SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 2001
Commission File Number: 0-23892
Rainwire Partners, Inc.
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(Exact Name of Registrant as
specified in its charter
Delaware 57-0941152
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Monteith Commons, First Floor
2931 Piedmont Road, N.E., Atlanta, Georgia 30305
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Address of Principal executive offices of Zip Code
Incorporation or organization
404-842-1510
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Registrants telephone number,
including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the last 90 days.
YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as to the latest practical date.
CLASS No. of shares Outstanding on September 30, 2001
Common Stock 19,909,886
Par Value $.001
Per share
RAINWIRE PARTNERS, INC.
TABLE OF CONTENTS
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
September 30, 2001 (unaudited) and December 31, 2000............................... 1
Unaudited Condensed Consolidated Statements of Operations for the
three and nine months ended September 30, 2001 and 2000............................ 2
Unaudited Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 2001 and 2000...................................... 3
Statement of Changes in Stockholders' equity for the period
December 31, 1999 to September 30, 2001 (unaudited)................................ 4
Notes to Financial Statements (unaudited).......................................... 5
Item 2. Plan of operation.................................................................. 5
PART II OTHER INFORMATION Page
Item 1. Legal Proceedings.................................................................. 5
Item 2. Changes in Securities and Use of Proceeds.......................................... 6
Item 3. Defaults Upon Senior Securities.................................................... 6
Item 4. Submission of Matters to a Vote of Security Holders................................ 6
Item 5. Other Information.................................................................. 6
Item 6. Exhibits and Reports on Form 8-K................................................... 7
RAINWIRE PARTNERS, INC.
CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS OF DISCONTINUED BUSINESS 2001 2000
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(unaudited)
CURRENT ASSETS
Cash $ 898 $ 2,043
Accounts receivable, net of allowance for
doubtful accounts 21,962
Related party advance, unsecured 898 12,700
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TOTAL CURRENT ASSETS 898 36,705
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OTHER ASSETS
Deposits -- 6,257
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$ 898 $ 42,962
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LIABILITIES OF DISCONTINUED BUSINESS
CURRENT LIABILITIES
Shareholder loan $ -- $ 60,000
Accounts payable 475,105 469,517
Accrued business disposal costs and expenses 509,612 513,016
Other accrued liabilities 53,613 110,361
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TOTAL CURRENT LIABILITIES 1,038,330 1,152,894
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REDEEMABLE PREFERRED STOCK
Par value $.01; authorized 2,500,00 shares issued 1999 -
24,959 shares 52,913 52,913
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value; authorized, 20,000,000 shares
outstanding, 19,909,886 and 7,609,886 shares 19,910 7,610
Paid-in capital 1,381,672 1,321,472
Deficit accumulated since inception (2,491,927) (2,491,927)
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TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,090,345) (1,162,845)
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$ 898 $ 42,962
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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RAINWIRE PARTNERS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2001 2000 2001 2000
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Revenues $ -- $ -- $ -- $ --
Expenses
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Income (loss) from continuing operations -- --
Discontinued Operations:
Loss From Discontinued Operations (345,526) (551,350)
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Net Loss $ -- $ (345,526) $ -- $ (551,350)
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WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 13,709,886 6,226,181 10,049,886 5,823,511
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Basic and Diluted Loss Per Common Share
Loss From Discontinued Operations -- (0.06) -- (0.09)
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Basic and Diluted Loss Per Common Share $ -- $ (0.06) $ -- $ (0.09)
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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RAINWIRE PARTNERS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30,
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2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES
Continuing Operations $ -- $ --
Discontinued Operations
Adjustments to reconcile net loss to net cash flows
used by discontinued activities
Income (loss) from operations of discontinued business (551,350)
Depreciation and amortization 43,999
Gain on sale of real property (6,092)
Changes in current assets and liabilities:
Accounts receivable 34,662 74,421
Other currents assets (9,586)
Deposits 6,257
