United States
                       Securities and Exchange Commission
                             Washington, D. C. 20549

                                  FORM 10 - QSB

        (MARK ONE)

 [X]  Quarterly Report pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934

                  For the Quarterly Period Ended May 31, 2002 or
                                             -----------------
 [ ]     Transition Report pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934

         For the Transition Period From                      to
                                              --------------    ---------------
                         COMMISSION FILE NUMBER 0-18091

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

       NORTH CAROLINA                                56-1200363
----------------------------------           -------------------------
(State or other jurisdiction of                     (I.R.S. Employer
 incorporation or organization)                    Identification No.)

                      28 East Court Street, P. O. Box 6847
                        Greenville, South Carolina 29606
 ------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (864) 271-7171
 ------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)

                                 Not Applicable
 ------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check  whether  the issuer  (1) has 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.

         Yes [X]    No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock, $.01 Par Value - 7,821,455 shares outstanding as of July 08, 2002

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


<PAGE>
<TABLE>
<CAPTION>

                                      INDEX


                               RSI HOLDINGS, INC.



<S>                                                                                                <C>
PART I.  FINANCIAL INFORMATION                                                                     PAGE

Item 1.  Financial Statements (Unaudited)

     Condensed Consolidated balance sheet - May 31, 2002                                               1

     Condensed  consolidated  statements  of operations - For the three and nine
     Months ended May 31, 2002 and three and five months ended May 31, 2001                            2

     Condensed consolidated statements of cash flows - For the nine Months ended
     May 31, 2002 and five months ended May 31, 2001                                                   3

     Condensed consolidated statements of changes in net assets in liquidation -
     For the one and four Months  ended  December  31, 2000                                            4

     Notes to condensed consolidated financial statements -- May 31, 2002                              5

Item 2.  Management's discussion and analysis of financial
         condition and results of operations                                                           9

PART II. OTHER INFORMATION                                                                            12

Item 1.  Legal Proceedings                                                                            12

Item 2.  Changes in Securities                                                                        12

Item 3.  Defaults upon senior securities                                                              12

Item 4.  Submission of Matters to a Vote of Security Holders                                          12

Item 5.  Other Information                                                                            12

Item 6.  Exhibits and Reports on Form 8-K                                                             12

SIGNATURES                                                                                            13


</TABLE>



<PAGE>

<TABLE>
<CAPTION>
                               RSI Holdings, Inc.
                      Condensed Consolidated Balance Sheet
                                   (Unaudited)
                                  May 31, 2002




Assets

<S>                                                                                            <C>
Current Assets:
     Cash                                                                                       $  158,049
     Accounts receivable                                                                            66,538
     Prepaid expenses and other                                                                     24,958
                                                                                               -----------
Total current assets                                                                               249,545

Property and equipment:
     Cost                                                                                           66,175
     Less accumulated depreciation                                                                  20,358
                                                                                               -----------
         Property and equipment - net                                                               45,817
                                                                                               -----------

Other assets:
     Intangible asset, net of
         amortization of $67,500 - Note D                                                        1,861,270
     Other                                                                                          32,023
                                                                                               -----------
         Total other assets                                                                      1,893,293
                                                                                               -----------
                                                                                               $ 2,188,655
                                                                                               ===========

Liabilities and shareholders' equity

Current liabilities:
     Accounts payable                                                                          $    69,412
     Accrued expenses                                                                               72,606
     Current maturities of long-term debt                                                          143,575
                                                                                               -----------
         Total current liabilities                                                                 285,593

Long-term debt - Note E                                                                          2,131,854

Shareholders' equity:
     Common Stock, $.01 par value-authorized
         25,000,000 shares, issued and outstanding
         23,464,820 shares at May 31, 2002                                                         234,648
     Additional paid-in capital                                                                  4,789,066
     Deficit                                                                                    (5,252,506)
                                                                                               -----------
                                                                                                  (228,792)
                                                                                               -----------
                                                                                               $ 2,188,655
                                                                                               ===========

</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       1
<PAGE>
<TABLE>
<CAPTION>


