U.S. 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 AND EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 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 as 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 September 30, 2002, 26,931,697 shares of the Company's $.001 par value common
stock were outstanding.



<PAGE>


PART 1 - FINANCIAL INFORMATION

ITEM 1. Financial Statements
     (a)     Balance Sheet (Unaudited) -September 30, 2002                2

     (b)     Statements of Operations (Unaudited) - Three months ended
             September 30, 2002 and 2001 Period from Inception
             (December 1, 1987) to September 30, 2002                     3

     (c)     Statement of Stockholder's Equity (Unaudited) Period from
             Inception (December 1, 1987) to September 30, 2002           4

     (d)     Statements of Cash Flows (Unaudited) - Three months ended
             September 30, 2002 and Period from Inception
             (December 1, 1987) to September 30, 2002                     5

     (e)     Notes to Unaudited Financial Statements                      6

ITEM 2. Management's Discussion and Analysis or Plan of Operation        10

ITEM 3. Controls & Procedures                                            13


PART II - OTHER INFORMATION                                              13

Signature                                                                15
Certification                                                            16


                                       1

<PAGE>

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

                                                              September 30, 2002
                                                               -----------------
ASSETS

        Current Assets

                Cash and equivalents                             $       818
                Merchandise Inventory                                  8,870
                Deposits paid and other assets                       345,003
                                                                 -----------
                Total Current Assets                                 354,691

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

        Total Assets                                             $   354,691
                                                                 ===========


LIABILITIES AND STOCKHOLDERS EQUITY

        Current Liabilities

                Accounts payable & Taxes payable                 $    47,082
                                                                 -----------
                Total current liabilities                             47,082

        Stockholder's equity
                Common stock - $.001 par value, 250,000,000
                 shares authorized, 26,931,697 shares issued
                 and outstanding                                      26,931

                Additional paid in capital                         1,728,040

                Deficit accumulated during the development stage  (1,447,361)
                                                                 -----------
                Total stockholder's equity                           307,609
                                                                 -----------

        Total liabilities and stockholder's equity               $   354,691
                                                                 ===========

                 See accompanying notes to financial statements

                                       2
<PAGE>
<TABLE>
<CAPTION>
                               XYNERGY CORPORATION
                        (FORMERLY KNOWN AS RAQUEL, INC. )
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                          Nine Months          Inception 12/87 to
                                                      Ended September 30,        September 30,
                                                     2002          2001            2002
                                                 ----------     ----------     ------------------
<S>                                              <C>            <C>                <C>
Sales                                            $    1,405     $    3,611         $    49,479
Cost of Goods Sold                                        -            908              24,627
                                                 ----------     ----------         -----------

Gross Profit                                          1,405          2,703              24,852

Selling, general, and administrative expenses       30, 740        33,327            1,584,962
                                                 ----------     ----------         -----------

(Loss) from operations                              (30,740)        (30,624)         (1,560,110)

Other Income                                              -            230             119,148

Loss before provision for income taxes              (29,335)       (30,624)         (1,440,962)

Provision for income taxes                                -              -              (6,400)

Net Loss                                           ($29,335)      ($30,394)        ($1,447,362)
                                                 ==========     ==========         ===========

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

Weighted average number of common shares         26,931,697     29,700,000
                                                 ==========     ==========
</TABLE>





                 See accompanying notes to financial statements

                                       3

<PAGE>
<TABLE>
<CAPTION>
                               XYNERGY CORPORATION
                        (FORMERLY KNOWN AS RAQUEL, INC. )
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Unaudited)

                                                                                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                 36,115,000       36,115         244,850

Common Stock canceled              ( 9,500,000)      (9,500)

Net Loss September 30, 2002                                                        (29,335)     (29,335)
                                    ----------      -------      ----------    -----------     --------

Balance, September 30, 2002         26,930,697      $26,931      $1,728,040    $(1,447,361)    $307,609
                                    ==========      =======      ==========    ===========     ========
</TABLE>

                 See accompanying notes to financial statements

                                       4
<PAGE>
<TABLE>
<CAPTION>
                               XYNERGY CORPORATION
                        (FORMERLY KNOWN AS RAQUEL, INC. )
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                      For the Nine Month Period    Period from Inception
                                                               Ended                 (December 31, 1987)
                                                       September 30, 2002           to September 30, 2002
                                                      -------------------------    ----------------------
<S>                                                   <C>                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                $ (29,334)                  $( 1,447,361)
     Adjustments to reconcile net loss to net cash
      used in operating activities
       Depreciation                                                  0                         47,720
     (Increase) decrease in
      Inventory                                                                                (8,870)
      Prepaid expenses & other assets                         (282,135)                      (325,003)

     Increase (decrease) in
      Accounts Payable & accrued expenses                        8,479                         47,082
                                                             ---------                   ------------

     Net cash used in operating activities                   $(261,280)                  $ (1,686,432)
                                                             ---------                   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of Equipment & Improvements                               -                        (47,721)
                                                             ---------                   ------------

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

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from MMI settlement agreement                          -                   $  1,250,000
     Proceeds from sale of common stock                        259,377                        484,971
                                                             ---------                   ------------

     Net cash provided by financing activities                 259,377                   $  1,734,971
                                                             ---------                   ------------

     Net increase(decrease) in cash and cash equivalents     $ ( 1,903)


CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD                 $   2,721
                                                             ---------

CASH & CASH EQUIVALENTS, END OF PERIOD                       $     818
                                                             =========
</TABLE>

                 See accompanying notes to financial statements

                                       5
<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 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 greeting cards
(www.dementeddiagnosis.com), and VoyaWare, LLC.

