SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

(Mark One)

[X]     Annual Report under Section 13 or 15(d) of the Securities Exchange Act
        of 1934 for the fiscal year ended December 31, 2003

[ ]     Transition Report under Section 13 or 15(d) of the Securities Exchange
        Act of 1934 for the transition period from               to

Commission file number:  0-24798

              XYNERGY CORPORATION [formerly known as Raquel, Inc].
                 (Name of small business issuer in its charter)

        Nevada                                           93-1123005
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

269 S. Beverly Drive, Suite 938
Beverly Hills, CA                                              90212
(Address of principal executive offices)                      (Zip Code)

Issuer's telephone number: (310) 274-0086

Securities to be registered pursuant to Section 12(b) of the Act: None

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

Common Stock, $.001 Par Value
(Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act 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 X
No

Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is 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. [___] The issuer's revenues for the fiscal year
ended December 31, 2003 were $144. The aggregate market value of the voting
stock held by non-affiliates of the registrant is $708,074. The number of shares
of the registrant's Common Stock, $.001 par value, outstanding as of December
31, 2003 was 31,160,697.

Documents incorporated by reference: None. Transitional Small Business Issuer
Format (check one): Yes ___ No X PART I


Item 1.  Description of Business.

Business Development.

Xynergy Corporation [formerly known as "Raquel, Inc."] was organized under the
laws of the State of Nevada on August 6, 1993. [Unless the context indicates
otherwise, the term "Company," "XYNY" or "Xynergy" refers to Xynergy
Corporation]. Xynergy Corporation started as "Colecciones de Raquel, Inc." with
its IPO in 1994. In 1998, Colecciones de Raquel became "Raquel, Inc." In
February, 2002, after its acquisitions of Think Blots greeting cards, Raquel,
Inc. became Xynergy Corporation.

Historical Development. Raquel Zepeda, CEO and founder of Xynergy, started the
Company as "Colecciones de Raquel of Beverly Hills," a full line of cosmetics,
skin care and fragrance. The line was specifically designed for the needs of
olive skinned women, targeting the Hispanic/Latin market.

Ms. Zepeda's inspiration was born from her experience in an attempt to sell
another brand of cosmetics: they were unsuitable for olive and sallow skin
tones. That experience, coupled with her background in modeling, inspired her to
create a cosmetics line for Latina women. In 1983, she introduced Morena
Cosmetics in the San Francisco/Bay Area. Ms. Zepeda had quite an impact in that
area, Raquel needed more capital to continue. While marketing Morena Cosmetics
on a small scale, Raquel dedicated the next 5 years of her life to further
research and development. Raquel developed even more unique and effective color
formulations, along with guidelines for the golden-skinned woman. Of this,
Colecciones de Raquel was created.

In 1989, Raquel founded Colecciones de Raquel, now Raquel of Beverly Hills,
creating a complete line of cosmetics for the Latin/Hispanic woman consisting of
color, skin care and fragrance. The color collection was meticulously designed
to enhance olive skin tones. Raquel personally formulated the foundations colors
which range from very fair tones to deep bronze tones. Her original fragrance,
"Sabor A Mi, Melody of Eternal Passion," contains pheromones and several natural
aphrodisiacs; Raquel calls this potion "the Fragrance of Amor." Raquel's most
recent creation is her music Compact Disc, containing five romantic love songs.
The CD is a give-away with purchase of the fragrance and sold separately at
www.cdbaby.com/cd/raquel. Angela Poscillico, a music critic for Latin American'
Rhythm Magazine, commented about Raquel's CD, "Sabor A Mi is performed with much
passion, which really portrays this artist's love for music...portrays her
unique style and smooth vocal ability."

Raquel is recognized as "a pioneer in the Latina makeup industry," according to
Latinolink. Raquel has been recognized by publications such as. Latina Magazine,
Tu Mundo, Negocios & Finanzas, Beauty Fashion, the Wall Street Corporate
Reporter, Stock Broker Magazine, Hispanic Business, Nuestro Tiempo, and was
accepted into Strathmore's Who's Who 2000.

Public Offering. As part of an initial public offering in August 1994, the
Company issued 1,000,000 Units of securities for an aggregate offering price of
$100,000. The Company realized net proceeds of $91,090 from the sale of the
Units. Each Unit consisted of one share of common stock and one A Warrant. Each
A Warrant entitled was exercisable at an exercise price of $.25 per A Warrant
for one share of common stock and two B Warrants. Each B Warrant was exercisable
at an exercise price of $.50 per B Warrant for one share of common stock and one
C Warrant. Each C Warrant was to be exercisable at $1.00 per C Warrant for one
share of common stock.

The Company utilized substantially all of the net proceeds from the public
offering during the year ended December 31, 1994. In 1995, the Company received
proceeds from the A and B warrants totaling $1,250,000. As a result, the Company
was able to expand its operations. The C Warrants have been canceled.

With proceeds of the Company's public offering it has produced its proprietary
fragrance, "Sabor A Mi," a complete line of colors cosmetics and skin care and
opened two boutiques in Beverly Hills and Los Angeles. Additionally, the Company
produced a music compact disc which it plans to cross-market with the sale of
the fragrance. "Sabor A Mi" is also the name of a very popular Spanish love
song. Initially, the compact disc contained information on the Company's line of
cosmetics along with a sample fragrance strip and product ordering information.
From 1995 through 2000 the Company operated two retail boutiques. However, the
sales from these operations were not enough to maintain their operations and
eventually closed both boutiques.

Recent Operations. After further market research, the Company's management
changed its distribution tactics to employ direct and network marketing. A sales
and distribution plan has been designed for this particular style of marketing.
The Company has now obtained interim financing and is preparing a convertible
debt finance offering. (See Management's Plan of Operation.)

