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

                                ----------------

                                  FORM 10-KSB/A

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

                   For the fiscal year ended December 31, 2002

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

              for the transition period from _________ to _________

                           Commission File No. 0-27897

                                DUNE ENERGY, INC.
        (Exact name of small business issuer as specified in its charter)

               Delaware                                          95-4737507
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

         16 River Hollow Lane
            Houston, Texas                                          77027
(Address of principal executive offices)                         (Zip Code)

         Issuer's telephone number, including area code: (713) 960-0995

                                ----------------

           Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

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

                    Common Stock, $0.001 par value per share

                                ----------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes |_| No |X|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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|

The Issuer's total consolidated revenues for the year ended December 31, 2002,
were $0.

The aggregate market value of the Common Stock held by non-affiliates of the
registrant (treating all executive officers and directors of the registrant, for
this purpose, as if they may be affiliates of the registrant) was approximately
$0.

13,639,148 shares of the registrant's Common Stock were outstanding as of
October 29, 2003.

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

<PAGE>

                                     PART II

      This Amendment is being filed to include the audited financial statements
of the registrant for the year ended December 31, 2001.

Item 7. Financial Statements.

      Please see pages F-1 to F-9 immediately below.


                                       2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
  Dune Energy, Inc. (formerly IP Factory, Inc.)
  Houston, Texas

We have audited the accompanying balance sheets of Dune Energy, Inc. (formerly,
IP Factory, Inc.) as of December 31, 2002 and 2001, and the related statements
of operations, stockholders' deficit and cash flows for each of the years then
ended. These financial statements are the responsibility of Dune's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dune Energy, Inc. (formerly IP
Factory, Inc.) as of December 31, 2002 and 2001and the results of its operations
and its cash flows for each of the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that Dune will
continue as a going concern. As discussed in note 2 to the financial statements,
Dune has a significant accumulated deficit and significant working capital
deficiency at December 31, 2002; which raise substantial doubt about Dune's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in note 2. The financial statements do not include
any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities that might be
necessary should Dune be unable to continue as a going concern.

Malone & Bailey, PLLC
www.malone-bailey.com
Houston, Texas

November 7, 2003


                                      F-1
<PAGE>

                                DUNE ENERGY, INC.
                           (FORMERLY IP FACTORY, INC.)
                                 BALANCE SHEETS
                           December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                      ASSETS                               2002            2001
                                                                        -----------     -----------
<S>                                                                     <C>             <C>
Assets                                                                  $        --     $        --
                                                                        ===========     ===========

                       LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable and accrued expenses                                 $    82,771     $    82,771
  Note payable to stockholder                                               700,521         660,020
                                                                        -----------     -----------
         Total current liabilities                                          783,292         742,791

Stockholder's deficit:
  Preferred stock, $.001 par value, 1,000,000 authorized none issued             --              --
  Common stock, $.001 par value, 25,000,000 shares
    authorized, 6,223,027 shares issued and outstanding                       6,223           6,223
  Additional paid in capital                                              1,339,288       1,339,288
  Accumulated deficit                                                    (2,128,803)     (2,088,302)
                                                                        -----------     -----------
    Total stockholders' deficit                                            (783,292)       (742,791)
                                                                        -----------     -----------

         Total liabilities and stockholders' deficit                    $        --     $        --
                                                                        ===========     ===========
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-2
<PAGE>

                                DUNE ENERGY, INC.
                           (FORMERLY IP FACTORY, INC.)
                             STATEMENTS OF EXPENSES
                      Year Ended December 31, 2002 and 2001

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

Revenues                                          $        --       $        --

Provision for asset impairment                             --           169,104
General and administrative                                 --             1,875
                                                  -----------       -----------

  Operating loss                                           --          (170,979)

Interest expense                                       40,501            38,160
                                                  -----------       -----------

Net loss                                          $   (40,501)      $  (209,139)
                                                  ===========       ===========

Basic and diluted net loss per share              $     (0.01)      $     (0.03)
                                                  ===========       ===========

Weighted average shares outstanding                 6,223,027         6,159,727
                                                  ===========       ===========