                                                                       RSI Holdings, Inc.
                                                 Condensed Consolidated Statements of Operations (Unaudited)
                                                         For the Three and Nine Months ended May 31, 2002
                                                            and Three and Five Months ended May 31, 2001



                                                 For the          For the               For the            For the
                                              Three Months       Nine Months          Three Months       Five Months
                                                  Ended            Ended                 Ended              Ended
                                                  May 31           May 31                May 31             May 31
                                                   2002             2002                  2001               2001
                                                ----------       ----------          ------------         ---------
<S>                                             <C>              <C>                 <C>                  <C>
Revenues from services                          $1,021,027       $1,021,027          $          0         $       0
Cost of services                                   820,519          820,519                     0                 0
                                                ----------       ----------          ------------         ---------
Gross profit                                       200,508          200,508                     0                 0

Expenses:
     Selling, general and
         administrative                            244,814          369,725                46,215            72,188
                                                  --------        ---------           -----------         ---------
Loss from operations
                                                   (44,306)        (169,217)              (46,215)          (72,188)
Other income (expense):
     Interest income and other                         775            3,248                 1,476             2,813
     Interest expense                              (39,100)         (66,904)              (10,082)          (16,781)
                                                  --------         --------            ----------         ---------
     Total other income (expense)                  (38,325)         (63,656)               (8,606)          (13,968)
                                                  --------         --------            ----------         ---------
Net loss                                          $(82,631)       $(232,873)           $  (54,821)        $ (86,156)
                                                  ========        =========            ==========         =========
Net loss per share - basic
     and diluted                                  $   (.01)       $    (.03)           $    (.01)         $    (.02)
                                                  ========        =========            ==========          ========
Weighted average number
     of shares outstanding *                     7,821,606        6,657,585             5,599,385         5,569,951
                                                ==========      ===========            ==========        ==========


</TABLE>




*   The weighted average number of shares  outstanding  have been  retroactively
    adjusted for the three-to-one reverse stock split. See Note F.

Effective March 1, 2002, with the acquisition of Employment Solutions, Inc., the
Company  began  to  generate  revenue  and  ceased  to  be a  development  stage
enterprise.  For the period from January 1, 2001 through  February 28, 2002, the
Company  adopted  the  accounting  principles  generally  accepted in the United
States of America that apply to established operating enterprises.

During the four months ended December 31, 2000, the Company reported its results
under the liquidation basis of accounting as found on page 4 of this report.

The Company  changed its accounting  presentation  to the  liquidation  basis of
accounting from the going concern basis of accounting effective January 31, 2000
and  presented  its  financial   information  under  the  liquidation  basis  of
accounting from February 1, 2000 through December 31, 2000.





The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       2
<PAGE>
<TABLE>
<CAPTION>


                                                     RSI Holdings, Inc.
                                 Condensed Consolidated Statements of Cash Flows (Unaudited)
                                            For the Nine Months ended May 31, 2002
                                              and Five Months ended May 31, 2001



                                                                                   For the            For the
                                                                                 Nine Months        Five Months
                                                                                    Ended              Ended
                                                                                    May 31            May 31
                                                                                     2002               2001
                                                                                  -----------       -----------

<S>                                                                                <C>               <C>
Cash (used in) operating activities                                                $ (180,121)       $ (93,911)

Investing activities
     Proceeds from sale of equipment                                                        -              500
     Purchase of property and equipment                                               (32,451)               -
     Net cash paid for acquired business                                           (1,168,192)               -
     Other                                                                             (1,208)               -
                                                                                    ---------        ---------
         Net cash (used in) provided
              by investing activities                                              (1,201,851)             500
                                                                                   ----------        ---------
Financing activities
     Proceeds from long-term notes payable                                          1,260,000                -
     Payment of long-term debt                                                        (34,571)               -
                                                                                    ---------        ---------
         Net cash provided by financing
              activities                                                            1,225,429                -
                                                                                    ---------        ---------
              Net (decrease) in cash                                                 (156,543)         (93,411)