During the year 2001, the Company expanded its strategy and mission to acquire
companies whose revenues or innovative value would amplify the Company's overall
worth. Several acquisition candidates have been considered in the last two
years.

On September 5, 2001, Xynergy acquired "Think Blots," a greeting card line. The
line is distinctive in that it combines original ink blot art work with humorous
dialogue, and will be available for viewing on the internet at
dementeddiagnosis.com within the next quarter 2004.

On November 5, 2001, the Company filed a lawsuit against Rainmaker Development
Corporation ("Rainmaker") and Mattel, Inc. ("Mattel") for copyright and
trademark infringement. The Complaint was for the use of the trademark, "Think
Blot," for a game produced by Rainmaker which uses the same name and concept as
the Company's greeting card line, "Think Blots" which were created in 1987.
Rainmaker's date of first use is 1997, ten years after Think Blots' registered
copyright. Previously, March 2001, Rainmaker Corporation filed an Opposition to
Raquel Zepeda's original Application for Trademark Registration for the Think
Blots greeting card line. The proceeding was suspended due to the Company's
lawsuit against Rainmaker and Mattel, Inc. Rainmaker Corporation filed a Motion
for Summary Judgment for the lawsuit in Federal District Court. In April, 2002.
their Motion was granted. Due to Xynergy's limited financial resources, an
appeal was not filed. Nonetheless, the Company will continue to assert its
rights to market the greeting card line under the provisions and protection of
copyright laws.

In March, 2002 the Company changed its name to Xynergy Corporation and affected
a 100 to 1 reverse stock-split. A 14C211 was filed to execute these changes. As
Xynergy Corporation, the Company expanded its business strategy to acquire other
companies for asset enhancement.

On April 22, 2002, by a unanimous vote of the Board of Directors, Xynergy
elected to incorporate Raquel of Beverly Hills in the State of Nevada as a
wholly owned subsidiary. Additionally, Xynergy voted to issue ten million shares
to Raquel of Beverly Hills in exchange for all 10 million shares of Raquel of
Beverly Hills.

In September, 2002 Xynergy filed an S-8 Registration Statement to issue
6,000,000 shares for payment of services to consultants and employees. In
October, 2002, 4,281,154 shares were issued to pay for independent consultants'
services.

Tom Lupo was assigned to Xynergy's Board of Directors in November, 2002. Mr. has
an extensive background in network marketing and specializes in ethnic
marketing. (See Item 9.)

During the period of September 2003 through February, 2004, Xynergy negotiated
the acquisition of Intervest Group, Ltd. After months of negotiations, Intervest
Group, Ltd. breached their agreement with Xynergy Corporation in February, 2004.

In February 2004, the Company engaged consultants Alexander and Wade for
assistance in expansion of operations in exchange for 1,000,000 S-8 shares.
However, the contract was subsequently canceled and the stock is to be returned
to the Company. In the interim, Xynergy has obtained interim financing secured
by the Company stock. Additionally, the Company is preparing a convertible debt
offering for raising capital to promote Raquel of Beverly Hills cosmetics.

Edward A. Rose, Jr. was appointed as Chief Financial Officer, Director and
Corporate Secretary in March of 2004. Mr. Rose has worked for the Company in the
past in the same positions and most recently, worked with Xynergy as Due
Diligence Consultant. He has a formidable background in legal, finance, and
accounting matters.

On March 26, 2004, Xynergy commenced trading on the Berlin Stock Exchange under
the Symbol. This event is expected to expand Xynergy's exposure for European
investors and enhance in the Company's plans for expansion. (See Management's
Discussion, Item 6.)

Business of the Issuer.

        PRINCIPAL PRODUCTS.

Raquel of Beverly Hills

The Company markets premium cosmetics (color), skin care, under the trademark,
"Raquel of Beverly Hills," and the fragrances "Sabor A Mi, Melody of Eternal
Passion" and "-Peligro!".

Raquel of Beverly Hills cosmetics are unique in that they are designed for a
niche market: golden-skinned consumers, which include Hispanics, Asians, and
Mediterraneans; specifically targeting the Hispanic/Latin market. The Company's
cosmetic line is intended to appeal to these markets by complementing their
"golden" skin tones.

The fragrance was named after a world-famous Latin love song, "Sabor A Mi". The
Company has also produced a music CD containing five (5) songs sung by Ms.
Zepeda, including "Sabor A Mi". Additionally, the CD contains a fragrance strip
of "Sabor A Mi, Melody of Eternal Passion", an ad for the complete line of
products, along with purchasing information. The CD is a giveaway with purchase
of the fragrance and will also be available for purchase in select music stores.


Think Blots  Greeting Card Line

Xynergy markets a greeting card line by the tradename "Think Blots." Combining
original ink blot art work with humorous and flirtatious dialogue, they offer an
introspective avenue of communication. The line was originally developed in 1987
by Ms. Zepeda and is protected by a registered copyright. The line will be
available for viewing at dementeddiagnosis.com.

In addition, Xynergy will be introducing Demented Diagnosis, a "mental test" as
an advertising campaign. Through the Demented Diagnosis ads, people will
acquaint themselves with the cards. Eventually, these ads will be placed
alongside horoscopes and cross-word puzzles.

Principal Markets and Marketing Strategy.

Raquel of Beverly Hills

The Company's principal market is fastest growing ethnic group in the United
States; the Hispanic/Latin consumer group . It is estimated that Latina women
spend twice as much as anglos on cosmetics, a double-digit billion-dollar,
growing industry. Raquel of Beverly hills further anticipates a market share of
non-Hispanic, golden-skinned consumers such as Asians, Mediterraneans and some
Europeans.