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-3
<PAGE>

                                DUNE ENERGY, INC.
                           (FORMERLY IP FACTORY, INC.)
                       STATEMENT OF STOCKHOLDERS' DEFICIT
                     Years Ended December 31, 2001 and 2002

<TABLE>
<CAPTION>
                                                                 Additional
                                         Common Stock             Paid-in       Accumulated
                                     Shares         Amount        Capital         Deficit          Total
                                  -----------    -----------    -----------     -----------     -----------
<S>                                 <C>          <C>            <C>             <C>             <C>
Balances, December 31, 2000         5,016,527    $     5,016    $ 1,338,620     $(1,879,163)    $  (535,527)

Recapitalization                    1,019,000          1,019         (1,019)             --              --

Issuance of stock for services        187,500            188          1,687              --           1,875

   Net loss                                --             --             --        (209,139)       (209,139)
                                  -----------    -----------    -----------     -----------     -----------

Balances, December 31, 2001         6,223,027          6,223      1,339,288      (2,088,302)       (742,791)

   Net loss                                --             --             --         (40,501)        (40,501)
                                  -----------    -----------    -----------     -----------     -----------

Balances, December 31, 2002         6,223,027    $     6,223    $ 1,339,288     $(2,128,803)    $  (783,292)
                                  ===========    ===========    ===========     ===========     ===========
</TABLE>

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-4
<PAGE>

                                DUNE ENERGY, INC.
                           (FORMERLY IP FACTORY, INC.)
                            STATEMENTS OF CASH FLOWS
                     Period from December 31, 2002 and 2001

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

Net loss                                                  $(40,501)   $(209,139)
Adjustments to reconcile net loss to cash used in
     operating activities:
         Stock for services                                     --        1,875
         Asset impairment                                       --      169,104
         Accrued interest                                   40,501       38,160
                                                          --------    ---------

CHANGE IN CASH                                                  --           --
Cash, beg. of period                                            --           --
Cash, end of period                                       $     --    $      --
                                                          ========    =========

Supplemental information:
  Income taxes paid                                       $     --    $      --
                                                          ========    =========
  Interest paid                                           $     --    $      --
                                                          ========    =========

                 See accompanying summary of accounting policies
                       and notes to financial statements.


                                      F-5
<PAGE>

                                DUNE ENERGY, INC.
                           (FORMERLY IP FACTORY, INC.)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Nature of business. In May 2001, IP Factory, Inc. ("IP") a non-operating public
company acquired all of the issued and outstanding shares of common stock of
Hitthebeach.com, Inc., a privately held corporation for 20,066,109 shares of IP
common stock, or approximately 83% of the combined entity. For accounting
purposes this transaction was treated as an acquisition of IP and a
recapitalization of Hitthebeach.com, Inc.

Hitthebeach.com, Inc. (HTB) was incorporated in the State of Delaware on April
23, 1999, as a subsidiary of Beach Communications Group, Inc. (Beach). On that
date, HTB entered into an Agreement and Plan of Merger with Beach which provided
for, among other things, that each outstanding share of common stock of Beach
was converted into one share of the HTB's common stock.

In 2000 and 1999, HTB was engaged in selling advertising on its website. In
2001, HTB substantially curtailed its operations due to a depressed internet
market.

In May 2003 IP changed its name to Dune Energy, Inc. ("Dune"). Through June
2003, Dune was an inactive public corporation. As discussed in Note 5, Dune
began raising money by the sale of convertible debentures and plans to use the
proceeds to purchase and develop various oil and gas producing assets in South
Texas.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the balance sheet. Actual results could differ from
those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid financial
instruments with purchased maturities of three months or less.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized.

Basic Loss Per Share

Basic loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.


                                      F-6
<PAGE>

Recent Accounting Pronouncements

Dune does not expect the adoption of recently issued accounting pronouncements
to have a significant impact on Dune's results of operations, financial position
or cash flow.

NOTE 2 - GOING CONCERN

The financial statements have been prepared assuming that Dune will continue as
a going concern. Dune has a significant accumulated deficit and working capital
deficiency at December 31, 2002 and is unable to meet its obligations as they
come due; all of which raise substantial doubt about Dune's ability to continue
as a going concern. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
to the amounts and classification of liabilities that might be necessary should
Dune be unable to continue as a going concern.