Cash, beginning of period                                                             314,592          210,358
                                                                                    ---------        ---------
Cash, end of period                                                                  $158,049        $ 116,947
                                                                                    =========        =========



</TABLE>


















The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>


                                                         RSI Holdings, Inc.
                    Condensed Consolidated Statements of Changes in Net Assets in Liquidation (Unaudited)
                                     For the One and Four Months ended December 31, 2000






                                                                                     For the                 For the
                                                                                    One Month              Four Months
                                                                                      Ended                   Ended
                                                                                   December 31             December 31
                                                                                       2000                     2000
                                                                                   -----------             -----------

<S>                                                                                  <C>                      <C>
Deficiency in net assets in
     liquidation at beginning of period                                              $(595,253)               $(595,253)

Activity that provided net assets:
         Conversion of debt to common stock                                            250,000                  250,000

Accruals and costs during period of liquidation:
         None                                                                                -                        -
                                                                                     ---------                ---------
Deficiency in net assets in
     liquidation at December 31, 2000                                                $(345,253)               $(345,253)
                                                                                     =========                =========










</TABLE>


















The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       4
<PAGE>


RSI Holdings, Inc.
(A Development Stage Company)
Notes  to  Condensed  Consolidated  Financial  Statements  (Unaudited)

Note A - Summary of significant accounting policies and activities

Nature of business

         On January 18, 2002,  RSI Holdings,  Inc. (the  "Company"),  executed a
letter  of intent  to  acquire  substantially  all of the  assets of  Employment
Solutions, LLC, a South Carolina limited liability company.

         On March 4, 2002,  the  Company  through a  newly-formed,  wholly-owned
subsidiary,   Employment   Solutions,   Inc.,  a  South   Carolina   corporation
("Employment Solutions"), acquired substantially all of the assets of Employment
Solutions, LLC, a South Carolina limited liability company. Employment Solutions
is in the  business of locating  and  providing  temporary  labor  primarily  to
manufacturing  concerns in the  Southeastern  United States.  Most of Employment
Solutions'  employees are foreign  nationals.  Prior to the asset purchase,  the
Company had not conducted any business since January 31, 2000 other than seeking
acquisition opportunities and liquidating the assets of its prior business.

         The Company  completed the liquidation of its prior business during the
eleven months from February 1, 2000 through December 31, 2000. During the period
from  January  1, 2001  through  March 4, 2002,  the  Company  searched  for and
investigated business opportunities.

Basis of Presentation

         The accompanying  unaudited condensed consolidated financial statements
at May 31,  2002  have been  prepared  in  accordance  with  generally  accepted
accounting   principles  for  interim   financial   information   and  with  the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they
do not include all the information and footnotes  required by generally accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management,  all adjustments  including  normal  recurring  accruals  considered
necessary for a fair presentation have been included.  For further  information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-KSB for the year ended August 31, 2001.

         Development stage.

         As of January 1, 2001, the Company had completed the liquidation of its
prior business and adopted the accounting  principles  generally accepted in the
United States of America that apply to established operating enterprises. During
the period from January 1, 2001 through  February 28, 2002, the Company  devoted
substantially  all its efforts to locating and establishing a new business,  but
had no  operating  business  or  revenues.  As a result,  on January 1, 2001 the
Company  began  reporting  under  those  accounting  principles  that  apply  to
development stage enterprises.  Accounting  principles generally accepted in the
United States of America that apply to established  operating enterprises govern
the  recognition  of revenue by a  development  stage  enterprise  and determine
whether a cost  incurred by a development  stage  enterprise is to be charged to
expense when incurred or is to be capitalized or deferred.

         Effective  with the purchase of  Employment  Solutions on March 4, 2002
the Company began operations which generated  revenues.  As a result the Company
ceased to  report  under  those  standards  that  apply to a  development  stage
enterprise.

                                       5
<PAGE>
         Liquidated operations.

         As of January 31, 2000, the Company  adopted the  liquidation  basis of
accounting.