Accounts payable and accrued liabilities (52,064) 116,891
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Net cash flows used by discontinued activities (11,145) (331,717)
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CASH FLOWS FROM INVESTING ACTIVITIES
Collections on notes receivable 22,292
Net cash received in asset acquisition 6,570
Decrease in other assets 2,527
Purchase of equipment -- (33,668)
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Net cash flows from (to) investing activities -- (2,279)
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CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable -- (352,292)
Proceeds from issuance of common stock 10,000 700,000
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Net cash flows from financing activities 10,000 347,708
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NET CHANGE IN CASH FLOWS FOR THE PERIOD (1,145) 13,712
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CASH, AT BEGINNING OF PERIOD 2,043 2,294
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CASH, AT END OF PERIOD $ 898 $ 16,006
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SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Shareholder loan paid by issuance of common stock $ 60,000
Legal services paid by issuance of common stock 2,500
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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RAINWIRE PARTNERS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
PAID-IN ACCUMULATED
COMMON STOCK CAPITAL (DEFICIT) TOTAL
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SHARES AMOUNT
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BALANCE, DECEMBER 31, 1999 5,555,064 $ 5,555 $ 609,375 $ (419,028) $ 195,902
Recapitalization, July 26, 2000 554,822 555 (188,329) (187,774)
Issuance of stock for:
Services at $.11 per share 480,000 480 52,320 52,800
Reduction in note payable at $1.25 per share 120,000 120 149,880 150,000
Cash at $.78 per share 900,000 900 699,100 700,000
Dividends accrued on redeemable preferred stock (874) (874)
Net (loss) for the year (2,072,899) (2,072,899)
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BALANCE, DECEMBER 31, 2000 7,609,886 7,610 1,321,472 (2,491,927) (1,162,845)
Issuance of stock for:
Reduction of shareholder loan 12,000,000 12,000 48,000 60,000
Legal fees 100,000 100 2,400 2,500
Cash 200,000 200 9,800 10,000
Net income (loss) for the nine months
ended September 30, 2001 -- --
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BALANCE, SEPTEMBER 30, 2001 19,909,886 $ 19,910 $ 1,381,672 $(2,491,927) $(1,090,345)
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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RAINWIRE PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)
Note 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited condensed
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the Company's financial position as of September 30, 2001 and
the results of its operations and cash flows for the three and nine months ended
September 30, 2001 and 2000 have been made. Operating results for the nine
months ended September 30, 2001 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2001.
These condensed financial statements should be read in conjunction with
the financial statements and notes thereto contained in the Company's Form
10-KSB for the year ended December 31, 2000
ITEM 2. PLAN OF OPERATION
For the near term, the Company continues to work towards finalizing its
stock exchange agreement with Oasis Group, Inc. It is financially dependent on
its shareholders, who have financed its existence since closing down its
operations in February 2001. Management of the Company believes that its
shareholders will continue to provide the finances the Company requires.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of the Company
including those of subsidiaries. Following are four such actions:
Azimuth Laboratory, Inc., a subsidiary of EVRM, generated hazardous
waste during the time of its operations which ceased in April, 2000. According
to a former landlord, Azimuth was responsible for a hazardous waste cleanup on
the leased premises, and he is seeking recovery of approximately $130,000,
including the cleanup and remaining payments due under the terms of the lease
agreement which is to expire in December, 2001. A motion for summary judgment is
expected to be heard by the end of 2001. Only the remaining lease obligation of
$66,271 has been recorded as of December 31, 2000.
As of December 31, 2000, a judgment against the Company was obtained by
the holder of the remaining Series C redeemable preferred stock for $21,666
relating to the failure by the
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Company to redeem 8,333 of those shares and to pay dividends when due.
Substantially all of that amount was recorded as of December 31, 2000.
IOS Capital, Inc. has made a demand to Rainwire for sums defaulted upon
as a result of an equipment lease signed by Rainwire in February, 1997. IOS
Capital indicated that they would compromise the amounts owed for the sum of
$15,479.20 in full satisfaction of the claim; however, Rainwire failed to make
the payment by the required date.
An action has been filed and reduced to a judgment against Rainwire
Partners, Inc. by H.E. Igoe in the amount of $21,665.96 filed on June 25, 2001.
This matter involved a share purchase agreement between Rainwire and Igoe.
