Attached files
file | filename |
---|---|
EX-32.1 - CEO 906 CERTIFICATION - ST JOSEPH INC | gm906certq.htm |
EX-31.1 - CEO 302 CERTIFICATION - ST JOSEPH INC | gm302certq.htm |
EX-31..2 - TREASURER 302 CERTIFICATION - ST JOSEPH INC | kj302certq.htm |
EX-32.2 - TREASURER 906 CERTIFICATION - ST JOSEPH INC | kj906certq.htm |
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2011
OR
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 0-49936
ST. JOSEPH, INC.
(Exact name of registrant as specified in its charter)
Colorado |
|
CH 47-0844532 |
(State or other jurisdiction of |
|
(I.R.S. Employer |
incorporation or organization) |
|
Identification No.) |
|
|
|
|
|
|
4870 S. Lewis, Suite 250 Tulsa, OK |
|
74105 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrants telephone number, including area code (918) 742-1888
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o
1
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 11,242,302 shares as of May 4, 2011.
2
ST. JOSEPH, INC.
TABLE OF CONTENTS
Page |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
||
3
ST. JOSEPH, INC.
FINANCIAL STATEMENTS
March 31, 2011
Index to Financial Statements
|
PAGE # |
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) |
|
|
|
|
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
i
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ST.
JOSEPH, INC.
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
||||||||
Unaudited
|
Audited
|
|||||||
March
31,
|
December
31,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
|
$ | 9,219 | $ | 8,406 | ||||
Accounts
receivable, net of allowance for doubtful
accounts of $2,208
|
56,382 | 90,276 | ||||||
Total
current assets
|
65,601 | 98,682 | ||||||
Property
and equipment, net of accumulated depreciation of $152,191 and $151,904
respectively
|
1,935 | 2,222 | ||||||
Deposits
|
1,230 | 1,230 | ||||||
Total
Assets
|
$ | 68,766 | $ | 102,134 | ||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
$ | 224,532 | $ | 214,106 | ||||
Accrued
liabilities
|
15,377 | 14,190 | ||||||
Accrued
preferred dividend
|
47,423 | 58,175 | ||||||
Notes
payable:
|
||||||||
Line
of Credit
|
- | - | ||||||
Bank Loan
|
168,974 | 174,234 | ||||||
Loan
from Officer
|
16,000 | 16,000 | ||||||
Total
current liabilities |
472,306 | 476,705 | ||||||
STOCKHOLDERS'
DEFICIT:
|
||||||||
Stock subscription receivable
|
- | (25,000 | ) | |||||
Preferred
stock, Series A, $.001 par value, $3.00 face value; 25,000,000 shares
authorized, 5,708
shares issued and outstanding
|
6 | 6 | ||||||
Common
stock, $.001 par value; 100,000,000 shares
authorized, 2011-11,212,302 and 2010-11,172,302 issued
and outstanding
|
11,212 | 11,172 | ||||||
Additional
paid-in capital
|
2,326,026 | 2,306,066 | ||||||
Retained
deficit
|
(2,740,784 | ) | (2,666,815 | ) | ||||
Total
Stockholders' Deficit
|
(403,540 | ) | (374,571 | ) | ||||
Total
Liabilities and Stockholders' Deficit
|
$ | 68,766 | $ | 102,134 |
The accompanying footnotes are an integral part of these financial statements
4
ST.
JOSEPH, INC.
|
||||||||||||||||
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
|
||||||||||||||||
|
Quarter Ended
|
|||||||||||||||
|
March 31,
|
|||||||||||||||
|
|
2011
|
2010
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Contract
|
$ | 113,134 | $ | 99,668 | ||||||||||||
COST
OF REVENUES
|
87,750 | 80,050 | ||||||||||||||
Gross
Margin
|
25,384 | 19,618 | ||||||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||
General
and Administrative Expenses
|
92,756 | 104,137 | ||||||||||||||
Depreciation
and Amortization
|
287 | 287 | ||||||||||||||
Total
Costs and Expenses
|
93,043 | 104,424 | ||||||||||||||
Operating
Income (Loss)
|
(67,659 | ) | (84,806 | ) | ||||||||||||
OTHER
INCOME AND (EXPENSE):
|
||||||||||||||||
Other
Income (expense)
|
75 | - | ||||||||||||||
Interest
Expense
|
(6,385 | ) | (2,818 | ) | ||||||||||||
Net
Other Expense
|
(6,310 | ) | (2,818 | ) | ||||||||||||
Loss
before provision for income taxes
|
(73,969 | ) | (87,624 | ) | ||||||||||||
PROVISION
FOR INCOME TAXES:
|
||||||||||||||||
Provision
for Federal income tax
|
- | - | ||||||||||||||
Provision
for State income tax
|
- | - | ||||||||||||||
Total
provision for income taxes
|
- | - | ||||||||||||||
Loss
before benefit from tax loss carryforward
|
(73,969 | ) | (87,624 | ) | ||||||||||||
Benefit
from tax loss carryforward
|
- | - | ||||||||||||||
Net
Loss
|
$ | (73,969 | ) | $ | (87,624 | ) | ||||||||||
Loss
applicable to common stockholders
|
$ | (73,969 | ) | $ | (87,624 | ) | ||||||||||
Basic
and diluted loss per common share
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||||||
Weighted
average common shares outstanding
|
11,190,969 | 10,878,969 |
The accompanying footnotes are an integral part of these financial statements
5
ST.
