U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
                                 AMENDMENT NO. 1

(Mark One)

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

                 For the quarterly period ended March 31, 2002

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

                 For the transition period from ______ to ______

                         Commission File Number 0-24798

                               XYNERGY CORPORATION
                        [Formerly known as RAQUEL, INC.]

        (Exact name of small business issuer as specified in its charter)

            Nevada                                              93-1123005
(State or other jurisdiction                                  (IRS Employer
      of Incorporation)                                   Identification Number)

         269 So. Beverly Dr., Suite 938, Beverly Hills, California 90212
                    (Address of principal executive offices)

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

                           formerly known Raquel, Inc.
              (Former name, former address and former fiscal year,
                         if changed since last report)

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 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 |_|

At March 31, 2002, 15,315,697 shares of the Company's $.001 par value common
stock were outstanding.

<PAGE>

PART 1 - FINANCIAL INFORMATION

ITEM 1. Financial Statements                                                PAGE
                                                                            ----

         (a) Balance Sheet (Unaudited) -March 31, 2002 ......................  1

         (b) Statements of Operations (Unaudited) - Three months
             ended March 31, 2002 and 2001 Period from
             Inception (December 1, 1987) to March 31, 2002..................  2

         (c) Statement of Stockholder's Equity (Unaudited) -
             Period from Inception (December 1, 1987) to March 31, 2002......  3

         (d) Statements of Cash Flows (Unaudited) - Three months
             ended March 31, 2002 and Period from
             Inception (December 1, 1987) to March 31, 2002..................  4

         (e) Notes to Unaudited Financial Statements.........................  5

ITEM 2.  Management's Discussion and Analysis or
         Plan of Operation...................................................  7

PART II - OTHER INFORMATION..................................................  8


                                       ii
<PAGE>

                               XYNERGY CORPORATION
                        (formerly known as Raquel, Inc.)
                          (A Development Stage Company)
                                  Balance Sheet
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  March 31, 2002
                                                                                  --------------
<S>                                                                                <C>
Assets

         Current Assets

                  Cash and equivalents                                             $       527
                  Merchandise Inventory                                                  8,870
                  Deposits paid and other assets                                       341,855
                                                                                   -----------

                  Total Current Assets                                                 351,252

         Equipment, Furniture & Fixtures, net of accum. depr. $34,019                       -0-
                                                                                   -----------

         Total Assets                                                              $   351,252
                                                                                   ===========

Liabilities and Stockholders Equity

         Current Liabilities
                  Accounts payable & Taxes payable                                 $    40,492

                  Total current liabilities                                        $    40,492

         Stockholder's equity
                  Common stock - $.001 par value, 250,000,000 shares authorized,
                  15,315,697 shares issued and outstanding                              15,316

                  Additional paid in capital                                         1,720,690

                  Deficit accumulated during the development stage                  (1,425,246)

                  Total stockholder's equity                                           310,760

         Total liabilities and stockholder's equity                                $   351,252
                                                                                   ===========
</TABLE>

                 See accompanying notes to financial statements


                                                                               1
<PAGE>

                               XYNERGY CORPORATION
                        (formerly known as Raquel, Inc.)
                          (A Development Stage Company)
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months          Inception 12/87 to
                                                         Ended March 31,               March 31,
                                                      2002             2001             2002
                                                      ----             ----             ----
<S>                                               <C>             <C>              <C>
Sales                                                    115             932            48,189
Cost of Goods Sold                                        --             233            24,627
                                                ----------------------------------------------

Gross Profit                                             115             699            23,562

Selling, general, and administrative expenses          7,334           8,022         1,561,556
                                                ----------------------------------------------

(Loss) from operations                                (7,219)         (7,322)       (1,537,994)

Other Income                                              --             168           119,148

Loss before provision for income taxes                (7,219)         (7,200)       (1,418,846)

Provision for income taxes                                --             800            (6,400)

Net Loss                                             ($7,219)        ($7,200)      ($1,425,246)
                                                ==============================================

Net Loss per share                                     ($.01)          ($.01)
                                                ============================

Weighted average number of common shares          15,315,697      24,700,000
                                                ============================
</TABLE>