         As a result  of  the  decision  to  cease  all  of  its  prior business
operations, the  Company  changed  its  basis  of  accounting  for its financial
statements as of January 31, 2000 from the going concern  basis of accounting to
the  liquidation basis  of  accounting in accordance with accounting  principles
generally accepted in the United States  of America.  Consequently,  assets were
valued at estimated net  realizable  value and  liabilities  were  presented  at
their  estimated settlement  amounts, including costs associated  with  carrying
out the liquidation. The Company liquidated its prior business operations during
the period beginning February 1, 2000 through December 31, 2000.

Note B - Purchase transaction

         On March 4, 2002 the Company was a public  entity that met the criteria
of a public shell in that it had no  significant  ongoing  operations or revenue
producing  activities.  In consideration of this, a determination was made as to
whether the Company or Employment  Solutions  was the acquirer,  and whether the
business  combination  should  be  treated  as a  reverse  acquisition  or  as a
re-capitalization of the acquired entity.

         The Company effected the business combination with Employment Solutions
solely  through  the  distribution  of cash and by  incurring  liabilities.  The
transaction had no effect on equity or the outstanding  shares of the Company or
Employment Solutions.  For these reasons, the Company is considered the acquirer
in this business  combination.  In accordance with SFAS 141,  intangible  assets
have been  recorded  for the amount of excess of cost over book value of the net
assets acquired.

         The transaction also includes a provision that will be accounted for as
contingency  in the  purchase  transaction  based  on  the  future  earnings  of
Employment Solutions.  The provision provides for the payment of an annual bonus
of up to 20% of  earnings in excess of  $630,000.  The bonus is to be paid to an
executive who has no significant ongoing  responsibilities  and is consideration
for the non-compete component of his employment agreement. The amount to be paid
cannot be determined  beyond a reasonable  doubt and adjustments to the purchase
price will be made annually.

Note C - Calculation of purchase price

         The preliminary  allocation of the cost to acquire Employment Solutions
is described in the table below:

Cash payment to sole stockholder of Employment Solutions         $1,260,000
Note payable to sole stockholder of Employment Solutions            800,000
Cash received in insurance settlement                               (36,657)
                                                                  ---------
         Total cost                                              $2,023,343
                                                                  =========

         The leased  premises of Employment  Solutions were destroyed by fire on
April 2, 2002 and the Company received $36,657 in insurance  proceeds for assets
destroyed in the fire.

                                       6
<PAGE>

Note D - Calculation of intangible asset

         The following table  summarizes the estimated fair values of the assets
acquired  and  liabilities   assumed  at  the  date  of  acquisition   based  on
management's estimates.

Total assets acquired                                               $171,877
Total liabilities assumed                                             77,304
                                                                    --------
         Net assets acquired                                        $ 94,573
                                                                    ========

         Excess of book value over cost of net  assets  acquired  for the merger
was calculated as follow:

Total cost                                                        $2,023,343
Net assets acquired                                                   94,573
                                                                   ---------
Total excess of book value over cost of net assets acquired        1,928,770
Less amortization                                                     67,500
                                                                   ---------
Net intangible asset                                              $1,861,270
                                                                   =========

         In accordance with SFAS No. 142, Goodwill and Other Intangible  Assets,
goodwill is not amortized and is assessed  annually for impairment.  The Company
is in the process of  obtaining  third-party  valuations  of  intangible  assets
relating  to  the  non-compete   agreement.   The  Company  recorded   estimated
amortization  of  $67,500  (subject  to  adjustment  based  on  the  third-party
valuation) relating to the non-compete agreement.