U.S. Hispanic consumers are 20.6 million strong, with a spending power of $581
billion which is expected to double to $880 billion by the year 2010. The U.S.
Hispanic cosmetics is estimated to be 1.6 billion some years ago, and the Latin
American market is estimated to be over $5.9 billion, totaling $7.5 billion.

Raquel of Beverly Hills now plans to increase sales through direct marketing via
infomercials, coupled with direct sales representatives. This approach will
entail infomercials for both selling directly and recruiting salespeople for
expansion directly and aggressively through network/multi-level marketing.
According to the Direct Selling Association, in 2002 U.S. Retail Sales were
equivalent to $28.69 billion. Personal care represented 28.2% or $8.09 billion
dollars.

During the near term, the Company intends to concentrate on marketing its
products in areas containing large and growing number of Hispanics such as
California, Texas, Florida, and New York. (See Item 6. Management's Discussion
and Analysis or Plan of Operation.)

Think Blots  Greeting Card Line

Think Blots greeting card line's principal market will commence in the Los
Angeles area and electronically via the internet. Eventually the line will be
marketed nationally and internationally.

Today, the industry generates more than $7.5 billion in retail sales from
consumer purchases of more than 7 billion cards. Greeting card retail growth
recently has been driven primarily by sales of cards for everyday-general and
friendship situations versus seasons (holidays) and by individual cards rather
than from packaged or boxed cards. Women purchase approximately 80% of all
greeting cards. These facts are attributed to the projected need for more
emotion-based me-to-you messages in the form of greeting cards. As such, we now
have cards for every relationship, every occasion, every ethnicity, every age
group, every gender and every special interest group. Additionally, greeting
cards are being sold in more outlets than ever before, as well as being
purchased and sent over the Internet.

To introduce consumers as to how Think Blots concept works, Demented Diagnosis,
a "cartoonish" mental test was developed. Demented Diagnosis, a "mental test"
using different Think Blots with multiple choice answers. These answers then
provide a humorous conclusion as to the individual's personality. Through our
Demented Diagnosis ads, people will acquaint themselves with unique concept of
self-discovery from ink blot art. Eventually, these ads will be placed alongside
horoscopes and cross-word puzzles.

        Distribution.

Raquel of Beverly Hills

Xynergy has developed a new strategy for distribution of Raquel of Beverly Hills
products. Direct sales through television infomercials and network/multi-level
marketing. Multi-level marketing has several advantages: it is very popular in
the Hispanic/Latina market, advertising costs are minimal, and all product sales
are either pre-paid or C.O.D.

Think Blots  Greeting Card Line

Think Blots greeting card line is currently available on the internet.
Additionally, it will be available in stores and has obtained the interest of a
Los Angeles distributor.

Additionally, the Company is seeking syndication of Demented Diagnosis in weekly
newspapers. (See www.dementeddiagnosis.com.) Xynergy believes obtaining
syndication of these "tests" would prove to be an excellent marketing and
advertising tool for the greeting card line.

        Competition.

Raquel of Beverly Hills
There are numerous other companies that produce and sell cosmetics. Many of
these companies are significantly larger, better financed and more established
than Raquel of Beverly Hills. Competitors include Revlon, Estee Lauder,
Maybelline, Mary Kay and Avon. These companies have established customers and
are continually seeking to obtain additional customers.

Although Raquel of Beverly Hills' competitors are in a better position to
effectively market their products, the Company plans to use its focus in the
Hispanic market as an edge to "carve" out a portion of market share into this
industry.

Think Blots  Greeting Card Line

Estimates indicate that there are nearly 2,000 greeting card publishers in the
U.S. today, ranging from major corporations to small family-run organizations.
As indicated above, Think Blots faces substantial competition. However, the
Company believes that Think Blots' unique style will give the line a competitive
edge.

        Raw Materials.

Xynergy's products are produced by independent third parties who also obtain the
materials used to produce these products. Xynergy believes that these materials
are available from various sources at competitive prices. Although Xynergy has
not entered into any agreement with any companies, Xynergy has been informed
that suppliers will be able to fulfill Xynergy's expected limited need for
products on a timely basis. Xynergy anticipates that it will be required to
prepay a portion of the price for the products purchased from suppliers upon
placing an order and the balance payable upon delivery of the products.
Accordingly, Xynergy does not expect to receive credit terms from suppliers.
Xynergy also anticipates that, in the future, it may be able to obtain thirty
day credit terms from suppliers if the level of its purchases increase. No
discussions have been held regarding any such credit terms and there is no
assurance that Xynergy will be able to purchase products without paying for them
in advance. Xynergy has not experienced any difficulties in obtaining required
products from producers. However, Xynergy's experience in obtaining products may
not be indicative of its ability to obtain products in the future due to its
minimal operations to date.

Xynergy has not entered into any contracts for either the materials used in
producing its products or the production of these products. Accordingly, there
can be no assurance that Xynergy will be able to obtain products in quantities,
at prices, and at required times to meet its needs. These needs include
fulfilling future sales commitments.

Xynergy does not plan to carry significant amounts of either materials or
finished products in its inventory. Therefore, it will be relying on third
parties to supply it with products on a continuing basis.

        Patents and Trademarks.

Xynergy has obtained the trademarks for the following: "-Peligro!", its
fragrance for men, "Sabor A Mi, Melody of Eternal Passion," "Chic'a Beverly
Hills," a cosmetics line for teens and Raquel of Beverly Hills logo.
Additionally, copyrights are held for the following: Color Me Golden, a beauty
guide for golden skin tones; Sound Recording for "Sabor A Mi," along with the
music Compact Disc, Raquel of Beverly Hills' logo, Raquel of Beverly Hills'
product brochure, Think Blots greeting cards, and Demented Diagnosis.

