SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: March 31, 2002
Commission File Number: 0-23892
Rainwire Partners, Inc.
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(Exact Name of Registrant as specified in its charter
Delaware 57-0941152
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(State or other jurisdiction of incorporation or organization (I.R.S. Employer Identification
No.)
2020 Federal Road
Roswell, GA 30075
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Address of Principal executive offices of Incorporation or Zip Code
organization
770-643-9094
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Registrants telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities and 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 last 90 days.
YES [X] NO []
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as to the latest practical date.
CLASS No. of shares Outstanding on March 31, 2002
Common Stock 9,909,886
Par Value $.001
Per share
RAINWIRE PARTNERS, INC.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Page
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
March 31, 2002 (unaudited) and December 31, 2001................... 1
Unaudited Condensed Consolidated Statements of Operations
for the three months ended March 31, 2002 and 2001................. 2
Unaudited Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 2002 and 2001................. 3
Statement of Changes in Stockholders' equity for the period
December 31, 2000 to March 31, 2002 (unaudited).................... 4
Notes to Condensed Consolidated Financial Statements .............. 5
Item 2. Management's Discussion and Plan of Operation...................... 5
PART II OTHER INFORMATION Page
Item 1. Legal Proceedings.................................................. 7
Item 2. Changes in Securities and Use of Proceeds.......................... 7
Item 3. Defaults Upon Senior Securities.................................... 7
Item 4. Submission of Matters to a Vote of Security Holders................ 7
Item 5. Other Information.................................................. 7
Item 6. Exhibits and Reports on Form 8-K................................... 7
RAINWIRE PARTNERS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS OF DISCONTINUED BUSINESS 2002 2001
----------- -----------
(unaudited)
CURRENT ASSETS
Cash $ -- $ 788
----------- -----------
TOTAL CURRENT ASSETS $ -- $ 788
=========== ===========
LIABILITIES OF DISCONTINUED BUSINESS
CURRENT LIABILITIES
Related Party loans $ 125,855 $ 114,925
Accounts payable 817,974 813,167
Accrued business disposal costs and expenses 33,012 46,987
Other accrued liabilities 20,593 23,143
----------- -----------
TOTAL CURRENT LIABILITIES 997,434 998,222
----------- -----------
REDEEMABLE PREFERRED STOCK
Par value $.001; authorized 2,500,000 shares
Series C, 24,959 shares outstanding 52,911 52,911
Serues D, 500,000 shares outstanding 50,000 50,000
----------- -----------
102,911 102,911
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value; authorized,20,000,000 shares
19,909,886 shares issued, 9,909,886 shares outstanding 19,910 19,910
Paid-in capital 1,421,672 1,421,672
Accumulated (deficit) (2,491,927) (2,491,927)
Treasury Stock, 10,000,000 shares (50,000) (50,000)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,100,345) (1,100,345)
----------- -----------
$ -- $ 788
=========== ===========
The accompanying notes are an integral part of these financial statements.
1
RAINWIRE PARTNERS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
INCEPTION
OF DEVELOPMENT
STAGE
THREE MONTHS ENDED (JANUARY 1,2001)
MARCH 31, TO
-------------------------- MARCH 31,
2002 2001 2002
---------- ---------- ---------
Revenues $ -- $ -- $ --
Expenses
---------- ---------- ---------
Income (loss) from continuing operations -- -- --
Discontinued Operations:
Loss from discontinued operations --
---------- ---------- ---------
Net income $ -- $ -- $ --
---------- ---------- =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 12,718,220 7,609,886
========== =========
Basic And Diluted Net Income Per Common Share $ -- $ --
Income From Discontinued Operations -- --
---------- ---------
Basic And Diluted Net Income Per Common Share $ -- $ --
========== =========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2
RAINWIRE PARTNERS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
INCEPTION
OF DEVELOPMENT
STAGE
THREE MONTHS ENDED (JANUARY 1, 2001)
MARCH 31, TO
------------------------- MARCH 31,
2002 2001 2002
--------- --------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Continuing Operations $ -- $ -- $ --
Discontinued Operations:
Stock issued for services 2,500
Capital contributed for services 40,000
Adjustments to reconcile net loss to net cash flows
used by discontinued activities
Income (loss) from operations of discontinued business -- --
Changes in current assets and liabilities:
Accounts receivable 34,662 21,962
Other current assets 12,700
Deposits 6,257
Accrued liabilities (16,525) (46,366) (16,525)
Provision for loss on disposal of the business (553,247)
Accounts payable 4,807 4,302 348,457
--------- --------- ---------
Net cash flows used by discontinued activities (11,718) (1,145) (144,153)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in other assets -- -- 6,255
--------- --------- ---------
Net cash flows from (to) investing activities -- -- 6,255
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 10,000
Related Party Loans 10,930 125,855
--------- --------- ---------
Net cash flows from financing activities 10,930 135,855
--------- --------- ---------
NET CHANGE IN CASH FLOWS FOR THE PERIOD (788) (1,145) (2,043)
CASH, AT BEGINNING OF PERIOD, 788 2,043 2,043
--------- --------- ---------
CASH, AT END OF PERIOD $ -- $ 898 $ --
========= ========= =========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
RAINWIRE PARTNERS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IS SHAREHOLDERS' EQUITY
COMMON STOCK
------------------------ PAID-IN ACCUMULATED TREASURY
SHARES AMOUNT CAPITAL (DEFICIT) STOCK TOTAL
----------- -------- ---------- ----------- --------- -----------
Balance December 31, 2000 7,609,886 $ 7,610 $1,321,472 $(2,491,927) $ -- $(1,162,845)
Shares issued for legal services at $.025 per
share on August 29, 2001 100,000 100 2,400 2,500
Shares sold at $.05 per share
on September 30, 2001 200,000 200 9,800 10,000
Shares issued to retire debt on August 29, 2001
at $.005 per share 12,000,000 12,000 48,000 60,000
Management services contributed to capital 40,000 40,000
Purchase of 10,000,000 shares as treasury stock
for issuance of 500,000 shares of Series D
convertible debentures, October 15, 2001 (50,000) (50,000)
----------- -------- ---------- ----------- --------- -----------
Balance December 31, 2000 19,909,886 19,910 1,421,672 (2,491,927) (50,000) (1,100,345)
Net (loss) for 1st quarter, 2002 -- --
----------- -------- ---------- ----------- --------- -----------
BALANCE, March 31, 2002 39,819,772 $ 39,820 $2,843,344 $(4,983,854) $(100,000) $(1,100,345)
=========== ======== ========== =========== ========= ===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
RAINWIRE PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)
Note 1. Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the Company's financial position
as of March 31, 2002 and the consolidated results of its operations and cash
flows for the three months ended March 31, 2002 and 2001. Operating results for
the three months ended March 31, 2002 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2002.