                 See accompanying notes to financial statements


                                                                               2
<PAGE>

                               XYNERGY CORPORATION
                        (formerly known as Raquel, Inc.)
                          (A Development Stage Company)
                        Statement of Stockholders' Equity
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          Deficit
                                                                          Addt'l         During the
                                                Common Stock              Paid In       Development
                                            Shares          Amount        Capital          Stage           Total
                                          ----------------------------------------------------------------------
<S>                                       <C>             <C>            <C>            <C>              <C>
Balance, December 31, 1998                27,300,000          2,730      $1,375,444      (1,027,508)      340,666

Common stock canceled                     (2,600,000)          (260)                                            0

Net Loss                                                                                   (169,677)     (169,677)
                                          ----------      ---------      ----------     -----------      --------

Balance, December 31, 1999                24,700,000      $   2,470      $1,375,704     $(1,207,185)     $170,989

Net Loss                                                                                    (97,675)      (97,675)
                                          ----------      ---------      ----------     -----------      --------

Balance December 31, 2000                 24,700,000      $   2,470      $1,375,704     $(1,304,860)     $ 73,314

Net Loss for 12/31/01                                                                      (113,167)     (113,167)

Balance December 31, 2001                 30,100,000      $   3,010      $1,445,690     $(1,418,027)     $ 30,673
                                          ----------      ---------      ----------     -----------      --------

Common Stock Issued for options            1,500,000      $     150      $   37,500
                                           ---------      ---------      ----------

Total Before Reverse                      31,600,000      $   3,160      $1,483,190

Reverse-split (100 to 1)                 (31,284,303)     $  (3,128)

Total After Reverse                          315,697      $      32
                                                          =========
Increase in par value to .001                             $     316

Common Stock issued for options            3,500,000      $   3,500      $  237,500
Common Stock, 144 restricted issued       11,500,000      $  11,500
Net Loss March 31, 2002                                                                 $    (7,219)
                                          ----------      ---------      ----------     -----------      --------

Balance, March 31, 2002                   15,315,697      $  15,316      $1,720,690     $(1,425,246)     $310,760
</TABLE>

                 See accompanying notes to financial statements


                                                                               3
<PAGE>

                               XYNERGY CORPORATION
                        (formerly known as Raquel, Inc.)
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                        Period from Inception
                                                    For the Thee Month Period Ended         December 31, 1987
                                                                          March 31,                to Current
                                                                               2002            March 31, 2001
                                                    ---------------------------------------------------------
<S>                                                                       <C>                    <C>
Cash flows from operating activities
Net loss                                                                  $  (7,219)             $(1,425,246)
Adjustments to reconcile net loss to net cash used in
operating activities
              Depreciation                                                        0                   42,369
        (Increase) decrease in
              Inventory                                                                               (8,870)
              Prepaid expenses & other assets                              (271,864)                (314,732)

         Increase (decrease) in
              Accounts Payable & accrued expenses                             1,889                   40,492
                                                                          ---------              -----------

              Net cash used in operating activities                       $(277,864)             $(1,665,987)
                                                                          ---------              -----------

Cash flows from investing activities
              Purchase of Equipment & Improvements                               (0)                 (47,721)

              Net cash used in investing activities                              (0)             $   (47,721)
                                                                                                 -----------

Cash flows from financing activities
         Proceeds from MMI settlement agreement                                  --              $ 1,250,000
         Proceeds from sale of common stock                                 275,000                  433,936
         Payments for offering costs                                             --

Loans & paid-in capital from  stockholder                                        --                   36,754
                                                                          ---------              -----------

         Net cash provided by financing activities                          275,000              $ 1,720,690
                                                                          ---------              -----------

         Net increase(decrease) in cash and cash                            ($2,194)
              equivalents                                                 ---------

Cash & cash equivalents, beginning of period                              $   2,721
                                                                          ---------

Cash & cash equivalents, end of period                                    $     527
                                                                          =========
</TABLE>

                 See accompanying notes to financial statements


                                                                               4
<PAGE>

                               XYNERGY CORPORATION
                        (formerly known as Raquel, Inc.)
                          (A Development Stage Company)
                          Notes to Financial Statements
                                   (Unaudited)

1. Business

XYNERGY CORPORATION (formerly known as Raquel, Inc.) (the "Company") 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(TM)greeting cards and
Web Marketing Network, Inc., Raquel, Inc. became Xynergy Corporation. Xynergy is
now a holding company for the following subsidiaries: Raquel of Beverly Hills
cosmetics (www.Raquelinc.com), Think Blots(TM)greeting cards
(www.demented-diagnosis.com), and Web Marketing Network, Inc.
(www.TargetPlanet.com), and Corporate Space Power Industries & Electric.