The formulas for the fragrances "Sabor A Mi," and "-Peligro!" were developed by
Ms. Zepeda for Raquel of Beverly Hills and are the proprietary formulas of
Xynergy.

        Government Regulation.

Xynergy does not believe that its products are subject to government
regulations, including those imposed by the United States Food and Drug
Administration. However, Xynergy has not requested nor has it received any
notification that its products are not subject to such regulations. If Xynergy's
products are subject to any government regulation, noncompliance with such
regulations, either presently in effect or subsequently enacted, might adversely
effect its ability to market its product.

        Employees.

As of December 31, 2003, Xynergy employed one (1) persons full time. Xynergy may
hire additional part-time secretarial and retail sales employees depending on
its level of operations.

Raquel Zepeda, is President and CEO. Along with her experience in banking (6
yrs), legal (8 yrs.), has worked in the cosmetics industry for over ten years.
Ms. Zepeda has been the driving force of this venture. Ms. Zepeda used her
inventive abilities to create Raquel of Beverly Hills' original fragrances and
design all of Raquel of Beverly Hills' product lines. Additionally, Ms. Zepeda
created the greeting card line, "Think Blots."

Edward A. Rose, Jr., CPA, Esq., as of March, 2004 is Chief Financial Officer and
we previously acting as the Xynergy's due diligence advisor. Mr. Rose has worked
with Xynergy in several capacities since January, 2000. Mr. Rose has held
positions as Internal Auditor, Controller, and Contracts Administrator for
several Fortune 500 companies, conducting field due diligence reviews of
multimillion dollar operating companies in the U.S. South America, and Europe
for corporate acquisitions. He is now a Certified Public Accountant and attorney
licensed to practice both in New York and California.

Xynergy may engage consultants to assist it in various aspects of its business.
See "Item 9. Directors, Executive Officers, Promoters and Control Persons".

Item 2.  Description of Property.

Xynergy maintains its office address at 269 So Beverly Drive, Suite 938, Beverly
Hills, California.

Item 3.  Legal Proceedings.

In March 2001, Rainmaker Corporation filed and Opposition to Xynergy's
Application for trademark for the Think Blots greeting card line. The proceeding
was suspended due Xynergy's lawsuit against Rainmaker and Mattel, Inc. (See
paragraph below.)

The Company filed a lawsuit on November 5, 2001 against Rainmaker Development
Corporation ("Rainmaker") and Mattel, Inc. ("Mattel") for copyright and
trademark infringement. The Complaint was filed in the United States District
Court, Southern District of California, Case No. 01CV2027W (LAB). The Complaint
was for the use of the trademark, "Think Blot," for a game produced by Rainmaker
which uses the same name and concept as the Company's greeting card line, "Think
Blots" which were created in 1987. Rainmaker's date of first use is 1997, ten
years after Think Blots' registered copyright. Rainmaker Corporation filed a
Motion for Summary Judgment. In April, 2002. their Motion was granted. Due to
the Company's limited financial resources, no appeal was filed.

Other than these items, there are no material pending legal proceedings to which
Xynergy or the property of Xynergy are subject. In addition, no proceedings are
known to be contemplated by a governmental authority against Xynergy or any
officer or director of Xynergy.

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

        Not applicable

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

 Xynergy's common stock may be traded in the over-the-counter market which are
posted by the OTC "Electronic Bulletin Board", which reports quotations by
brokers or dealers in particular securities. Because of the lack of readily
available quotations and the limited trading volume frequently associated with
these securities, there is a greater risk of market volatility of such
securities than for securities traded on national exchanges. Trading in
Xynergy's stock is reported under the symbol XYNY (formerly RAQL).

The following table sets forth the quarterly high and low bid prices of the
common stock for the last 3 years.

<TABLE>
<CAPTION>


Year Ended December 31,2001                     Closing Bid                     Closing Ask

                                                        High            Low             High    Low

<S>                                                     <C>             <C>             <C>     <C>
        First Quarter                                   .125            .03             .25     .04
        Second Quarter                                  .21             .025            .39     .025
        Third Quarter                                   .21             .031            .29     .06
        Forth Quarter                                   .062            .021            .075    .025


Year Ended December 31,2002

                                                        Open            High            Low     Close

        First Quarter                                   .117            .31             .01     2.00
        Second Quarter                                 .214            .53             .04     .30
        Third Quarter                                   .046            .16             .01     .03
        Forth Quarter                                   .01             .01             .01     .01

Year Ended December 31,2003

                                                        Open            High            Low     Close

        First Quarter                                   .02             .035            .003    .02
        Second Quarter                                  .01             .019            .006    .01
        Third Quarter                                   .01             .025            .005    .01
        Forth Quarter                                   .07             .145            .01     .07

</TABLE>

These quotations represent inter-dealer quotations without adjustment for retail
markups, markdowns or commissions and do not necessarily represent actual
transactions.

As of December 31, 2003, there were 1,017 record holders of Xynergy's common
stock.

Common Stock. As of January 25, 2002, authorized capital stock of Xynergy is
250,000,000 shares of common stock which has a par value of $.001 per share. The
holders of common stock (a) have equal rateable rights to dividends from funds
legally available therefor, when and if declared by the Board of Directors of
Xynergy; (b) are entitled to share rateably in all of the assets of Xynergy
available for distribution to holders of common stock upon liquidation,
dissolution or winding up of the affairs of Xynergy; (c) does not have
preemptive, subscription or conversion rights and there are no redemption or
sinking fund provisions applicable thereto; and (d) are entitled to one
noncumulative vote per share on all matters on which shareholders may vote at
all meetings.

