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

                                  FORM 10-QSB

(Mark One)

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

For the quarterly period ended March 31, 2004

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE 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 |_|

The number of shares of the registrant's Common Stock, $.001 par value,
outstanding as of March 31, 2004 was 35,200,697.


<PAGE>

PART 1 - FINANCIAL INFORMATION

ITEM 1.Financial Statements

                                                                            PAGE

      (a)   Balance Sheet (Unaudited) - March 31, 2004                       1

      (b)   Statements of Operations (Unaudited) - Three months ended
            March 31, 2004 and 2003 and Period from Inception
            (August 6, 1993) to March 31, 2004                               2

      (c)   Statement of Stockholder's Equity (Unaudited) - Period
            from Inception (August 6, 1993) to March 31, 2004                3

      (d)   Statements of Cash Flows (Unaudited) - Three months ended
            March 31, 2004 and 2003 and Period from Inception
            (August 6, 1993) to March 31, 2004                               4

      (e)   Notes to Financial Statements                                    5

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

PART II - OTHER INFORMATION                                                  9


<PAGE>

                              XYNERGY CORPORATION
                           Consolidated Balance Sheet
                                   Unaudited

                       ASSETS

                                                                      March 31,
                                                                        2004
                                                                    -----------

CURRENT ASSETS
      Cash                                                          $       605
                                                                    -----------
      Total Current Assets                                                  605
                                                                    -----------

Deposit                                                                  30,000
                                                                    -----------

TOTAL ASSETS                                                        $    30,605
                                                                    ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Current Liabilities

      Accounts Payable                                              $    30,427
      Notes Payable                                                      79,363
                                                                    -----------

TOTAL LIABILITIES                                                       109,790
                                                                    -----------

STOCKHOLDERS' EQUITY/(DEFICIT)


      Preferred Stock authorized

      50,000,000 shares,$0.001 par value
      Issued and Outstanding March 31, 2004

       1,250,000 shares                                                   1,250

      Common Stock, authorized
      250,000,000 shares, $0.001 par value;
      35,200,697 Issued and outstanding                                  35,201

      Additional Paid in Capital                                      1,940,009

      Treasury stock                                                    (13,000)

      Deficit Accumulated During

      Development Stage                                              (2,042,645)
                                                                    -----------

      Total Stockholders' Equity/(Deficit)                              (79,185)
                                                                    -----------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                                                $    30,605
                                                                    ===========

    The accompanying notes are an integral part of these financial statements


                                       1
<PAGE>

                              XYNERGY CORPORATION
                      Consolidated Statements of Operation
                                   Unaudited


                                   Three Months    Three Months   From Inception
                                      Ended           Ended       August 6, 1993
                                     March 31,       March 31,    to March 31,
                                       2004            2003           2004
                                   ------------    ------------   --------------

INCOME

      Sales                        $          0    $         49    $     48,074
      Other Income                                                      119,148
                                   ------------    ------------    ------------

      Gross Income                           --              49         167,222

COST OF GOODS SOLD                                                      (24,627)
                                   ------------    ------------    ------------

      Gross Profit / (Loss)                  --              49         142,595
                                   ------------    ------------    ------------

EXPENSES

      General and Administrative        108,923           5,536       2,078,241
      Interest Expense                       --              --         100,599
                                   ------------    ------------    ------------

      Total Expense                     108,923           5,536       2,178,840
                                   ------------    ------------    ------------

(LOSS) BEFORE INCOME TAXES             (108,923)         (5,487)     (2,036,245)

      Provision for Income Taxes             --              --          (6,400)
                                   ------------    ------------    ------------

NET (LOSS)                         $   (108,923)   $     (5,487)   $ (2,042,645)
                                   ============    ============    ============

BASIC AND DILUTED
Net (Loss) per Common Share        $      (0.01)              a
                                   ------------    ------------

Weighted Average Number of

      Common Shares Outstanding      19,211,246      18,101,851
                                   ============    ============


a = Net (Loss) less than ($0.01) per share

    The accompanying notes are an integral part of these financial statements


                                       2
<PAGE>

                              XYNERGY CORPORATION
                        Statement of Stockholders' Equity
               from August 6, 1993 (Inception) thru March 31, 2004
                                    Unaudited