Management's plans to support Dune's operations include borrowing additional
funds and raising additional capital. Dune's inability to obtain additional
capital or obtain such capital on favorable terms could have a material adverse
effect on its financial position, results of operations and its ability to
continue operations.

NOTE 3 - INCOME TAXES

Dune has incurred net losses and, therefore, has no tax liability. The net
deferred tax asset generated by the loss carry-forward has been fully reserved.
The valuation allowance increased approximately $14,000 in 2002. The cumulative
net operating loss carry-forward is approximately $250,000 at December 31, 2002,
and will expire in years through 2022.

Deferred income taxes consist of the following at December 31, 2002:

                                                                         2002
                                                                       --------
Long-term:
   Deferred tax assets                                                 $ 85,000
   Valuation allowance                                                  (85,000)
                                                                       --------
                                                                       $     --
                                                                       ========

NOTE 4 - COMMON STOCK

In May 2001, Dune issued 187,500 shares of common stock to a consultant.

NOTE 5 - SUSEQUENT EVENTS

On May 5, 2003, Dune issued 2,487,440 shares of stock to the majority
stockholder for a note payable totaling $715,353, including accrued interest
(interest accrued at 6%).

On May 7, 2003, Dune issued 1,725,000 for all of the outstanding common stock of
Merchant Builders, Inc. (Merchant), a privately held corporation. Merchant was a
development stage corporation with no assets and $16,500 in liabilities at May
7, 2003. The transaction resulted in an intangible asset of approximately
$18,000 which was subsequently impaired.

On May 7, 2003, the majority stockholder issued 1,000,000 shares of common stock
to the president of Dune. The shares were valued at $.01 per share based on the
Merchant transaction resulting in $10,000 in expense.


                                      F-7
<PAGE>

On May 7, 2003, Dune issued 1,000,000 shares of common stock to various
consultants. The shares were valued at $.01 per share based on the Merchant
transaction resulting in $10,000 of expense.

On June 3, 2003, Dune paid Penroc Oil Corporation a deposit of $174,800 for the
option to purchase 34.98% of Penroc's 2% working interest in the Los Mogotes
field located in Zapata County, Texas. The remaining balance of the purchase
price, $699,700 and 50,000 shares of Dune common stock are due no later than
June 30, 2004. The effective date of the agreement is February 1, 2003 with
respect to capital expenditures and April 1, 2003 with respect to revenue and
lease operating expenses. Dune's proportionate share of revenues generated at
Los Mogotes, less its proportionate share of lease operating expenses and
capital expenditures will be allocated to Dune as of those dates and applied to
adjust the purchase price due at closing.

On August 7, 2003, Dune formed Vaquero Partners, LLC ("VP") to acquire and
develop oil and gas leases in South Texas. Dune owns 85% with the other 15%
owned by Vaquero Oil & Gas, Inc. ("VOG"), a privately held corporation. Dune
contributed $558,000 to the LLC in 2003. The minority partner is not required to
contribute any cash. Dune's interest in the profits of the LLC are as follows:
85% until Dune receives distributions equal to two times the sum of its capital
contributions, 75% until Dune receives distributions equal to three times the
sum of its capital contributions and 60% thereafter. Losses are allocated first
among the Members in proportion to and to the extent of the positive balances in
their capital accounts and then 100% to Dune.

On August 22, 2003, VP leased 1,400 acres and purchased a non-refundable option
to lease an additional 6,800 acres of land in South Texas for approximately
$301,000. The initial lease term is six months and is automatically extended for
six month terms so long as Dune drills and completes a well capable of producing
oil or gas in paying quantities. Dune earns the ability to extend the term for
additional six month terms so long as a well capable of producing oil or gas in
paying quantities is drilled and completed within such subsequent six month
extension period. Dune is required to begin drilling a well of not less than
9,000 feet within the first six months or will be required to pay the owner of
the land $200,000.

