... ......... ...... ................. .............. ............... .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
 J. Bloomer,    2002      0        0           0                0              0             0              0
   Chairman     2001      0        0           0                0           175,000          0              0
                2000      0        0           0                0              0             0              0
................ ...... ......... ...... ................. .............. ............... .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
 R. Campbell,   2002      0        0           0                0              0             0              0
     Vice       2001      0        0           0                0           175,000          0              0
President (1)   2000      0        0           0                0              0             0              0
................ ...... ......... ...... ................. .............. ............... .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
  J. Neary,     2002      0        0           0                0            50,000          0              0
   Director      (2)
................ ...... ......... ...... ................. .............. ............... .......... ..................
................ ...... ......... ...... ................. .............. ............... .......... ..................
 S. Kostiuk,    2002      0        0           0                0              0             0              0
  Secretary     2001      0        0           0                0           150,000          0              0
                2000      0        0           0                0              0             0              0
................ ...... ......... ...... ................. .............. ............... .......... ..................
</TABLE>

(1) Resigned subsequent to December 31, 2002.

(2)  Appointed subsequent to December 31, 2001.


The following table sets forth information with respect to individual grants of
stock options (whether or not in tandem with SARs), and freestanding SARs
(including options and SARs that subsequently have been transferred) made during
the last completed fiscal year to each of the Named Executive Officers during
fiscal 2002:
<TABLE>
<CAPTION>

.......................................................................................................................
                                        Option/SAR Grants in Last Fiscal Year
.......................................................................................................................
.......................................................................................................................
                                                  Individual Grants
.......................................................................................................................
.......................... ...................... ....................... ...................... ......................
          (a)                      (b)                    (c)                     (d)                    (e)
.......................... ...................... ....................... ...................... ......................
.......................... ...................... ....................... ...................... ......................
          Name            Number of Securities         % of Total          Exercise or Base        Expiration Date
                               Underlying         Options/SARs Granted       Price ($/Sh)
                          Options/SARs Granted      to Employees in
                                   (#)                Fiscal Year
.......................... ...................... ....................... ...................... ......................
.......................... ...................... ....................... ...................... ......................
<S>                                 <C>                    <C>                     <C>                    <C>
       C. Gabrys                    0                      0                       0                      0
.......................... ...................... ....................... ...................... ......................

</TABLE>

                                       41
<PAGE>
<TABLE>
<CAPTION>

.......................... ...................... ....................... ...................... ......................
<S>                                 <C>                    <C>                     <C>                    <C>
       J. Bloomer                   0                      0                       0                      0
.......................... ...................... ....................... ...................... ......................
.......................... ...................... ....................... ...................... ......................
      R. Campbell                   0                      0                       0                      0
.......................... ...................... ....................... ...................... ......................
.......................... ...................... ....................... ...................... ......................
        J. Neary                 50,000                   100                    1.00                  1/23/12
.......................... ...................... ....................... ...................... ......................
.......................... ...................... ....................... ...................... ......................
       S. Kostiuk                   0                      0                       0                      0
.......................... ...................... ....................... ...................... ......................
</TABLE>


The following table sets forth information concerning each exercise of stock
options (or tandem SARs) and freestanding SARs during fiscal 2002 by each of the
Named Executive Officers and the value at December 31, 2002 of unexercised
options and SARs held by the Named Executive Officers:
<TABLE>
<CAPTION>

.......................................................................................................................
                   Aggregate Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
.......................................................................................................................
.................... ................. ................ ............................... ...............................
       (a)                (b)               (c)                     (d)                             (e)
.................... ................. ................ ............................... ...............................
.................... ................. ................ ............................... ...............................
       Name         Shares Acquired   Value Realized        Number of Securities        Value of Unexercised In-the
                    on Exercise (#)         ($)            Underlying Unexercised       Money Options/SARs at FY-End
                                                         Options/SARs at FY-End (#)                 ($)





                                                         Exercisable/Unexercisable       Exercisable/Unexercisable
.................... ................. ................ ............................... ...............................
.................... ................. ................ ............................... ...............................
<S>                        <C>               <C>               <C>    <C>                           <C>
C. Gabrys                  0                 0                 58,334/116,666                       0/0
.................... ................. ................ ............................... ...............................
.................... ................. ................ ............................... ...............................
J. Bloomer                 0                 0                 58,334/116,666                       0/0
.................... ................. ................ ............................... ...............................
.................... ................. ................ ............................... ...............................
R. Campbell                0                 0                 58,334/116,666                       0/0
.................... ................. ................ ............................... ...............................
.................... ................. ................ ............................... ...............................
J. Neary                   0                 0                 12,500/37,500                        0/0
.................... ................. ................ ............................... ...............................
.................... ................. ................ ............................... ...............................
S. Kostiuk                 0                 0                 50,000/100,000                       0/0
.................... ................. ................ ............................... ...............................
</TABLE>



COMPENSATION OF DIRECTORS

There is no arrangement for the cash compensation of directors.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

There are currently no employment agreements between the Company and any of its
named executive officers.