Note E - Long-term debt

         Unsecured note payable to the mother of the President
         and Chief Executive Officer of the Company
         with interest payable quarterly at 8.0 percent per year.
         The unpaid principal balance is due on August 14, 2006.      $  250,000

         Unsecured note payable to the mother of the President
         and Chief Executive Officer of the Company with
         interest payable annually at 7.0 percent per year.
         The unpaid principal balance is due on February 14, 2007.     1,200,000

         Unsecured notes payable to the President
         and Chief Executive Officer of the Company and his
         two adult  siblings in the amount of $20,000 each
         with interest payable annually at 7.0 percent per year.
         The unpaid principal balance is due on February 25, 2007.        60,000

         Note payable to Employment Solutions, LLC in monthly
         installments of $15,466 including interest at 6% per
         year through  March 4, 2007 secured by the outstanding
         common stock of Employment  Solutions, Inc.                     765,429
                                                                      ----------
                                                                       2,275,429
                           Less current portion                          143,575
                                                                      ----------
                                                                      $2,131,854
                                                                      ==========


                                       7
<PAGE>
Note F - Loss per share

         Basic  net  loss  per  common  share is  computed  on the  basis of the
weighted  average  number  of  common  shares  outstanding  in  accordance  with
Statement of  Financial  Standards  (SFAS) No. 128,  "Earnings  per Share".  The
treasury  stock  method is used to compute  the  effect of stock  options on the
weighted  average number of common shares  outstanding  for the diluted  method.
Since the Company incurred a loss, the treasury stock method is anti-dilutive.

         At a special  meeting of the  shareholders  of the Company held on June
10, 2002, a reverse  split of the Company's  outstanding  shares of Common Stock
with a reverse split ratio of three-to-one  was approved.  The weighted  average
number  of  shares  outstanding  and net loss per  share  information  have been
retroactively adjusted to reflect the effects of the reverse stock split.

























                                       8
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

General

         Special Cautionary Notice Regarding Forward-Looking Statements.

         This Report on Form 10-QSB contains  forward-looking  statements within
the meaning of Section 27A of the  Securities  Act and 21E of the Exchange  Act.
Forward-looking  statements  are indicated by such terms as  "expects",  plans",
"anticipates",  and words to similar effect. Such forward-looking statements are
subject to known and unknown risks (including without limitation those described
in "Risk  Factors"  below),  uncertainties  and other factors that may cause the
actual  results,  performance  or  achievements  of the Company to be materially
different from future results,  performance or achievements expressed or implied
by such forward-looking statements.  Important factors ("Cautionary Statements")
that could cause the actual results,  performance or achievements of the Company
to differ  materially  from the  Company's  expectations  are  disclosed in this
Report  on  Form  10-QSB.  All  written  or  oral   forward-looking   statements
attributable  to the Company are  expressly  qualified in their  entirety by the
Cautionary Statements.

Acquisition of business

         On March 4,  2002,  the  Company,  through  Employment  Solutions,  its
newly-formed,  wholly-owned subsidiary, acquired substantially all of the assets
of  Employment  Solutions,  LLC, a South  Carolina  limited  liability  company.
Employment  Solutions  is in the business of locating  and  providing  temporary
labor primarily to  manufacturing  concerns in the  Southeastern  United States.
Most of  Employment  Solutions'  employees are foreign  nationals.  Prior to the
asset  purchase,  the Company had not conducted  any business  since January 31,
2000 other than seeking acquisition  opportunities and liquidating the assets of
its prior business.

Changes in basis of accounting

         As  described  in  Note  A  to  its  unaudited  Condensed  Consolidated
Financial Statements included above, the Company changed its basis of accounting
for its financial statements at January 31, 2000 from the going concern basis of
accounting to the liquidation  basis of accounting in accordance with accounting
principles  generally  accepted in the United  States of America.  The Company's
activities  during  the  eleven  months  beginning  February  1, 2000  consisted
primarily  of  selling  the  assets  and  paying  the  liabilities  of its prior
business.  The  Company  completed  the  liquidation  of its prior  business  by
December 31, 2000.

         On January 1, 2001, the Company changed its basis of accounting for its
financial  statements  from the  liquidation  basis of  accounting  to the going
concern  basis of  accounting  in accordance  with  accounting  principles  with
generally  accepted in the United States of America.  The  Company's  activities
since  January 1, 2001 through  February  28, 2002  consisted of looking for and
investigating business opportunities.

         The Company's financial statements as of and for the eight months ended
August  31,  2001 and the three and six  months  ended  February  28,  2002 were
prepared in accordance with disclosure  requirements applicable to a development
stage entity because the Company had no revenues  during the period from January
1, 2001 through February 28, 2002.