JOSEPH, INC.
|
||||||||||||||||||||||||||||
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
|
||||||||||||||||||||||||||||
|
Additional |
Stock |
||||||||||||||||||||||||||||||||
Preferred Stock-Series A |
Common Stock |
Paid-in |
Retained |
Subscription |
|||||||||||||||||||||||||||||
Shares |
Par value |
Shares |
Par value |
Capital |
Deficit |
Receivable |
Total |
||||||||||||||||||||||||||
Balance
December 31, 2010 |
5,708 | $ | 6 | 11,172,302 | $ | 11,172 | $ | 2,306,066 | $ | (2,666,815 | ) | $ | (25,000 | ) | $ | (374,571 | ) | ||||||||||||||||
Stock
Subscription Receivable |
- | - | - | - | - | - | 25,000 | 25,000 | |||||||||||||||||||||||||
Sale of common
stock @$0.50 per share |
- | - | 40,000 | 40 | 19,960 | - | - | 20,000 | |||||||||||||||||||||||||
Net loss for the quarter ended March 31, 2011 | - | - | - | - | - | (73,969 | ) | - | (73,969 | ) | |||||||||||||||||||||||
Balance
March 31, 2011 |
5,708 | $ | 6 | 11,212,302 | $ | 11,212 | $ | 2,326,026 | $ | (2,740,784 | ) | $ | - | $ | (403,540 | ) |
The accompanying footnotes are an integral part of these financial statements
6
ST.
JOSEPH, INC.
|
||||||||
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
||||||||
|
||||||||
Quarter
Ended
|
||||||||
March
31,
|
||||||||
OPERATING
ACTIVITIES
|
2011
|
2010
|
||||||
Net
income (loss)
|
$ | (73,969 | ) | $ | (87,624 | ) | ||
Adjustments
to reconcile net loss to net cash provided by (used
in) operating activities:
|
||||||||
Depreciation
and amortization
|
287 | 287 | ||||||
Gain
on settlement of note payable due to related party and
related accrued interest
|
- | - | ||||||
Lawsuit
settlement for common shares
|
- | - | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Increase/decrease
in accounts receivable
|
33,894 | 4,701 | ||||||
Increase
/decrease in accounts payable
|
10,426 | 3,469 | ||||||
Increase/decrease
in accrued liabilities
|
1,187 | 553 | ||||||
Net
cash provided by (used in) operating activities
|
(28,175 | ) | (78,614 | ) | ||||
INVESTING
ACTIVITIES
|
||||||||
Equipment
acquisitions
|
- | - | ||||||
Net
cash used in investing activities
|
- | - | ||||||
FINANCING
ACTIVITIES
|
||||||||
Repayment on bank loan
|
(5,260 | ) | - | |||||
Settlement
of notes payable to related parties
|
- | - | ||||||
Proceeds
from related party
|
- | - | ||||||
Proceeds
from officer loan and notes payable
|
- | - | ||||||
Payments
on preferred stock dividends
|
(10,752 | ) | (8,064 | ) | ||||
Proceeds
from sale of common stock
|
45,000 | 100,000 | ||||||
Net
cash provided by (used in) financing activities
|
28,988 | 91,936 | ||||||
INCREASE
(DECREASE) IN CASH
|
813 | 13,322 | ||||||
CASH
AT BEGINNING OF PERIOD
|
8,406 | 149,981 | ||||||
CASH
AT END OF PERIOD
|
$ | 9,219 | $ | 163,303 | ||||
SUPPLEMENTAL
NON-CASH INVESTING AND FINANCING INFORMATION:
|
||||||||
Conversion of preferred stock into common stock
|
$ | - | $ | - | ||||
Conversion of notes payable into common stock
|
$ | - | $ | - | ||||
Conversion of bank line of credit into loan
|
$ | - | $ | - | ||||
SUPPLEMENTAL
INFORMATION:
|
||||||||
Cash paid for Taxes
|
$ | - | $ | - | ||||
Cash paid for interest
|
$ | 2,856 | $ | 2,818 |
The accompanying footnotes are an integral part of these financial statements
7
ST. JOSEPH, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
The condensed balance sheet at December 31, 2010 has been derived from financial statements included in the Form 10-K. The accompanying unaudited financial statements at March 31, 2011 presented herein have been prepared by St. Joseph, Inc. (the "Company") in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's annual report on Form 10-K for the year ended December 31, 2010.