Preferred Stock. The authorized capital stock of Xynergy also includes
50,000,000 shares of preferred stock, par value $.001 per share. The Board of
Directors of Xynergy has the right to determine the characteristics of any
preferred stock. Such characteristics include voting rights, dividend
requirements, redemption provisions and/or liquidation preferences. In October,
2003 the Company filed a Certificate of Designation of Class A Convertible
Preferred Stock. Maximum number of shares in Series A stock is 10,000,000 shares
with a twenty to one conversion rate and twenty cumulative votes per share.

In May, 2001, the Company issued 4,000,000 shares to individuals for purchase of
stock options. In August, 2001, and December, 2001 the Company issued stock for
exercise of options of 1,000,000 shares, and 500,000 shares, respectively;
500,000 of which were subsequently canceled in December, 2003.

On December 31, 2003 two million (2,000,000) shares of Common Stock issued to
Raquel Zepeda from the exercise of options through the Think Blots acquisition
were canceled. With an exercise price of $.10, Ms. Zepeda had signed a
Promissory Note to the Company for payment. The Note and stock were canceled,
however the options remain in effect.

As of December 31, 2003, there were 31,160,697 shares of common stock
outstanding, with each share entitled to one vote. As the holder of 3,999,200
Common shares, 1,000,000 Preferred shares, and control person for 13,000,000
shares, (an aggregate of 16,999,200 Common shares and 1,000,000 Preferred shares
with twenty to one votes [20,000,000 votes]) Ms. Zepeda will continue to be able
to elect all of Xynergy's directors and continue to control Xynergy. See "Item
11. Security Ownership of Certain Beneficial Owner and Management".

Xynergy has not paid any cash dividends since its inception and does not
contemplate paying dividends in the foreseeable future. It is anticipated that
earnings, if any, will be retained for the operation of Xynergy's business.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

The Private Securities Litigation Reform Act of 1995 provides a "safe-harbor"
for forward-looking statements. Certain statements contained in this report that
are not historical fact, including, but not limited to, those concerning its
expectations of future sales revenues, gross profits, research and development,
sales and marketing, and administrative expenses, product introductions and cash
requirements are forward-looking statements. These forward-looking statements
are subject to risks and uncertainties that may cause its actual results to
differ from expectations including variations in the level of orders, general
economic conditions in the markets served by its customers, international
economic and political climates, timing of future product releases, difficulties
or delays in product functionality of performance, its failure to respond
adequately to changes in technology or customer preferences, changes in its
pricing or that of its competitors and its inability to manage growth. All of
the above factors constitute significant risks to its operations. There can be
no assurance that the Company's results of operations will not be adversely
affected by one or more of these factors. As a result, its actual results may
vary materially from its expectations. The words "believe", "expect",
"anticipate", "intend", and "plan" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements which speak only as of the date the statement
was made.

Plan of Operation

In 2004, Xynergy has positioned itself to raise capital for its subsidiaries to
execute and implement sales and distribution plans. On March 26, 2004 Xynergy
was listed on the Berlin Stock Exchange under the symbol UYW, German Cusip
Number US9841531067. This new listing on the Berlin Stock Exchange is expected
to improve Xynergy's exposure for European investors and to improve the trading
liquidity of Xynergy shares for all of its shareholders. No new shares have been
issued as part of this listing and the improved visibility for Xynergy and
improved liquidity for Xynergy shareholders could produce an improvement in
shareholder value as the Company continues its growth in 2004.

Xynergy has recently partnered with an investment banker who is able to provide
interim financing prior to executing an offering for convertible debt. The
offering is expected to occur within the next six months. Monies from this
offering would be to finance the expansion of product lines offered by its
subsidiaries:

        Raquel of Beverly Hills will be producing an infomercial for the
Spanish-speaking media to re-launch its line of cosmetics, skin care and
fragrance. Additionally, the infomercials will act as a recruiting tool for
those who would like to sell its products directly through catalogues. In 2003,
the U.S. infomercial market was a whopping $154.1 billion. Production details
and contracts for the infomercial are in the negotiation stages as of April
2004.

Additionally, to compound the direct sales approach, a competitive compensation
package has been fashioned for promoting both product sales and recruiting
salespeople for expansion directly and aggressively through network/multi-level
marketing.

According to the Direct Selling Association, in 2002 U.S. Retail Sales were
equivalent to $28.69 billion. Personal care represented 28.2% or $8.09 billion
dollars.. Raquel of Beverly Hills now plans to increase sales through direct
marketing via infomercials, coupled with direct sales representatives. This
approach will entail infomercials for both selling directly and recruiting
Leaders in this industry such as Avon and Jafra reported earnings of $1.343
billion and $76.6 million, respectively for the third quarter of 2000.

U.S. Hispanic consumers are 35 million strong, with a spending power of $581
billion which is expected to double to $880 billion by the year 2010.

During the near term, the Company intends to concentrate on marketing its
products in markets such as California, Texas, Florida, and New York that have a
prominence in the Hispanic market. Eventually, the Company plans to enter the
international markets.

Material Changes in Financial Condition
Although Cash and cash equivalents were minimal $553 at December 31, 2003, the
Company has managed to secure interim financing. Additionally the Company is in
the process of securing additional convertible debt monies for execution
Xynergy's marketing plan for its products. The proposed financing is expected to
be sufficient to cover Xynergy's operating expenses through the calendar year
2004.