                                       9
<PAGE>

Results of operations

         The Company had no revenues  during fiscal 2002 except those  generated
beginning on March 4, 2002 by Employment  Solutions.  Employment  Solutions is a
provider of temporary  manual  labor.  Its  customers  are primarily in the meat
packing,  lumber and other  industrial  businesses.  It operates  from an office
facility  in  Greenwood,  SC.  During the three  months  ended May 31,  2002 the
Company's revenues were $1,021,027.

         The cost of services of $820,519 was incurred by  Employment  Solutions
during the three  months  ended May 31,  2002.  These costs  include  wages paid
directly to the employees,  payroll taxes,  workers  compensation  insurance and
other costs directly associated with employment of the workers.

         General and  administrative  expenses were $244,814 and $369,725 during
the three and nine months  ended May 31, 2002 as compared to $46,215 and $72,188
during the three and five months ended May 31, 2001. The expenses,  exclusive of
Employment Solutions, during the nine months ended May 31, 2002 include salaries
and related  costs of  $148,419;  legal,  accounting,  and  shareholder  related
expenses  of  $44,227;  rent of $20,250  and other  administrative  expenses  of
$27,386.  The  expenses  during the nine months  ended May 31, 2002 also include
selling and administrative  expenses incurred by Employment Solutions during the
three months ended May 31, 2002 of $61,943 and the estimated  amortization  of a
covenant not to compete of $67,500.

         Interest  expense  incurred  during the three and nine months ended May
31,  2002 was  $39,100  and  $66,904,  respectively  as  compared to $10,082 and
$16,781  during the three and five months  ended May 31,  2001.  The increase in
interest expense relates primarily to interest  incurred on borrowings  relating
to the acquisition of Employment Solutions.  Interest income and other income in
the amount of $3,248 was primarily from earnings on cash investments  during the
nine months ended May 31, 2002.

Liquidation stage operations

         The Company's activities during the eleven months beginning February 1,
2000  through  December 31, 2000  consisted  primarily of selling the assets and
paying the  liabilities of its prior  business.  The accruals and costs incurred
during this liquidation  period were recorded during the period ended August 31,
2000.

Liquidity and Capital Resources

         Anticipated Liquidity Requirements

         Certain of the Company's  shareholders have advanced funds as discussed
under "Debt Arrangements".  At May 31, 2002, the Company's  liabilities exceeded
its assets by $228,792.

         The  Company  anticipates  that its cash balances and cash generated by
the  operations  of  Employment  Solutions  will be  sufficient to fund its cash
requirements during the next twelve months.

         Employment Solutions collects from its customers and pays its employees
each  week for  work  performed  during  the  previous  week.  Typically  at the
beginning of each week Employment Solutions invoices its customers for the hours
worked during the previous week and the customers typically pay during that same
week.  Employment  Solutions  also pays its  employees  each Friday for the same
hours as invoiced to the customers during that week. Although the customers have
paid for services  provided as described  above during the period since March 4,
2002,  the Company is dependent  upon a few  customers and can give no assurance
that these customers will continue to pay in a timely manner.

                                       10
<PAGE>

         Cash and Cash Equivalents

         The Company had cash and cash  equivalents in the amount of $158,049 as
of May 31, 2002.

         Debt Arrangements

         On August 31,  2001,  Minor H.  Mickel,  the mother of Buck A.  Mickel,
President and Chief Executive Officer of the Company loaned the Company $250,000
under the terms of an  unsecured  note payable  bearing  interest at 8% per year
with the principal balance due on August 14, 2006.

         On February 14,  2002,  Minor H. Mickel  loaned the Company  $1,200,000
under the terms of an  unsecured  note payable  bearing  interest at 7% per year
with the principal  balance due on February 14, 2007. On February 25, 2002, Buck
A. Mickel and his two adult  siblings each loaned the Company  $20,000 under the
terms of  unsecured  notes  payable  bearing  interest  at 7% per year  with the
principal  balance due on February  25,  2007.  Total  proceeds of these  loans,
aggregating $1,260,000, were used in the purchase of Employment Solutions.

