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: March 31, 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 incorporation or (I.R.S. Employer
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 Incorporation Zip Code
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 [ ] NO [X]
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 March 31, 2001
Common Stock 7,609,886
Par Value $.001
Per share
RAINWIRE PARTNERS, INC.
TABLE OF CONTENTS
Page
Part I Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
March 31, 2001 (unaudited) and December 31, 2000....................................1
Unaudited Condensed Consolidated Statements of Operations
for the three months ended March 31, 2001 and 2000..................................2
Unaudited Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 2001 and 2000..................................3
Statement of Changes in Stockholders' equity for the period
from December 31, 1999 to March 31, 2001 (unaudited)................................4
Notes to Condensed Consolidated Financial Statements................................5
Item 2. Plan of operation...................................................................5
Page
Part II Other Information
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 CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
------------ ------------
(unaudited)
ASSETS OF DISCONTINUED BUSINESS
CURRENT ASSETS
Cash $ 898 $ 2,043
Accounts receivable, net of allowance for
doubtful accounts of $29,575 21,962
Related party advance, unsecured 12,700
------------ ------------
TOTAL CURRENT ASSETS 898 36,705
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OTHER ASSETS
Deposits 6,257
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$ 898 $ 42,962
============ ============
LIABILITIES OF DISCONTINUED BUSINESS
CURRENT LIABILITIES
Shareholder loan $ 60,000 $ 60,000
Accounts payable 475,104 469,517
Accrued business disposal costs and expenses 511,731 513,016
Other accrued liabilities 63,995 110,361
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TOTAL CURRENT LIABILITIES 1,110,830 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, 7,609,886 shares 7,610 7,610
Paid-in capital 1,321,472 1,321,472
Deficit accumulated since inception (2,491,927) (2,491,927)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY
(DEFICIT)
(1,162,845) (1,162,845)
------------ ------------
$ 898 42,962
============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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RAINWIRE PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------------------
2001 2000
------------ ------------
Revenues $ -- $ --
Expenses
------------ ------------
Income (loss) from continuing operations -- --
Discontinued Operations:
Income from discontinued operations 28,879
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Net Income $ -- $ 28,879
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WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING $ 7,609,886 5,555,064
============ ============
Basic And Diluted Net Income Per Common Share $ -- $ --
Income From Discontinued Operations -- 0.01
------------ ------------
Basic And Diluted Net Income Per Common Share $ -- $ 0.01
============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2
RAINWIRE PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-------------------------------
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 -- 28,879
Depreciation and amortization 11,418
Changes in current assets and liabilities:
Accounts receivable 34,662 (104,972)
Other current assets 17,000
Deposits 6,257
Accrued liabilities (46,366)
Accounts payable 4,302 87,820
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Net Cash Flow Used by discontinued activities (1,145) 40,145
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment -- (27,597)
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Net cash flow from (to) investing -- (27,597)
activities
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NET CHANGE IN CASH FLOWS FOR THE PERIOD (1,145) 12,548
CASH, AT BEGINNING OF PERIOD 2,043 2,294
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CASH, AT END OF PERIOD $ 898 $ 14,842
========== ==========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
RAINWIRE PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDER'S EQUITY
COMMON STOCK
------------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
--------- ------ ----------- ----------- -----------
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)
--------- ------ ----------- ----------- -----------
BALANCE, DECEMBER 31, 2000 7,609,886 7,610 1,321,472 (2,491,927) (1,162,845)
Net income (loss) for the three months
ended March 31, 2001 -- --
--------- ------ ----------- ----------- -----------
BALANCE, MARCH 31, 2001 7,609,886 $7,610 $ 1,321,472 $(2,491,927) $(1,162,845)
========= ====== =========== =========== ===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
RAINWIRE PARTNERS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Three Months Ended March 31, 2001
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 March 31, 2001 and the
results of its operations and cash flows for the three months ended March 31,
2001 and 2000 have been made. Operating results for the three months ended March
31, 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.
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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. 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
None
Item 3. Defaults Upon Senior Securities
As of March 31, 2001, 24,959 shares of Series C preferred stock remain
outstanding. Dividends on theses shares total $2,621 and are still unpaid.
Item 4. Submission of Matters to a Vote of Security Holders
On March 5, 2001, the Company filed a Preliminary Information Statement
on Schedule 14C in connection with a proposed amendment to its Certificate of
Incorporation. On October 17, 2001, the Company reported on Form 8-K that
because the transaction contemplated by the Preliminary Information Statement
will no longer occur on the terms and conditions indicated in the Preliminary
Information Statement, the Company abandoned its Preliminary Information
Statement.
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
6
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:
During the first quarter of 2001, the Company filed no reports on From
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.
October 30, 2001 /s/ Ronald A. Potts
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President and Chief Executive Officer
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