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. The line is currently available on the internet at
www.dementeddiagnosis.com.

Web Marketing Network, Inc. of Canada, ("WMN"), an e-commerce marketing company,
was acquired in January 2002. WMN is a provider of advertising services such as
opt-in and direct email marketing, pay per click programs, search engine
placement, marketing consultation, lead generation, affiliate marketing systems
design, multi-level marketing (MLM) customer acquisition programs.

On March 26, 2002, Xynergy signed a letter of intent to acquire Corporate Space
Power Industries & Electric, Inc. ("CSPIE"). CSPIE has developed an innovative
method of tapping solar power through space satellite laser transmission.CSPIE
has contracted NASA/JPL engineers to assist in testing the satellite space power
system. In a letter of intent from the director of the Institute of Electrical
Engineering of the Chinese Academy of Sciences, China has agreed to purchase a
power plant system of its own upon completion of the CSPIE's first successful
demonstration. The acquisition was consummated on April 22, 2002. Under the
terms of the agreement, Xynergy will issue Three Million Shares (3,000,000)
shares of common stock in exchange for 100% of CSPIE's assets, including ten
million shares (10,000,000) of common stock (which represents all issued and
outstanding shares of CSPIE) Further details of this agreement, such as options,
etc., are contained the 8-K filing dated May 2, 2002 and are incorporated herein
by reference.

For more information on Xynergy's subsidiaries, see Managment's Plan of
Operation.

2. Unaudited financial statements

The financial statements as of March 31, 2002 and March 30, 2001 included herein
are unaudited; however, such information reflects all adjustments consisting of
normal recurring adjustments, which are, in the opinion of management, necessary
for a fair presentation of the information for such periods. In addition, the
results of operation for the interim periods are not necessarily indicative of
results for the entire year. The accompanying financial statements should be
read in conjunction with the Company's annual report filed on Form 10-KSB.

3. Historical Development & Public Offering

Historical Development. Raquel Zepeda, Chairman 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.

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.

                 See accompanying notes to financial statements


                                                                               5
<PAGE>

In 1995, the Company learned that the A and B warrants had been fraudulently
exercised. Transactions for these warrants involved MMI, a brokerage firm based
in the Philippines. In September of 1995 MMI settled with the Company and paid
for the A and B warrants. All C warrants were canceled.

From September 1995 through February 1996, the Company received $1,250,000 in
full payment for the exercise of the A and B warrants. As a result, the Company
was able to expand its operations.

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. All products are being
sold and marketed through these boutiques. Additionally, the Company has
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. The compact disc contains information on the Company's line of cosmetics
along with a sample fragrance strip and product ordering information.

In 2001, the Company changed its strategy to diversify by acquiring companies in
various growth markets. To date, Xynergy owns four subsidiaries. See Business
section above.

4. Legal proceedings

In September of 1998, the Company filed a complaint and Demand for Arbitration
before the American Arbitration Association against John W. Vanover. The Demand
for Arbitration is for the return of $10,000 in cash and stock certificates for
2.6 million Company common shares. The basis of the dispute is for
non-performance, bad faith, and willful malfeasance. An Arbitration hearing was
held on July 16, 1999, before the American Arbitration Association in regard to
the Company's claims against John W. Vanover. On August 5, 1999 the Company
received notice that the Company had been awarded its demands in the Complaint.
As a result, 2.6 million shares have been canceled, additionally, the Company
was awarded $10,000, plus cost of suit.

In 1999, Xynergy [Raquel, Inc.] filed a lawsuit against Angela Z. Hardy for the
return of S-8 stock issued to her for investor relations services. A judgement
was obtained against Ms. Hardy.

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.

Previously, March 2001, Rainmaker Corporation filed and 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.

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

5. Leases

On October 1, 1995, the Company entered into a two year lease for a store front
located in Beverly Hills, California. In October, 1997 this lease was renewed
for another 2 years. The space is approximately 700 square feet, and the monthly
rent is $1,100. This lease expired in October 1999, and the Company has
continued to occupy the premises on a month-to-month basis. In May 1996, the
Company entered into a three year lease for a 900 square foot store front in
downtown Los Angeles, California. Monthly rent for the space, which the Company
is utilizing for its second showroom/boutique location, is $1,451 per month.
This lease expired on June 30, 1999, and the store has been closed.