         On March 4, 2002,  the  Company  through its  wholly-owned  subsidiary,
Employment Solutions,  incurred long-term debt in the amount of $800,000 payable
in equal  monthly  installments  of $15,466 over five year at an interest at the
rate of 6% per year.  The note is secured by the Company's  pledge of the common
stock of Employment Solutions.

Debt converted into common stock

         On December  20, 2000,  Minor H. Mickel the Company  loaned the Company
$500,000  under terms of an 8%  convertible  note  payable on December 20, 2005.
Under the terms of this note all  principal and interest is  convertible  at the
conversion rate of $.075 per share at the option of either the Company or holder
of the convertible note. Effective January 21, 2002, the entire principal amount
of $500,000 was converted into 6,666,666 shares of the Company's common stock.

Risk Factors

         The Company is dependent on a few  customers in that a majority  of its
revenues are from three customers.  The Company can give no assurance that these
customers will continue to need the services that it provides.

         The Company is continually  subject to the risk of new regulations that
could materially impact its business.  A number of bills have been introduced in
Congress  which,  if enacted,  would impose  conditions  which could  materially
adversely  affect its  business.  An example is a proposed  bill that would,  if
enacted,  require  its  workers  to  receive  the same pay and  benefits  as its
customers' regular employees.

         The Company is dependent upon the availability of the foreign nationals
that it employs.  It must continually attract reliable workers to fill positions
and may from time to time experience  shortages of available  temporary workers.
The Company can give no assurance  that its supply of labor will  continue to be
available.

         The Company is dependent upon the availability of workers  compensation
insurance.  It cannot be certain that such insurance will always be available or
will be available at an affordable price.



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<PAGE>

PART II.       Other information

ITEM 1.        LEGAL PROCEEDINGS*

ITEM 2.        CHANGES IN SECURITIES*

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES*

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

ITEM 5.        OTHER INFORMATION

               On  June  10,  2002,  the  Company  approved  amendments  to  the
               Company's  Articles of  Incorporation  to effect a  three-for-one
               reverse  split  of  the  issued  and  outstanding  shares  of the
               Company's  common stock.  As a result of the reverse stock split,
               every three shares of the  Company's  common stock was  converted
               into one share of common  stock on June 11, 2002.  The  Company's
               post-split  common  stock began  trading on the  Over-the-Counter
               Bulletin  Board on June 13,  2002  under the symbol  RSII.  A new
               CUSIP number was issued for the Company's post-split common stock
               (749723201).

               All stockholders holding physical stock certificates are required
               to  surrender  their old stock  certificates  in exchange for new
               stock  certificates.  In  this  regard,  stockholders  have  been
               notified by the Company's transfer agent, American Stock Transfer
               & Trust Company,  regarding the process for  exchanging  existing
               stock certificates representing pre-split shares.

*Items  1, 2, 3,  and 4 are not  presented  as they  are not  applicable  or the
information  required  thereunder  is  substantially  the  same  as  information
previously reported.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)    Listing of Exhibits

                  None

         (b) Reports on Form 8-K

                  On March 18, 2002,  the Company filed a Current Report on Form
                  8-K, dated March 4, 2002,  with respect to the  acquisition of
                  assets of Employment Solutions, LLC.

                  On May 20, 2002,  the Company  filed a Current  Report on Form
                  8-K,  Amendment  No. 1 that  includes  the  audited  financial
                  statements  of  the  Employment  Solutions,  LLC  as  well  as
                  unaudited pro forma condensed  combined  financial  statements
                  that give effect to the acquisition.




                                       12
<PAGE>


                                   SIGNATURES








In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                             RSI HOLDINGS, INC.
                                         --------------------------



 July 12, 2002                               /s/ Joe F. Ogburn
-----------------                        ------------------------------
     (Date)                               Joe F. Ogburn,
                                          Treasurer and Chief Financial Officer
                                          (Principal Accounting Officer)
















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