On August 22, 2003, VP signed a two year agreement with VOG for VOG to act as
its operator of record with respect to the leased property noted above and to
generate market and sell prospects to third parties. Dune agreed to pay VOG
$150,000 in cash and 91,667 shares of Dune as a one-time advance on prospect
development fees and $25,000 per month for the first six months and $12,500 per
month for the next six months of the term.

In May through August 2003, Dune sold convertible debentures with a face value
of $382,500 to various individuals. The debentures are convertible into shares
of Dune at the option of the holder at $.45 per share. If the debentures are
converted by the maker or the holder, the holder will also receive additional
shares equal to 10% of the face value divided by $.45. The debentures accrue
interest at 10% per annum and are due in various months through February 2005.

In August and September 2003, Dune sold debentures with a face value of $504,000
to five individuals. Four of the debentures totaling $404,000 are convertible
into shares of Dune at the option of the holder at $.45 per share. The
debentures are personally guaranteed by the majority stockholder, accrue
interest at 10% per annum and are due in August and September 2004. The debt
holders received 217,527 shares of common stock valued at $2,175 which was
recorded as interest expense on the date issued.


                                      F-8
<PAGE>

On September 23, 2003, VP purchased a non-exclusive license to 20,000 square
miles of 3-D seismic data for $300,000. $40,000 was paid on September 23, 2003
with $80,000 due on or before December 29, 2003 and $180,000 due on or before
February 26, 2004.


                                      F-9
<PAGE>

Item 13. Exhibits, List and Reports on Form 8-K.

Exhibit Number                    Description
--------------------------------------------------------------------------------

3.1            * Amended and Restated Certificate of Incorporation

3.2            * By-Laws

4.1            * Form of Secured Convertible Promissory Note

10.1           * Plan and Agreement of Merger dated as of May 5, 2003 between
               the Registrant and Merchant Builders, Inc.

10.2           * Oil and Gas Lease and Option Agreement dated as of August 22,
               2003 between the Registrant and the Lessors named therein with
               respect to the Welder property

10.3           * Agreement dated as of October 30, 2003 between the Registrant
               and Penroc Oil Corporation with respect to Los Mogotes property

10.4           * Agreement dated as of September 26, 2003 between the Registrant
               and Seitel Data, Ltd. with respect to 3D seismic survey

10.5           * Operating Agreement of Vaquero Partners LLC

10.6           * Agreement dated as of August 22, 2003 by and among Vaquero
               Partners LLC, Vaquero * Oil & Gas, Inc., and the Registrant

10.6.1         Amendment dated November 17, 2003 to Agreement between Vaquero
               Partners LLC, Vaquero Oil & Gas, Inc., and the Registrant

10.7           Area of Mutual Interest Agreement dated November 17, 2003 between
               the Registrant and Vaquero Oil & Gas, Inc.

31.1           Certification of Chief Executive Officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002

31.2           Certification of Chief Financial Officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002

32.1           Certification pursuant to 18 U.S.C. 1350, adopted pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive
               Officer

32.2           Certification pursuant to 18 U.S.C. 1350, adopted pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Financial
               Officer

99.1           * Report of Independent Engineer With Respect to Welder Acreage

*     Filed as an exhibit to the registrant's report on Form 10-KSB for the year
      ended December 31, 2002.


                                       3
<PAGE>

                                   SIGNATURES

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

                                           DUNE ENERGY, INC.


Date: November 26, 2003                    By: /s/ Alan Gaines
                                               ---------------------------------
                                           Name:  Alan Gaines
                                           Title: Chief Executive Officer


Date: November 26, 2003                    By: /s/ Mark Harrington
                                               ---------------------------------
                                           Name:  Mark Harrington
                                           Title: 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/ Alan Gaines
------------------------------------
Name:  Alan Gaines
Title: Chairman, Chief Executive Officer, Director
Date: November 26, 2003


/s/ Mark Harrington
------------------------------------
Name:  Mark Harrington
Title: Chief Financial Officer, Director
Date: November 26, 2003


/s/ Steven Barrenchea
------------------------------------
Name:  Steven Barrenchea
Title: Secretary, Director
Date: November 26, 2003


                                       4