As of June 30, 2000, the Company moved its offices, the mailing address is 269
So. Beverly Drive, Suite 938, Beverly Hills, California 90212, telephone number
(310) 274-0086, fax number (310) 274-0161.


                                                                               6
<PAGE>

ITEM 2. Management's Discussion And Analysis Or Plan Of Operation

Plan of Operation

Xynergy has expanded its plan of operation substantially, since its change in
strategy as a holding Company. Xynergy's new name, Xynergy, expressly describes
this change in plan and mission. XYNERGY, pronounced "zin-er-gee," is derived
from "synergy" which means "the combined action of two or more entities to
achieve an effect which is greater than that of which each individually is
capable.'

Xynergy's mission is revenue enhancement through an integration of companies in
growth and emerging markets. Xynergy believes that this will protect its value
as markets change and fluctuate.

As of April 22, Xynergy has successfully completed three acquisitions: Think
Blots(TM) greeting card line, Web Marketing Network, Inc., and Corporate Space
Power Industries & Electric, Inc. These companies represent various market
segments that will allow Xynergy to maintain its position in the future, no
matter how industries and commerce fluctuate. Below are marketing plans for
Xynergy's subsidiaries.

RAQUEL OF BEVERLY HILLS now plans to increase sales through expansion directly
and aggressively through network/multi-level marketing. According to the Direct
Selling Association, in 1999 U.S. Retail Sales were equivalent to $24.54
billion. Personal care represented 24.9% or $6.11 billion dollars. In
comparison, according to NPD Beauty Trends, cosmetics sales in department stores
was $6.5 billion in 1999. 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.

By implementing its marketing plan, RAQUEL OF BEVERLY HILLS projects sales
exceeding $80 million within 5 years. This represents slightly over 1% of its
focus market in the U.S. and Latin America. The U.S. Hispanic cosmetics is
estimated to be 1.6 billion, and the Latin American market is estimated to be
over $5.9 billion, totaling $7.5 billion. RAQUEL OF BEVERLY HILLS further
anticipates a market share of non-Hispanic, golden-skinned consumers such as
Asians, Mediterraneans and some Europeans.

Think Blots(TM) greeting card line was the Company's first acquisition which was
consummated in September 2001. THINK BLOTS(TM) is a totally unique and
entertaining concept in greeting cards. In addition, we will be introducing
Demented Diagnosis(C), a "mental test" as an advertising campaign. Through
Demented Diagnosis(C) 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.

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.

Corporate Space Power Industries & Electric, Inc ("CSPIE") was acquired in
April, 2002. CSPIE has developed an innovative method of tapping solar power
through space satellite laser transmission.

Collecting solar power 24 hours a day, these space satellites will provide an
environmentally safe and economical source of energy. Ultimately, CSPIE will
create the first multi-billion watt space power generation system, emitting
energy through a blue colored laser, to an earth-based receiver. CSPIE has
contracted NASA/JPL engineers to assist in testing the satellite space power
system. The construction of the system will take place at Marshall Space Flight
Center in Huntsville, Ala.

In a letter of intent from the director of the Institute of Electrical
Engineering of the Chinese Academy of Sciences, China has agreed to purchase a
power plant system of its own upon completion of the CSPIE's first successful
demonstration. China has a special interest due to its environmental problems.

Xynergy has retained counsel and consultants to execute a second round of
financing to obtain working capital for Xynergy and its subsidiaries.


                                                                               7
<PAGE>

Distribution

Raquel of Beverly Hills changed its marketing structure to direct sales. The
Company's management believes that this structure would better serve its
consumers. Further, direct sales has been very successful among its target
market, Hispanics. Direct cosmetics companies such as Avon, Mary Kay, and Jaffra
have a strong presence and continue to expand in many Latin American countries.

According to statistics, direct sales in 1999 in the United States totaled
$24.54 billion, with the personal care category representing 24.9%; an
equivalent of $6.11 billion. Raquel, Inc. expects that this new avenue of sales
and distribution will ultimately increase its revenues. See Plan of Operation
and above.