RAQUEL OF BEVERLY HILLS markets premium cosmetics (color), skin care, and
fragrance, under the trademark, "Raquel of Beverly Hills.." 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. This market has a total of 35
million people, with $600 billion in buying power (defined as total personal
income of residents that is available, after taxes, for spending on goods and
services). That buying power figure more than tripled (from $190 Billion) over
the past 10 years, and is projected to grow to over $900 Billion by 2007.

THINK BLOTS greeting card line was the Company's first acquisition which was
consummated in September 2001. THINK BLOTS, a unique and entertaining concept in
greeting cards. They combine original ink blot art work with intriguing
dialogue. In addition, the line includes Demented Diagnosis, a "mental test."
Demented Diagnosis products will allow people to acquaint themselves with unique
concept of self-discovery from ink blot art. Think Blots greeting cards will be
placed along with the Demented Diagnosis test products
(www.dementeddiagnosis.com). Eventually, these "tests" will be syndicated and
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.

                                       6
<PAGE>
                              XYNERGY CORPORATION
                        (formerly known as Raquel, Inc.)
                         (A Development Stage Company)
                         Notes to Financial Statements
                                  (Unaudited)

1. Business, continued

VOYAWARE, LLC, which was acquired (see attached Exhibit 10.32) in September,
2002, is focused on developing innovative mobile solutions for today's Direct
Sales Professionals. Voyaware creates innovative mobile software for hand-held
computers used by independent direct sales professionals. Unlike most mobile
software, whose applications are geared for use by sales people working for
large corporations, VoyaWare is specifically tailored for the independent sales
professional. Targeting these direct sales professionals world-wide, a 100
billion dollar industry, VoyaWare's revenue projections are substantial. Xynergy
believes that with the appropriate marketing tools these goals will be met.

Their flagship product, "Voyaware Direct Sales," provides a comprehensive suite
of solutions that are useful to every mobile sales professional, and was
developed under the Windows CE platform which is quickly becoming the industry
standard. The software offers order entry, inventory management, customer &
product tracking, mobile printing, a variety of wizards and reporting options,
as well as built-in integration with Microsoft Pocket Outlook. The product is
very competitively priced at only $49.95, and there is also an enhanced
Professional version for only $30 more.

VoyaWare is committed to being the respected leader in mobile software solutions
and will provide to their clients the right tools to help them focus on what
they do best ... selling their products or services. VoyaWare maintains a team
of mobile experts to develop and customize mobile software solutions to be fully
integrated with individual business systems, or Lotus Notes applications,
delivering a complete end-to-end solution for client implementation of mobile
strategies.

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

2.  Unaudited financial statements

The financial statements as of September 30, 2002 included herein are unaudited
and not reviewed by the Company's auditors; 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.

Furthermore, due to the Company's limited financial position, the quarterly
financial statements have not been reviewed by its auditors. The accompanying
financial statements should be read in conjunction with the Company's annual
report filed on Form 10-KSB.

                                       7
<PAGE>

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

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.

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.


                                       8
<PAGE>

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

4.  Legal proceedings

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. Xynergy's Application for the trademark may not be
granted. However, the Company will continue to assert its copyrights to market
the greeting card line under the provisions for copyright law.

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

The Company leases space for storage of product at locations in Los Angeles,
CA.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.


                                       9
<PAGE>


ITEM 2.     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

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 September, Xynergy has successfully completed two acquisitions: Think
Blots greeting card line, and Voyaware, LLC. 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 markets premium cosmetics (color), skin care, and
fragrance, under the trademark, "Raquel of Beverly Hills." 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 line has received much
recognition, and has been written up in publications such as Latina Magazine.
Latinolink.com recognized designer, Raquel Zepeda as a "pioneer" in this segment
of the cosmetics industry.

                                       10
<PAGE>

Hispanics represent a total of 35 million people, with $600 billion in buying
power (defined as total personal income of residents that is available, after
taxes, for spending on goods and services). That buying power figure more than
tripled (from $190 Billion) over the past 10 years, and is projected to grow to
over $900 Billion by 2007. Hispanics and Hispanic buying power are now 2nd in
the US to the Caucasian market, have surpassed the Black population in numbers
and spending power, dwarf every national economy in the world except for the 11
largest countries, and by 2007, will pass Canada to become the world's eighth
largest economy.

RAQUEL OF BEVERLY HILLS now plans to tap into this market through expansion
directly and aggressively into 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 greeting card line was the Company's first acquisition which was
consummated in September 2001. THINK BLOTS is a totally unique and entertaining
concept in greeting cards. In addition, we will be introducing Demented
Diagnosis, (www.demented-diagnosis.com) a "mental test" as an advertising
campaign. Through 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.