<TABLE>
<CAPTION>
                                                                                                             Accumulated
                           Preferred Stock    Common Stock                                        Stock   (Deficit) During
                          ----------------- --------------------    Paid in     Subscriptions   Owned by     Development     Total
                            Shares   Amount   Shares     Amount     Capital       Receivable   Subsidiaries      Stage      Equity
                          --------- ------- ----------  --------  ------------    ----------   ------------  ------------  ---------
<S>                       <C>      <C>      <C>        <C>       <C>             <C>           <C>         <C>          <C>
Net (Loss) from Inception
   to December 31, 1993             $    --             $     --  $         --    $       --    $      --   $   (36,640) $  (36,640)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1993                                                                                       (36,640)    (36,640)
Common shares issued to
   Founder                                     200,000       200        36,554                                               36,754
Common shares issued for
   cash with an "A"
   Warrant attached                             10,000        10        91,080                                               91,090
Preferred shares issued
   in exchange for common
   shares                   100,000     100   (200,000)     (200)          100                                                   --
Common shares issued in
   exercise of  "A"
   warrants (see Note 3
   Stockholders' Equity)                        10,000        10       249,990      (250,000)                                    --
Net (Loss) for the year                                                                                         (58,052)    (58,052)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1994   100,000     100     20,000        20       377,724      (250,000)                   (94,692)     33,152
Common shares issued in
   exercise of "B"
   warrants (see Note 3
   Stockholders' Equity)                        20,000        20       999,980    (1,000,000)                                    --
Cash Proceeds from MMI                                                               849,875                                849,875
Net (Loss) for the year                                                                                        (126,518)   (126,518)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1995   100,000     100     40,000        40     1,377,704      (400,125)                  (221,210)    756,509
Common shares issued in
   exchange for preferred
   shares                  (100,000)   (100)   200,000       200          (100)                                                  --
Cash Proceeds from MMI                                                               400,125                                400,125
Net (Loss) for the year                                                                                        (308,137)   (308,137)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1996        --      --    240,000       240     1,377,604            --                   (529,347)    848,497
Net (Loss) for the year                                                                                        (290,579)   (290,579)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1997        --      --    240,000       240     1,377,604                                 (819,926)    557,918
Common shares issued for
   consulting services                          33,000        33           297                                                  330
Net (Loss) for the year                                                                                        (217,582)   (217,582)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1998                           --        --       273,000           273    1,377,901    (1,037,508)    340,666
Common shares cancelled
   for services not
   rendered                                    (26,000)      (26)           26                                                   --
Net (Loss) for the year                                                                                        (169,677)   (169,677)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 1999        --      --    247,000       247     1,377,927                               (1,207,185)    170,989
Net (Loss) for the year                                                                                         (97,675)    (97,675)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 2000        --      --    247,000       247     1,377,927                               (1,304,860)     73,314
Common shares issued by
   exercise of options
   for cash                                     54,000        54        70,472                                               70,526
Net (Loss) for the year                                                                                        (113,167)   (113,167)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
</TABLE>

<PAGE>
                              XYNERGY CORPORATION
                        Statement of Stockholders' Equity
               from August 6, 1993 (Inception) thru March 31, 2004
                                    Unaudited

<TABLE>
<CAPTION>
                                                                                                             Accumulated
                           Preferred Stock    Common Stock                                        Stock   (Deficit) During
                          ----------------- --------------------    Paid in     Subscriptions   Owned by     Development     Total
                            Shares   Amount   Shares     Amount     Capital       Receivable   Subsidiaries      Stage      Equity
                          --------- ------- ----------  --------  ------------    ----------   ------------  ------------  ---------
<S>                       <C>      <C>      <C>        <C>       <C>             <C>           <C>         <C>          <C>
BALANCE DECEMBER 31, 2001                      301,000       301     1,448,399                               (1,418,027)     30,673
Common shares issued by
   exercise of options
   thru subscriptions
   receivable                                   15,000        15        37,485       (37,500)                                    --
Common shares issued
   for company
   acquisitions                             10,500,000    10,500                                                             10,500
Common shares issued by
   exercise of options
   thru subscriptions
   receivable                               2,000,000     2,000       198,000      (200,000)                                    --
Common shares issued by
   exercise of options
   thru subscriptions
   receivable                               1,000,000     1,000        24,000       (25,000)                                    --
Common shares issued by
   exercise of options
   thru subscriptions
   receivable                                  750,000       750        36,750       (37,500)                                    --
Common shares issued for
   services                                 13,035,851    13,036        98,935                                              111,971
Common shares issued to
   and held  by
   subsidiaries                             13,000,000    13,000                                  (13,000)                       --
Common shares cancelled
   for termination of
   acquisitions                             (9,500,000)   (9,500)                                                            (9,500)
Cash received on
   Subscriptions                                                                      20,250                                 20,250
Net (Loss) for the year                                                                                        (199,179)   (199,179)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE, DECEMBER 31, 2002       --      -- 31,101,851    31,102     1,843,569      (279,750)     (13,000)   (1,617,206)    (35,285)
Preferred shares Issued
   for services           1,250,000   1,250                             23,750                                               25,000
Common shares issued for
   services                                  3,398,846     3,399       167,290                                              170,689
Common shares cancelled
   for services not
   rendered                                   (900,000)     (900)                                                              (900)
Common shares cancelled
   for termination of
   subscriptions                            (2,500,000)   (2,500)     (222,500)      225,000                                     --
Write-Off uncollectable
   subscriptions
   receivable                                                                         54,750                                 54,750
Net (Loss) for the year                                                                                        (316,516)   (316,516)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
BALANCE DECEMBER 31, 2003 1,250,000 $ 1,250 31,100,697  $ 31,101  $  1,812,109    $       --    $ (13,000)  $(1,933,722) $ (102,262)
                          ========= ======= ==========  ========  ============    ==========    =========   ===========  ==========
COMMON SHARES ISSUED
   FOR SERVICES                  -- $    --  2,600,000  $  2,600  $     99,400                                           $  102,000
COMMON SHARES ISSUED FOR
   DEPOSIT COLLATERAL                        1,500,000  $  1,500  $     28,500                                           $   30,000
Net Loss for the Quarter                                                                                       (108,923)   (108,923)
                          --------- ------- ----------  --------  ------------    ----------    ---------   -----------  ----------
Balance March 31, 2004    1,250,000 $ 1,250 35,200,697  $ 35,201  $  1,940,009    $       --      (13,000)   (2,042,645)    (79,185)
                          ========= ======= ==========  ========  ============    ==========    =========   ===========  ==========
</TABLE>