Item 2. Changes in Securities and Use of Proceeds
In August, 2001, the Registrant issued 12,000,000 shares of its common
stock in settlement of loans in the principal amount of $60,000. These shares
were sold pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In August, 2001, the Registrant issued 100,000 shares of its common
stock to an individual for services provided and to be provided to the
Registrant. The services were valued at $2,500 or $0.025 per share. These shares
were sold pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In September, 2001, the Registrant issued 200,000 shares of its common
stock to an individual in exchange for $10,000 or at a price of $0.05 per share.
The individual was an accredited investor, and these shares were sold pursuant
to Section 4(2) of the Securities Act and have been marked "restricted."
In October, 2001, the Registrant issued 500,000 shares of its Series D
Convertible Preferred Stock to Osprey Investments, LLC in exchange for
10,000,000 shares of the Registrant's common stock. These shares were sold
pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
Item 3. Defaults Upon Senior Securities
As of December 31, 2000, a judgment against the Company was obtained by
the holder of the remaining Series C redeemable preferred stock for $21,666
relating to the failure by the Company to redeem 8,333 of those shares and to
pay dividends when due.
As of September 30, 2001, 24,959 shares of Series C Preferred Stock
remain outstanding. Dividends on these shares total $2,621 and are still unpaid.
Item 4. Submission of Matters to a Vote of Security Holders
None.
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Item 5. Other Information
In February, 2001, Rainwire Partners, Inc. ("Rainwire" or the
"Company") and Oasis Group, Inc., a Georgia corporation ("Oasis"), began
discussions concerning the use of Rainwire as a reverse merger vehicle to
position Oasis in the public market. These initial discussions did not result in
any agreements. After exploring similar agreements with other parties, the
Company re-entered discussions with Oasis in July, 2001.
On August 29, 2001, Rainwire and Oasis completed negotiations and the
Oasis Share Exchange Agreement was signed. It is a non-binding agreement subject
to the completion of due diligence and exchange of Schedules outlined in the
Oasis Share Exchange Agreement. Prior to the Closing, Rainwire plans to increase
its authorized common stock and reverse split its present outstanding shares.
The Company is seeking shareholder approval of the Oasis Share Exchange
Agreement and the transactions contemplated by it. The consent of persons
holding a simple majority (over 50%) of the outstanding Company common stock is
needed to approve the closing of the transaction and authorization of the other
transactions identified. Because current management owns greater than 50% of the
outstanding Company common stock, the Company expects to receive the necessary
shareholder approval and intends to prepare an Information Statement on Form 14C
to inform the remaining shareholders of the majority's decision. The Company
expects to mail the Information Statement to its shareholders on or about
November 25, 2001, and believes that the transaction will close on or about
December 15, 2001.
Upon execution of the Oasis Share Exchange Agreement, Walter H.
Elliott, the President and a director of the Company resigned, and Ronald A.
Potts was elected to the Board of Directors of the Company and was appointed
President and Chief Executive Officer of the Company. Additionally, Mike
McLaughlin and John Hill were elected to the Board of Directors and Peggy Evans
was appointed Chief Financial Officer.
Furthermore, upon execution of the Share Exchange Agreement, the
Company issued 12,000,000 shares of its common stock to Osprey Investments, LLC
(of which Lyne Marchessault is the sole member) in satisfaction of loans in the
principal amount of $60,000.
Item 6. Exhibits and Reports on Form 8-K:
A. Exhibits
3.4 Certificate of Designation of Series D Convertible Preferred Stock *
10.1 Plan and Agreement to Exchange Stock by and among Rainwire
Partners, Inc., Oasis Group, Inc. and the shareholders of
Oasis Group, Inc. *
* Incorporated by reference, filed as an Exhibit to report on form 10-KSB
for 2000, filed on October 30, 2001 (SEC File No. 000-23892)
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B. Reports on Form 8-K
During the third quarter of 2001, the Registrant filed no reports on
Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereto duly authorized.
RAINWIRE PARTNERS, INC.
November 1, 2001 /s/ Ronald A. Potts
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President and Chief Executive Officer
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