Material Changes in Results of Operations

All expenses for Xynergy have decreased substantially. Xynergy has been
operating in a "hibernative" state. No monies have been spent toward office
rent, or salaries, greatly minimizing selling, general and administrative
expenses.

Management believes that by implementing its current Plan of Operation of
raising working capital and executing its marketing strategies, future revenues
and share value will increase.



<PAGE>


Item 7.  Financial Statements*.


XYNERGY CORPORATION
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS



*Xynergy's yearly audit has not yet been completed. It is estimated that the
audit will be completed within the next ten days at which time the financial
statements will be incorporated in an Amended Form 10KSB. Item 8.Changes In and
Disagreements with Accountants on Accounting and Financial Disclosures.


In February, 2004, Xynergy Corporation signed an engagement letter with Weinberg
& Co., P.A.CPA. This change was reported in the Company's 8-K filing of March,
2004 to replace the firm of Henry Schiffer, CPA. The decision to change
independent auditors was approved by the Company's Board of Directors. This
change was not affected as a result of a dispute or disagreement.


PART III

Item 9.Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.

        The directors and executive officers of Xynergy are as follows:

        Name                            Age     Position

        Raquel Zepeda           52      President & Chairman
        Edward A. Rose, Jr.     52      Chief Fin. Officer, Director & Corp.
                                         Secty.
        Thomas Lupo             55      Director

        Directors serve until the next annual meeting of shareholders and until
their successors have been elected and have been qualified. Officers serve until
the meeting of the Board of Directors following the next annual meeting of
shareholders and until their successors have been elected and have been
qualified.

        RAQUEL ZEPEDA, is the founder and has served as President and as Chief
Executive Officer of Xynergy since its inception on August 6, 1993. Ms. Zepeda
established Colecciones de Raquel as a sole proprietorship in 1987. She
continues to be the source of product development and has maintained all aspects
of the Company's operations since its inception. (See "Business.")

        EDWARD A. ROSE, JR. is serving as Chief Financial Officer, Director, and
Corporate Secretary. now acting as the Xynergy's due diligence advisor, has
worked with Xynergy in several capacities since January, 2000. Mr. Rose has held
positions as Internal Auditor, Controller, and Contracts Administrator for
several Fortune 500 companies, conducting field due diligence reviews of
multimillion dollar operating companies in the U.S. South America, and Europe
for corporate acquisitions. Mr. Rose is a CPA licensed in both New York and
California and an attorney and a member of the State Bar of California. Mr. Rose
holds the additional position of General Manager of Border Motor Parts, Inc.

        TOM LUPO is serving as a Director on Xynergy's Board and has a vast
knowledge and experience in the network marketing industry. Mr. Lupo is a Senior
Executive with 30 years' experience in Direct Sales and Network marketing in the
US, Canada and Europe with such major international companies such as Avon,
Shaklee, Twinlab and Japanese-owned Noevir cosmetics. Managed sales, marketing
operations, product development and international sales and marketing efforts.
Considered a "pro" in direct-to-consumer marketing with an extensive background
in the Skin Care and Wellness industries. Has worked in large, small and "start
up" business models.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder
require Xynergy's officers and directors and persons who own more than 10% of
Xynergy's common stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and to furnish Xynergy with copies.

Item 10.  Executive Compensation.

      Compensation of Officers. No executive officer of Xynergy was paid cash or
non-cash compensation in excess of $100,000 during calendar years 2001, 2002, or
2003 and Xynergy filed a Stock Incentive Plan with its September, 2002 S-8. In
February 2004, the Company filed an S-8 Registration Statement. The following
table sets forth the cash compensation paid by Xynergy to its chief executive
officer for services rendered during calendar years, 2001, 2002, and 2003.

<TABLE>
<CAPTION>


                             Annual Compensation (1)
Name &                                                                          OtherAnnual
Principal Position                      Year    Salary ($)      Bonus ($)       Compensation

<S>                                     <C>
Raquel Zepeda, President                2003            --                   ---                        ---
                                        2002            --                   ---                        ---
                                        2001            --                   ---                        ---
</TABLE>

Incentive Stock Option Plan. Xynergy has adopted an Incentive Stock Option Plan
(the "Plan"). The purpose of the Plan is to secure and retain key employees of
Xynergy. The Plan authorizes the granting of options to key employees of
Xynergy. The Plan is administered by Xynergy's Board of Directors. No options
have been granted under the Plan. It may be expected that any options granted
will be exercised only if it is advantageous to the option holder and when the
market price of Xynergy's common stock exceeds the option price. In the event
that Xynergy grants options pursuant to the Plan, the existence of such options
may have a negative effect on the market price of Xynergy's common stock.

Compensation of Directors. Directors will receive a number of shares of common
stock as compensation for their services in an amount determined by the Board of
Directors.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

Security Ownership of Certain Beneficial Owners. The following table sets forth
information for each person who is known to Xynergy to be the beneficial owner
of more than five percent of any class of Xynergy's voting stock as of December
31, 2003:


<PAGE>


                                                                   Percent of
               Name and Address of                             Issued & Outstng
Title of Class          Beneficial Owner        Amt of Shares   of Class

Common Stock       Raquel Zepeda                3,999,200               13%
                   269 S. Beverly Dr.
                    Beverly Hills, CA

                        Raquel of
                        Beverly Hills, Inc.      10,000,000             32%

                        Machinations              3,000,000             10%

Preferred Stock Raquel Zepeda                     1,000,000              80%

                        Edward A. Rose, Jr.          250,000            20%

As of December 31, 200, there were 31,160,697 shares of common stock
outstanding, with each share entitled to one vote and 1,250,000 with each share
entitled to twenty votes. Therefore, Xynergy has securities outstanding with an
aggregate of 56,160,697 votes.