                                       42
<PAGE>



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

The following table sets forth the information as at December 31, 2002 with
respect to compensation plans (including individual compensation arrangements)
under which equity securities of the Company are authorized for issuance:
<TABLE>
<CAPTION>

                      Equity Compensation Plan Information

................................ ............................ ............................ ............................
Plan category                   Number of securities to be    Weighted average exercise      Number of securities
                                  issued upon exercise of       price of outstanding        remaining available for
                                   outstanding options,         options, warrants and           future issuance
                                    warrants and rights                rights
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
                                            (a)                          (b)                          (c)
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
<S>                                          <C>                          <C>                          <C>
Equity compensation plans                    0                            0                            0
approved by security holders
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
Equity compensation plans not             725,000                       $1.00                       475,000
approved by security holders
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
Total                                     725,000                       $1.00                       475,000
................................ ............................ ............................ ............................
</TABLE>

The Company's 2001 Stock Option Plan (the "Plan) was established to provide
equity incentives to employees, including officers, non-employee members of the
board of directors of the Company, and other eligible persons to provide a means
through which the Company may attract able persons to serve the Company, by
granting such persons options to purchase shares of stock of the Company. The
Plan permits the granting of incentive stock options and non-qualified stock
options. The maximum number of common shares that may be issued pursuant to
options granted under this Plan is 1,200,000 common shares. The exercise price
of an option is established by the fair market value of the common shares of the
Company on the date of which the option is granted.


(a) Security ownership of certain beneficial owners.

The following table sets forth information, as of April 11, 2003, for any person
(including any "group") who is known to the Company to be the beneficial owner
of more than five percent of any class of the Company's voting securities:
<TABLE>
<CAPTION>

................................ ............................ ............................ ............................
             (1)                            (2)                          (3)                          (4)
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
        Title of Class                   Name and                    Amount and                Percent of Class
                                Address of Beneficial Owner  Nature of Beneficial Owner
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
<S>                                  <C>                              <C>                            <C>
        Common Shares                Elaine L. Collins                3,370,000                      28.05
                                   6176 Laurelwood Drive
                                      Reno, NV 89509
                                            USA
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
        Common Shares              Paradon Capital, Inc.              2,770,000                      23.06
                                 `Sunstead', 9 Farringdon
                                  Close, Paradise Heights
                                 St. James, Barbados, West
                                          Indies
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
        Common Shares                 Joel K. Bloomer                 7,048,234                      58.39

</TABLE>


                                       43
<PAGE>
<TABLE>
<CAPTION>

                                   6176 Laurelwood Drive
                                      Reno, NV 89509
                                            USA
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
<S>                               <C>                                 <C>                            <C>
        Common Shares             Dr. Christopher Gabrys              3,104,000                      25.84
                                900 South Meadows Parkway,
                                         Apt. 3513
                                      Reno, NV 89511
                                            USA
................................ ............................ ............................ ............................
</TABLE>


(b) Security ownership of management.

The following table sets forth information, as of April 11, 2003, as to each
class of equity securities of the Company beneficially owned by all directors,
each of the Named Executive Officers, and directors and executive officers of
the registrant as a group. Shown in column (3) is the total number of shares
beneficially owned and in column (4) the percent of class so owned. Beneficial
ownership has been determined in accordance with Rule 13d-3 of the Securities
Exchange Act of 1934, as amended. Generally, a person is deemed to be the
beneficial owner of a security if he has the right to acquire voting or
investment power within 60 days of the date of this Report.
<TABLE>
<CAPTION>

................................ ............................ ............................ ............................
             (1)                            (2)                          (3)                          (4)
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
        Title of Class                   Name and                    Amount and                Percent of Class
                                Address of Beneficial Owner  Nature of Beneficial Owner
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
<S>                                   <C>                            <C>                           <C>
        Common Shares                 Joel K. Bloomer               7,048,234 (1)                    58.39
                                   6176 Laurelwood Drive
                                      Reno, NV 89509
                                            USA
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
        Common Shares                J. Michael Neary                52,500 (2)                      0.44
                                    542 SW 298th Street
                                   Federal Way, WA 98023
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
        Common Shares                  Scott Kostiuk                 50,000 (3)                      0.41
                                 34 Powell Street, Apt. 4A
                                   Vancouver, BC V6A 1E7
                                          Canada
................................ ............................ ............................ ............................
................................ ............................ ............................ ............................
                                  Directors and Executive             7,150,734                      58.93
                                    Officers as a group
................................ ............................ ............................ ............................
</TABLE>


1.       Includes 58,334 shares Mr. Bloomer has the right to acquire within
         sixty days from options and 3,370,000 shares owned by Mr. Bloomer's
         spouse, Elaine L. Collins. Mr. Bloomer has limited power of attorney to
         dispose of 3,000,000 shares owned by Christopher Gabrys and 500,000
         shares owned by Rick Campbell.