In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The results of operations presented for the three ended March 31, 2011 are not necessarily indicative of the results to be expected for the year.
There is no provision for dividends for the quarter to which this quarterly report relates.
Financial data presented herein are unaudited.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred recurring losses and has negative working capital and a net capital deficiency at March 31, 2011 and December 31, 2010. These factors, among others, may indicate that the Company will be unable to continue as a going concern.
The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to generate the necessary cash flows with increased sales revenue and a reduction of general and administrative expenses over the next 12 months. However, should the Company's operations not provide sufficient cash flow; the Company has plans to raise additional working capital through debt and/or equity financings. Insiders have loaned working capital to the Company on an as-needed basis over the past two years; however, there are no formal committed financing arrangements to provide the Company with working capital. There is no assurance the Company will be successful in producing increased sales revenues, attaining profitability, or obtaining additional funding through debt and equity financings.
(2) Bank Loan
The Company had a $200,000 line of credit of which $180,000 was unpaid and outstanding at December 31, 2009. The interest rate on the credit line was 6.79 percent.
In August 2010, the Company converted the line of credit to a bank loan which is collateralized by all of StafTek Services, Inc. assets, including all receivables and property and equipment. The bank loan agreement included the
8
following provisions 1) An agreement to provide insurance coverage for the collateralized assets in the amount of $180,000; 2) covenants to provide certain financial documents to the bank on a monthly and annual basis. The interest rate on the loan is 6.5 percent and the monthly principal and interest payment is $2,698. A final balloon payment is due on the maturity date of August 31, 2013. As of March 31, 2011, the bank loan agreement has not been executed and finalized by either party. Accordingly, the bank loan balance of $168,974 as of March 31, 2011 ($174,234 as of December 31, 2010) has been classified as a current liability on the accompanying consolidated financial statements. The Company continues to make the required payments according to the bank loan agreement and is current on the note as of March 31, 2011.
(3) Shareholders' Equity
Preferred Stock
During the three months ended March 31, 2011, the Company did not issue any Series A Convertible Preferred Stock. The Board of Directors is authorized to issue shares of Series A Convertible Preferred Stock and to fix the number of shares in such series as well as the designation, relative rights, powers, preferences, restrictions, and limitations of all such series. In December 2003, the Company issued 386,208 shares of Series A Convertible Preferred Stock and a balance of 5,708 remains outstanding at March 31, 2011. Each share of Series A Convertible Preferred Stock is convertible to one share of common stock and has a yield of 6.75% dividend per annum, payable on a quarterly basis out of funds legally available therefore, for a period of 5 years or until December 31, 2008. There is an accrued amount of Series A Convertible Preferred Stock dividends in the amount of $47,423 as of March 31, 2011 ($58,175 at December 31, 2010). This amount was lowered by $10,752 in the three months ended March 31, 2011. The Company is currently making dividend payments pursuant to the terms of a settlement agreement, as disclosed in an 8-K released on May 9, 2009.
Common Stock
In a private placement during the quarter ended March 31, 2011, the Company sold 40,000 shares of common stock to one accredited investor at a price of $0.50 per share for gross proceeds of $20,000. No underwriters were used and no underwriting discounts or commissions were payable. The shares have been offered and sold by the Company in reliance upon the exemption from registration provided by Regulation D promulgated under the Securities Act of 1933, as amended. The shares were offered and sold to only to accredited investors; as such the term is defined by Rule 501 of Regulation D. All of the shares sold in the private placement are restricted securities pursuant to Rule 144.
Common Stock Options
The following schedule summarizes the changes in the Company's equity awards for the three months ended March 31, 2011:
Weighted
|
Weighted
|
|||||||||||||||||||
Awards
|
Average
|
Average
|
||||||||||||||||||
Outstanding
|
Exercise
|
Exercise
|
Remaining
|
Aggregate
|
||||||||||||||||
and
|
Price
|
Price
|
Contractual
|
Intrinsic
|
||||||||||||||||
Exercisable
|
Per
Share
|
Per
Share
|
Life
|
Value
|
||||||||||||||||
Outstanding
at January 1, 2011
|
460,000 | $ | 1.05 | $ | 1.05 | |||||||||||||||
Granted
|
- | $ | 1.05 | $ | 1.05 | |||||||||||||||
Exercised
|
- | $ | - | $ | - | |||||||||||||||
Cancelled/Expired
|
- | $ | 1.05 | $ | - | |||||||||||||||
Outstanding
at March 31, 2011
|
460,000 | $ | 1.05 | $ | 1.05 |
.45
years
|
$ | - |