Security Ownership of Management. The following table sets forth as to each
class of equity securities of Xynergy beneficially owned by all of Xynergy's
directors and nominees, each of the named executive officers and by all of
Xynergy's directors and executive officers as a group:

                                                      Amount an
             Name and Address of             Nature of               Percent of
Title of Class  Beneficial Owner                Beneficial Owner        Class

Common Stock    Raquel Zepeda                   3,999,200 shares        13%
                        269 So. Beverly Dr.             owned directly
                        Beverly Hills, CA


Common Stock       All executive officers and   3,999,000 shares        13%
                        directors as a group

Changes in Control.. There are no agreements, arrangements, or pledges of
securities of Xynergy, the operation of which may at a subsequent date result in
a change of control of Xynergy.

Item 12.  Certain Relationships and Related Transactions.

                Not applicable.

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

        (a) Exhibits and Index of Exhibits.

        Exh.
         No.            Description

3.1Articles of Incorporation, incorporated by reference from Form SB-2
Registration Statement No. 33-76464-LA as filed on March 31, 1994, Exhibit 3(a).

3.2Amendment to Articles of Incorporation, incorporated by reference from Form
SB-2 Registration Statement No. 33-76464-LA as filed on March 31, 1994, Exhibit
3(b).

3.3Bylaws, incorporated by reference from Form SB-2 Registration Statement No.
33-76464-LA as filed on March 31, 1994, Exhibit 3(c).

3.4Amendment to Bylaws, incorporated by reference from Form SB-2 Registration
Statement No. 33-76464-LA as filed on March 31, 1994, Exhibit 3(d).

3.5Certificate of Determination of Rights and Preferences of Series A Preferred
Stock, incorporated by reference from Form 10K Registration Statement No.
41093.4-LA, as filed on December 31, 1995, Exhibit 3.5(a).

3.6Amended and Restated Bylaws, incorporated by reference from Form 10K
Registration Statement No. 41093.4-LA, as filed on December 31, 1995, Exhibit
3.6(a).

3.7Amendment to Certificate of Determination of Rights and Preferences of Series
A Preferred Stock, incorporated by reference from Form 10K Registration
Statement No. 97WLA13270018 as filed on December 31, 1996, Exhibit 3.7(a).

3.8Certificate amending articles of incorporation changing the corporate name
from Colecciones de Raquel, Inc. to Raquel, Inc.

3.9Certificate of Amendment to Articles of Incorporation filed with the
Company's 8-K, dated May 2, 2002, and incorporated herein by reference.

4.1Specimen Certificate of Common Stock, incorporated by reference from Form
SB-2 Registration Statement No. 33-76464-LA as filed on March 31, 1994, Exhibit
4(a).

      4.2Form of Warrant Agreement, incorporated by reference from Form SB-2
Registration Statement No. 33-76464-LA as filed on March 31, 1994 Exhibit 4(b).

                4.3Specimen A Warrant Certificate, incorporated by reference
from Form SB-2 Registration Statement No. 33-76464-LA as filed on March 31,
1994, Exhibit 4(c).

                4.4Specimen B Warrant Certificate, incorporated by reference
from Form SB-2 Registration Statement No. 33-76464-LA as filed on March 31,
1994, Exhibit 4(d).

                4.5Specimen C Warrant Certificate, incorporated by reference
from Form SB-2 Registration Statement No. 33-76464-LA as filed on March 31,
1994, Exhibit 4(e).

                4.6Specimen Certificate of Series A Preferred Stock,
incorporated by reference from Form SB-2 Registration Statement No. 33-76464-LA
as filed on March 31, 1994, Exhibit 4(g).

      10.1Incentive Stock Option Plan, incorporated by reference from Form SB-2
Registration Statement No. 33-76464-LA as filed on March 31,1994, Exhibit 4(g).

      10.2Employment Agreement dated January 31, 1994 between The Company and
Raquel Zepeda, incorporated by reference from Form SB-2 Registration Statement
No. 33-76464-LA as filed on March 31, 1994, Exhibit 10(b).

      10.3Trademark Application for "Colecciones de Raquel", incorporated by
reference from Form SB-2 Registration Statement No. 33-76464-LA as filed on
March 31, 1994, Exhibit 10(c).

      10.4Trademark No. 1,709,662 for "Sabor A Mi", incorporated by reference
from Form SB-2 Registration Statement No. 33-76464-LA as filed on March 31,
1994, Exhibit 10(d)

      10.5Agreement dated December 31, 1993 between The Company and Raquel
Zepeda, incorporation by reference from Amendment No. 1 to Form SB-2
Registration Statement No. 33-76464-LA as filed on May 9, 1994, Exhibit 10(e),

      10.6Settlement Agreement and General Mutual Release dated June 20,1995
between the Raquel Zepeda dba Colecciones de Raquel and Rixima, Inc.,
incorporated by reference from Form 10KSB Registration Statement No. 34597.1 as
filed on December 31, 1994, Exhibit 10.6(a).

      10.7Agreement dated September, 1994 between The Company and Moore
McKenzie, Inc., incorporated by reference from Form 10KSB Registration Statement
No.34597.1-LA as filed on December 31, 1994, Exhibit 10.7(a).

      10.8Commercial Lease dated September 29, 1995 between the Company and
Wallace H. Siegel and Allen Siegel, incorporated by reference from Form 10KSB
Registration Statement No.34597.1-LA as filed on December 31, 1994, Exhibit
10.8(a).

      10.9Amendment No. 1 to Employment Agreement dated January 1, 1996 between
the Company and Raquel Zepeda, incorporated by reference from Form 10KSB
Registration Statement No.34597.1-LA as filed on December 31, 1994, Exhibit
10.9(a).