2.       Includes 12,500 shares Mr. Neary has the right to acquire within sixty
         days from options. 40,000 shares are owned jointly with Mr. Neary's
         spouse, Sandra A. Neary.

3.       Includes 50,000 shares Mr. Kostiuk has the right to acquire within
         sixty days from options.


                                       44
<PAGE>

(c)      As of April 11, 2003, there are no arrangements that may result in a
         change in control of the Company.



                                       45
<PAGE>



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In December 2001, the Company converted advances to three officers
(stockholders) of the Company into interest bearing notes receivable. The notes
bear interest at 7% per annum, with interest payable quarterly. On December 31,
2002, $80,000 in notes receivable were sold to officers (stockholders) in
exchange for a reduction in advances from these officers (stockholders). The
sale of notes resulted in the Company recording a charge of $57,027 for
forgiveness of notes receivable. The outstanding principal notes receivable
balance of $40,000 at December 31, 2002 is due on December 31, 2003.




                                       46
<PAGE>


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

(a) The following exhibits are included herein:

Exhibit       Description
-------       ------------------------------------------------------------------

     3.1  Certificate of  Incorporation of Indigo Energy,  Inc.(incorporated  by
          reference  to  the  Company's  Registration  Statement  on  Form  SB-2
          (Commission File Number 333-42026), filed on July 21, 2000)

     3.2  Amendment  to   Certificate   of   Incorporation   of  Indigo  Energy,
          Inc.(incorporated by reference to the Company's Registration Statement
          on Form SB-2  (Commission  File Number  333-42026),  filed on July 21,
          2000)

     3.3  Amendment  to   Certificate   of   Incorporation   to  Indigo  Energy,
          Inc.(incorporated by reference to the Company's Registration Statement
          on Form SB-2  (Commission  File Number  333-42026),  filed on July 21,
          2000)

     3.4  By-Laws of Indigo  Energy,  Inc.  (incorporated  by  reference  to the
          Company's  Registration Statement on Form SB-2 (Commission File Number
          333-42026), filed on July 21, 2000)

     4.1  Specimen of Common Stock Certificate.(incorporated by reference to the
          Company's  Registration Statement on Form SB-2 (Commission File Number
          333-42026), filed on July 21, 2000)

     10.1 Product  Purchase  Agreement,  dated May 24, 2000,  by and between the
          Company and  CalNetix  (incorporated  by  reference  to the  Company's
          Registration   Statement   on  Form  SB-2   (Commission   File  Number
          333-42026), filed on July 21, 2000)

     10.2 Supply Agreement, dated September 18, 2000, by and between the Company
          and Toray Composites  (America)(incorporated by reference to Amendment
          No. 2 to the Company's Registration Statement on Form SB-2 (Commission
          File Number 333-42026), filed on December 19, 2000)

     10.3 Company's  2001 Stock  Option Plan  (incorporated  by reference to the
          Company's Quarterly Report on Form 10-QSB, filed on November 21, 2001)


(b) Reports on Form 8-K filed during the quarter ended December 31, 2002:

              (1) Report dated November 26, 2002 announcing the issuance of the
              Company's first patent by the U.S. Patent and Trademark Office.



                                       47
<PAGE>



ITEM 14. CONTROLS AND PROCEDURES.

The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, the Chief Executive and Chief Financial Officers of the Company
concluded that the Company's disclosure controls and procedures were adequate.

The Company made no significant changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation of those controls by the Chief Executive and Chief Financial
Officers.


                                       48
<PAGE>



SIGNATURES

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


                                        INDIGO ENERGY, INC.


Date:    April 13, 2003      /s/ Joel K. Bloomer
                             ---------------------------
                             Joel K. Bloomer
                             Chairman of the Board, President & Chief Executive
                             Officer


Date:    April 13, 2003      /s/ Scott Kostiuk
                             ---------------------------
                             Scott Kostiuk
                             Secretary & Treasurer and
                             Chief Financial Officer


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


/s/ Joel K. Bloomer
-------------------------------------
Joel K. Bloomer, Chairman of the Board & President          Date: April 13, 2003


/s/ J. Michael Neary
-------------------------------------
J. Michael Neary, Director                                  Date: April 13, 2003


/s/ Scott Kostiuk
-------------------------------------
Scott Kostiuk, Secretary and Treasurer                      Date: April 13, 2003



                                       49
<PAGE>



CERTIFICATIONS

I, Joel K. Bloomer, certify that:

1. I have reviewed this annual report on Form 10-KSB of Indigo Energy, 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 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
functions):

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 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 13, 2003

/s/ Joel K. Bloomer
--------------------
Chairman of the Board, President and Chief Executive Officer



                                       50
<PAGE>


I, Scott Kostiuk, certify that:

1. I have reviewed this annual report on Form 10-KSB of Indigo Energy, 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 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
functions):

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 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 13, 2003

/s/ Scott Kostiuk
------------------
Secretary & Treasurer and Chief Financial Officer


                                       51
<PAGE>