On January 22, 2002 the Company had a 100:1 reverse stock split and wrote-up par
value from $0.0001 to $0.001. This reverse split and par value write-up has been
retroactively applied to the schedule including the price paid per share.

During 2002, 13,000,000 common shares were issued to wholly-owned subsidiaries
and have been consolidated in the balance sheet.

   The accompanying notes are an integral part of these financial statements


                                       3
<PAGE>

                               XYNERGY CORPORTION
                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                              From (Inception)
                                          For the 3 Months  For the 3 Months  August 6, 1993
                                           Ended March 31,   Ended March 31,    to March 31,
                                              2004              2003                2004
                                            ---------        ----------         -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                         <C>              <C>                <C>
  Net (Loss)                                $(108,923)       $   (5,487)        $(2,042,645)
  Adjustments to reconcile net loss to net
  cash provided by operating activities

    Preferred Stock issued for services            --                --              25,000
    Common Stock issued for Acqusitions            --                --               1,000
    Common Stock for Services                 102,000                --             420,844
    Common stock issued for collateral         30,000                                30,000
    Write-Off Subscriptions Receivable             --                --              54,750
    Depreciation Expense                                                             34,019
  Changes in assets and liabilities
    Decrease in Inventory                          --              (500)                 --
    Decrease/(Increase) in  Deposits          (30,000)                              (30,000)
  (Decrease)/ Increase in Accounts
    Payable                                      (450)            5,903              30,427
                                            ---------        ----------         -----------

Cash Flows (Used) by Operating Activities      (7,373)              (84)         (1,476,605)
                                            =========        ==========         ===========

Cash Flows Used by Investing Activities

  Purchase of Equipment                            --                --             (34,019)
                                            =========        ==========         ===========

Net Cash (Used) by Investing Activities            --                --             (34,019)
                                            ---------        ----------         -----------

Cash Flows From Financing Activities

  Proceeds Received from Stock Subscribed
    Receivable                                     --                --              20,250
  Proceeds from loans                           7,424                --              79,363
  Proceeds from sale of Common Stock               --                             1,411,616
                                            ---------        ----------         -----------

Cash Provided by Financing Activities           7,424                --           1,511,229
                                            =========        ==========         ===========

Net Increase/(Decrease) in Cash                    51               (84)                605

Cash, Beginning of Period                         554               147                  --
                                            ---------        ----------         -----------

Cash, End of Period                         $     605        $       63         $       605
                                            =========        ==========         ===========
</TABLE>

Significant Non-Cash Transactions

      During 1998 3,300,000 pre-split common shares were issued for consulting
            services valued at $330 of which 2,600,000 shares were cancelled
            during 1999 for services not rendered.

      During January 2002 1,500,000 pre-split common shares were issued for
            subscriptions receivable of $37,500.

      On January 22, 2002 outstanding common shares was reduced by 31,284,000
            in a 100:1 reverse stock split. Par value was increased to $0.001
            per share resulted in a net increase to paid in capital of $2,844.