      10.10Commercial Lease dated September 29, 1995 between the Company and
L.A. Pacific Center, Inc., incorporated by reference from Form 10KSB
Registration Statement No. 97-WLA-13270018 as filed on December 31, 1996.

      10.11 Distribution Agreement between Raquel, Inc. [formerly known as
Colecciones de Raquel] and R-Town Entertainment incorporated by reference from
Form 10KSB Registration Statement No. 98-WLA-123500 as filed March, 1998.

      10.12 Trademark No. 2,050,606 for Raquel, Inc. [formerly known as
Colecciones de Raquel] Face Logo" incorporated by reference from Form 10KSB
Registration Statement No. 98-WLA-123500 as filed March, 1998..

      10.13Certificate of Copyright Registration VA 736-099 for "RAQL Mark
(Logo)" incorporated by reference from Form 10KSB Registration Statement No.
98-WLA-123500 as filed March, 1998.

      10.14 Certificate of Copyright Registration SR 190-794 for Sabor A Mi,
"Melody Of Eternal Passion" incorporated by reference from Form 10KSB
Registration Statement No. 98-WLA-123500 as filed March, 1998..

      10.15 Certificate of Copyright Registration VA 334-469 for "Colecciones De
Raquel Color Collection Brochure".

      10.16 Notice of Allowance for Trademark "PELIGRO," SR 75/074408
incorporated by reference from Form 10KSB Registration Statement No.
98-WLA-123500 as filed March, 1998.

      10.17 Request For Extension of Time To File A Statement Of Use With
Declaration for Trademark "PELIGRO", SR 75/074408 incorporated by reference from
Form 10KSB Registration Statement No. 98-WLA-123500 as filed March, 1998..

      10.18 Notice of Approval of Extension Request for Trademark "PELIGRO", SR
75/074408 incorporated by reference from Form 10KSB Registration Statement No.
98-WLA-123500 as filed March, 1998.

      10.19 Contract with Con Estilo Latino

      10.20Contracts with A.R. Hardy & Associates and John W. Vanover
incorporated herein by reference from Form S-8 filed on June 17, 1998 (File No.
333-57061) 10.21 Trademark applications for "Chic'a Beverly Hills" and "Yoohoo."

      10.22 Employment agreement with Edward A. Rose, Jr.

      10.28Acquisition Agreement between Corporate Space Power Industries and
Electric, Inc. and Xynergy Corporation; incorporated herein by reference from
Form S-8 filed on May 3, 2002.

      10.29 Letter to Oppenheim & Ostrick incorporated herein by reference from
Form S-8 filed on May 3, 2002.

      10.30 Dissolution agreement between Xynergy and CSPIE dated August, 2002

      10.31 Cancellation Agreement of acquisition of Web Marketing Network, Inc.
dated August 26, 2002,

      10.32 Acquisition agreement between Voyaware, LLC and Xynergy Corp. dated
September, 2002.

      10.33 Letter from Todd Beutel to SEC re change in accountants to Henry
Schiffer, CPA.


      <PAGE>


      (b) Reports on Form 8-K.

      On September 20, 2000 a Form 8-K was filed, reporting the acquisition of
Think Blots greeting card line. The filing included the Acquisition Agreement as
an exhibit and is incorporated herein by reference.

      A Form 8-K was filed dated January 23, 2002 to report the acquisition of
Web Marketing Network,

      8-K filing dated May 2, 2002 reports acquisition of Corporate Space Power
Industries and Electric Corporation, change in auditors, and Amendment to
Articles of Incorporation..

      On May 2, 2002 a Form 8-K was filed reporting the acquisition of CSPIE.

      In June, 2002 a Form 8-K and subsequent 8-KA were filed to report the
change in accountants from Ostrick and Oppenheim to Beutel Accountancy.

      Form 8K and subsequent 8-KA were filed on May 2003, reporting Xynergy's
change in auditor from Todd Beutel to Henry Schiffer, C.P,A.


      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.

Dated: April 14, 2004                   XYNERGY CORPORATION
                                        [formerly known as RAQUEL, INC.]


                              By: /s/Raquel Zepeda
                                  -------------------
                                     Raquel Zepeda, President, Chief Executive

        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.

Signature



 /s/ Raquel Zepeda                                              April 14,  2004
RAQUEL ZEPEDA                   and Director)


     The signing officer has reviewed the report;

       Based on such officer's knowledge, the report does not contain any untrue
statement of material fact or omit a material fact necessary in order to make
statements made, in light of the circumstances under which such statements were
made, not misleading;
      Based on such officer's knowledge, the financial statements and other
financial information included in the report to be filed, fairly present in all
material respects the financial condition and results of operation of the
company as of, and for, the periods presented in the report;
       The signing officers are responsible for establishing and maintaining
      internal controls, have designed such internal controls to insure that
      material information relating to the company and its consolidated
      subsidiaries is made known to such officers, particularly during the
      period in which the periodic reports are to be prepared, have evaluated
      the effectiveness of the controls as of a date within 90 days prior to the
      date of the report, and have presented in the report their conclusions
      about the effectiveness of the controls based on their evaluation as of
      such date; The signing officers have disclosed to the company's auditors
      and the audit committee all significant deficiencies in the design or
      operation of internal controls which could adversely affect the company's
      ability to record, process, summarize and report financial data and have
      identified for the auditors any material weaknesses in internal controls
      and any fraud, whether or not material, that involves management or other
      employees who have a significant role in the company's internal controls;
      and
       The signing officers have indicated in the report whether or not there
were any significant changes in internal controls or other factors that could
significantly affect internal controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.