These condensed financial statements should be read in conjunction with
the financial statements and notes thereto contained in the Company's Form
10-KSB for the year ended December 31, 2001.
Item 2. Management's Discussion And Analysis Of Financial Condition
And Results Of Operations.
This 10-QSB contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbors created thereby.
Investors are cautioned that certain statements in this 10-QSB are
"forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve known and unknown
risks, uncertainties and other factors. Such uncertainties and risks
include, among others, certain risks associated with the closing of the
Oasis transaction described herein, government regulation, and general
economic and business conditions. Actual events, circumstances, effects
and results may be materially different from the results, performance
or achievements expressed or implied by the forward-looking statements.
Consequently, the forward-looking statements contained herein should
not be regarded as representations by the Company or any other person
that the projected outcomes can or will be achieved.
The following discussion and analysis should be read in
conjunction with the Consolidated Financial Statements and Notes
thereto, appearing elsewhere in this Form 10-QSB.
A. Results of Operations.
In the first quarter of year 2002 there were no reported
revenues or cash flows from the discontinued operations.
5
The net cash flows used by discontinued activities in the
first quarter 2002 was $11,718 compared to the same period 2001 amount
of $1,145.
The cash at the end of the first quarter 2002 was reported in
the amount of $0 reduced from the same period 2001 cash at the end of
the period in the amount of $898.
B. Financial Condition.
The company's audit report for the year 2001 discloses a
"going" concern paragraph in reference to the company's concern for
continuing its existence in the future. This concern is highlighted by
the fact that the Company has a deficit since inception of
approximately $2,500,000 and a deficit in stockholders equity of
approximately of $1,100,345 and current liabilities of $998,222.
As of August 29, 2001, the company is proposing to exchange
stock with Oasis Group, Inc., a privately held company. The company
believes that upon the definite closing of this exchange it will be
able to better insure its survival.
Since December 31, 2000 the company closed its facilities,
terminated its employees and is pursuing the resolution of both
contingent assets and direct and contingent liabilities, which will
involve substantial legal costs. Oasis Group, Inc. has provided funding
for legal and operating expenses through loans to the company of
approximately $125,855 through March 31, 2002.
C. Plan of Operations.
For the near term, the Company is in the process of completing
its merger with Oasis Group, Inc. It has had no operations since
December 31, 2000 and is financially dependent on its shareholders,
related parties and /or management, who have financed its existence to
date.
Management of the Company believes it will be able to complete
the merger and be successful in its efforts to continue the Company's
existence. If the company is unsuccessful in completing the share
exchange with Oasis Group, Inc., the company anticipates ceasing all
activities and liquidating any and all remaining assets. In connection
withy the share exchange the company has filed a Registration
Statement/Information Statement/Proxy Statement on Form S-4 on January
14, 2002 and is currently responding to comments to the Securities
Exchange Commission. We expect responding to comments in the second
quarter 2002 and completing the share exchange by the third quarter
2002.
Upon completion of the share exchange, management anticipates
moving from the development stage to the operating by the third quarter
of 2002.
6
PART II OTHER INFORMATION
Item 1. Legal Proceedings
No material change.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
Under the terms of our Series D Preferred Stock, if the
Company shall fail to pay a dividend to the holders of the Series D for
two consecutive quarters, the Series D shall be convertible into fifty
million (50,000,000) shares of the common stock of the Company so long
as such dividends remain unpaid. As of the date of the filing of this
Annual Report, the Company has failed to pay a dividend for two
consecutive quarters and the conversion feature has been triggered,
although the holder has not converted the preferred stock. As of the
date of the filing of this Quarterly Report, the Company does not have
a sufficient number of authorized but unissued shares available to
effect such a conversion.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K:
On January 11, 2002, the Company filed a Current Report on
From 8-K reporting the execution of an Amended and Restated Plan and
Agreement to Exchange Stock with Oasis Group, Inc.
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on May 14, 2002.
Rainwire Partners, Inc.,
a Delaware corporation
By: /s/ Lyne Marchessault
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Name: Lyne Marchessault
Title: President
By: /s/ Peggy Evans
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Name: Peggy Evans
Title: Chief Financial and Accounting
Officer
8