      During 2002 after the reverse stock split the Company issued a net of
            1,000,000 shares for an acquisition valued at $1,000. It also issued
            13,000,000 common shares to subsidiaries valued at $13,000,
            additionally 3,750,000 shares were issued for subscriptions
            receivable of $262,500 and 13,035,851 common shares were issued for
            services valued at $111,971.

      During 2003 1,250,000 preferred shares were issued for services valued at
            $25,000; 3,398,846 common shares were issued for consulting services
            valued at $170,689; 900,000 common shares were cancelled for
            services not rendered valued at ($900); 2,500,000 common shares were
            cancelled for termination of $225,000 subscriptions receivable; and
            $54,750 of subscriptions receivable were written-off as
            uncollectable.

      During 2004 2,600,000 common shares were issued for services valued at
            $102,000; Additionally, 1,500,000 common shares were issued as
            collateral for a stock loan that was closed in April of
            2004;

<TABLE>
<CAPTION>
Supplemental Information:
<S>                                         <C>              <C>                <C>
        Period Interest                     $      --        $       --         $    98,448
        Income Taxes Paid                                                             6,400
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       4
<PAGE>

NOTE 1. ADJUSTMENTS

The financial statements as of March 31, 2004 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 for the year ended December 31,
2003 filed on Form 10-KSB.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has accumulated a
$2,042,645 loss during its development phase, has a deficit in stockholders'
equity and negative working capital. This raises substantial doubt about the
Company's ability to continue as a going concern. The Company's ability to
continue as a going concern is dependent upon its success in acquiring
additional capital.

There is no assurance that the Company will be successful in its efforts to
raise additional proceeds or achieve profitable operations. The financial
statements do not include any adjustments that might result from this
uncertainty.

Management is currently evaluating several proposals that would bring capital
into the company through a convertible debt offering.

NOTE 3. SUBSEQUENT EVENTS

On March 22, 2004, the Company entered into a three year loan agreement for
$27,500.00 dollars at prime plus 2% with a one year renewal option. The loan
calls for a pledge 1,500,000 shares of common stock as security and was closed
in April 2004..

On August 8, 2004 the Company signed an agreement with Indigo Technologies, Inc.
("Indigo") to acquire the issued and outstanding shares of Indigo for 36,000,000
million shares of the Company's stock.


                                       5
<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

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 were
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.

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.

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.

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, introduced Demented
Diagnosis(C), a "mental test" as a promotinal tool. Through Demented
Diagnosis(C) tests, people will acquaint themselves with unique concept of
self-discovery from ink blot art. Eventually, the Company plans to syndicate
Demented Diagnosis so that they may be placed alongside horoscopes and
cross-word puzzles.

The greeting card 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.

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.

THINK BLOTS will be distributed through retail outlets. Additionally, the
company is seeking syndication of DEMENTED DIAGNOSIS in periodicals which would
give Think Blots greeting card line additional exposure.

The above statements, in Plan of Operation and Distribution 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.


                                       7
<PAGE>

Material Changes and Analysis of Financial Condition

The Company's cash position has decreased during the three month period ended
March 31, 2004 due to the continued low level of revenue relative to its cost of
operations, and lack of offsetting inflows from financing activities. However,
in late March the Company was approved for a minimal loan secured against
Company stock. Proceeds were to be received in early April 2004.

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. Due to the minimal operating activities, Xynergy has not been able to
implement any sales or marketing strategies, resulting in no revenues for the
period ended March 31, 2004. 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

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 December, 2002 the Company had issued common
stock in exchange for consulting services, via S-8 filings. Some of these shares
were canceled due to litigation for non-performance on the part of some of these
consultants (see "Legal Proceedings"). In January of 2002, the company changed
its amount of authorized stock, common to 250,000,000 and preferred to
50,000,000. 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. 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.As of March 31, 2004, the
Company had 32,600,698 shares outstanding. (See Statement of Shareholder's
Equity.)


                                       8
<PAGE>

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..

      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 in May 2003, reporting Xynergy's
      change in auditor from Todd Beutel to Henry Schiffer, C.P,A.

      Form 8K and subsequent 8-KA were filed in March 2004, reporting Xynergy's
      change in auditors from Henry Schiffer, C.P,A to Weinberg & Co., along
      with a report on the dissolution of the acquisition of Intervest Group.


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<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: December 19, 2004               By: /s/ Raquel Zepeda
                                                Raquel Zepeda, Chief
                                                Executive Officer & Chairman

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;


                                       10
<PAGE>

      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.


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