Think Blots(TM) is currently marketed on the internet on the website
www.dementeddiagnosis. The Company is also in the process of obtaining
syndication of its Demented Diagnosis tests in newspapers for further marketing
of the greeting card line. See Plan of Operation above.

Web Marketing Network, Inc. ("WMN") advertises and distributes its services via
several sites:TargetPlanet.com, ElectricMarketing.com,Going2Advertise.com,
2MinuteMarekting.com, and RussellRockefellerr,com providing a wide variety of
marketing services that generate unlimited sales leads, handle e-commerce such
as credit card fulfillment, check by fax, on-line or by phone, ach debit and
similar transactions

Corporate Space Power Industries & Electric, Inc. plans to distribute its
innovative method of tapping solar power through several resellers of energy.

The above statements, in Plan of Operation and Distribution (pages 7 and 8) are
based on the Company's ability to obtain appropriate financing to execute its
marketing plans. This information, therefore, contains forward-looking
statements. As such, the Company is including the following: Safe Harbor
Statement under the Private Securities Litigation Reform Act of 1995: The
statements contained herein which are not historical fact are forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed in the forward-looking
statements.

Material Changes and Analysis of Financial Condition

The Company's cash position has decreased during the three month period ended
March 31, 2002 due to the continued low level of revenue relative to its cost of
operations, and lack of offsetting inflows from financing activities.

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.

However, due to the minimal operating activities, Xynergy has not been able to
implement any sales or marketing strategies, resulting in minimal revenues for
the period ended March 31, 2002. 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.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

In September of 1998, the Company filed a complaint and Demand for Arbitration
before the American Arbitration Association against John W. Vanover. The Demand
for Arbitration is for the return of $10,000 in cash and stock certificates for
2.6 million Company common shares. The basis of the dispute is for
non-performance, bad faith, and willful malfeasance. Other than this item, there
are no material pending legal proceedings to which the Company or the property
of the Company are subject.

An Arbitration hearing was held on July 16, 1999, before the American
Arbitration Association in regard to the Company's claims against John W.
Vanover. On August 5, 1999 the Company received notice that the Company had been
awarded its demands in the Complaint.As a result, 2.6 million shares have been
canceled, additionally, the Company was awarded $10,000, plus cost of suit.
These monies have not yet been collected.


                                                                               8
<PAGE>

On June 27, 2000, a Complaint against Angela Z. Hardy and Corporate Image
Builders was filed in Santa Monica Superior Court for several causes of action.
The Company was awarded stock in January, 2001.

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.

Previously, March 2001, Rainmaker Corporation filed and 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.

Currently, there are no material pending legal proceedings against the Company.
In addition, no proceedings are known to be contemplated by a governmental
authority against the Company or any officer or director of the Company.

Item 2. Changes in Securities

From the period of 1998 through February, 2002 the Company had issued common
stock in exchange for consulting services, via S-8 filings; totaling in excess
of 7 million shares. Some of these shares were canceled due to litigation for
non-performance on the part of some of these consultants (see "Legal
Proceedings"). As of February 1, 2002, the Company had 31,600,000 shares
outstanding.

In February, 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. The name change was due to its expansion into other markets and
acquisitions of other companies. (See Page 6, 1. Business.)

In March, 2002 options were exercised for 3,500,000 shares, and 11,500,000
shares of restricted 144 stock were issued to subsidiaries and principals for
compensation. As of March 31, 2002, the Company had 15,315,697 shares
outstanding; with 11,500,000 in 144 restricted stock, representing 75% of shares
issued and outstanding stock.

Item 3. Defaults Upon Senior Securities

Inapplicable.

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

Inapplicable.

Item 5. Other Information

Inapplicable.

Item 6. Exhibits and Reports on Form 8K

(a)   Exhibits

Inapplicable.

(b)   Reports on Form 8-K

      8-K filing dated January 23, 2002 reports acquisition of Web Marketing
      Network, Inc. 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.


                                                                               9
<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.

                                          XYNERGY CORPORATION
                                          (FORMERLY KNOWN AS RAQUEL, INC.)
                                          (Registrant)

Dated: June 12, 2002


                                          By:        /s/ Raquel Zepeda
                                              ----------------------------------
                                              Raquel Zepeda,
                                              Chief Financial Officer & Chairman


                                                                              10