Xynergy plans to promote THINK BLOTS into this $7.5 billion market by selling to
several distributors through industry magazines and tradeshows. Most recently,
the Demented Diagnosis test was used to test members of the Canadian indie rock
group, "The Corta Vita." The article was featured in the Fast Forward
(www.greatwest.ca/ffwd), a weekly entertainment magazine out of Calgary,
Alberta, Canada.

VOYAWARE creates innovative mobile software for hand-held computers used by
independent direct sales professionals. Unlike most mobile software, whose
applications are geared for use by sales people working for large corporations,
VoyaWare is specifically tailored for the independent sales professional.
Targeting these direct sales professionals world-wide, a 100 billion dollar
industry, VoyaWare's revenue projections are substantial. Xynergy believes that
with the appropriate marketing tools these goals will be met.

                                       11
<PAGE>

The Company believes that Voyaware's products would be very useful to Raquel of
Beverly Hills' independent sales consultants. Therefore, some of the sales kits
will include the Voyaware package, enhancing revenues for Voyaware. As such,
this would provide one vehicle for marketing two of Xynergy's subsidiary's
products. Additionally, Voyaware products will be marketed to the entire direct
sales industry.

Xynergy will continue to seek other acquisitions of successful companies in the
private sector who would like to enter the public arena.

Due to the innovativeness and uniqueness of its array of products, Xynergy
management believes that it will be able to attract financing from both the
private and public sectors in the near future.

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 Jafra
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. Xynergy expects that this new avenue of sales
and distribution will ultimately increase its revenues. See Plan of Operation
and above.

Think Blots is currently marketed on the internet on the website
www.dementeddiagnosis.com. 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.

MATERIAL CHANGES AND ANALYSIS OF FINANCIAL CONDITION

The Company's cash position has fluctuated during the nine month period ended
September 30, 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 September 30, 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.

                                       12
<PAGE>

ITEM 3.    Internal Controls and Procedures

Our Chief Executive Officer, President, and Chief Financial Officer (the
"Certifying Officer") is responsible for establishing and maintaining disclosure
controls and procedures for the Company.

The Certifying Officer has designed such disclosure controls and procedures to
ensure that material information is made known to her, particularly during the
period in which this report was prepared.

The Certifying Officer has evaluated the effectiveness of the Company's
disclosure controls and procedures within 90 days of the date of this report and
believes that the Company's disclosure controls and procedures are effective
based on the required evaluation. There have been no significant changes in
internal controls or in 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.


PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

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").

                                       13
<PAGE>
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.

The company filed an S-8 on June 11, 2002 and issued an additional stock, as of
June 30, 2002, the Company had 36,365,697 shares outstanding.

In August, 2002 the Company canceled 9.5 million shares which had been issued
to Web Marketing Network, Inc. and CSPIE, due to the cancellation of these
acquisitions.

In September, 2002 the Company filed an additional S-8 for its Stock Incentive
Plan, for issuance of 6 million shares.

ITEM 3.  Defaults Upon Senior Securities

Inapplicable.

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

Inapplicable.

ITEM 5.  Other Information

In July, Xynergy commenced designating an Advisory Board of Directors for the
Company. The first appointee to Xynergy's Advisory Board is Patrick Anthony of
Camden Securities, Inc. ("Camden") in Los Angeles a full-service broker-dealer.
Mr. Anthony has served as president of Camden since 1997. Previously, Patrick
served as CEO of Barrington Capital Group, an upward move from Dean Witter,
where he worked in various capacities for nine years. Mr. Anthony holds a
Masters in Economics and Finance from Prairie View, University of Texas and a
Bachelors in Business from Louisiana State University. He has over eighteen
years in the realm of investment banking.

On August 26, 2002, Xynergy canceled the acquisition of Web Marketing Network,
Inc. The Cancellation Agreement is attached hereto as Exhibit 10.31.

On September 14, 2002, Edward A. Rose, Jr. resigned as member of the Board and
President and Chief Financial Officer. The Company accepted his resignation.


ITEM 6.  Exhibits and Reports on Form 8K

(a)     Exhibits

        10.13    Acquisition Agreement Between Xynergy Corporation and
                 Voyaware, Inc., dated September 30, 2002

        99.1     Cancellation of Acquisition Agreement Between Xynergy
                 Corporation and Web Marketing Network, Inc.

(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..

                                       14
<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: November  24, 2002         By: /s/ Raquel Zepeda
                                      -----------------
                                      Raquel Zepeda, Chief Financial Officer,
                                      Chief Executive Officer & Chairman


                                       15
<PAGE>

CERTIFICATIONS

I, Raquel Zepeda, Chief Executive Officer and Chief Financial Officer, certify
that:

1. I have reviewed this quarterly report on Form 10-QSB of Xynergy Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 25, 2002


                                /s/ Raquel Zepeda
                                -----------------
                           Chief Executive Officer and
                             Chief Financial Officer

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