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EX-32.2 - SECTION 906 CERTIFICATION - RainEarth Inc.exhibit32-2.htm
EX-31.1 - SECTION 302 CERTIFICATION - RainEarth Inc.exhibit31-1.htm
EX-31.2 - SECTION 302 CERTIFICATION - RainEarth Inc.exhibit31-2.htm
EX-32.1 - SECTION 906 CERTIFICATION - RainEarth Inc.exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2011

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b - 2 of the Exchange Act)   [x ]Yes   No [  ]

Commission File Number 000-52758

RAINEARTH INC.
(formerly GoldRock Resources, Inc.)
(Name of small business issuer in its charter)

Nevada N/A
(State or Other Jurisdiction of Organization) (IRS Employer Identification #)

A No.1 Building, ShangDu International Tower,
No.8 DongDaQiao Road, Beijing,
China 100020
(Address of principal executive offices, including zip code)

(852) 3005-7220
(Registrant's 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 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 past 90 days.
Yes [X]    No [   ]

The Registrant is a Shell company.
Yes [X]    No [   ]

As of September 7, 2011, the Company has 52,000,000 shares of common stock issued and outstanding.

1


RainEarth Inc.
Form 10-Q for the period ended July 31, 2011

TABLE OF CONTENTS

  Page
   
PART I - FINANCIAL INFORMATION 3
   
ITEM 1 - FINANCIAL STATEMENTS (Unaudited) 3
   
           Balance Sheets F-1
   
           Statements of Operations F-2
   
           Statements of Stockholders' Equity (Deficit) F-3
   
           Statements of Cash Flows F-4
   
           Notes to Financial Statements F-5
   
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 4
   
ITEM 3 -QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 7
   
ITEM 4 - CONTROLS AND PROCEDURES 7
   
ITEM 4A - INTERNAL CONTROL OVER FINANCIAL REPORTING 7
   
PART II - OTHER INFORMATION 8
   
ITEM 1 - LEGAL PROCEEDINGS 8
   
ITEM 1A - RISK FACTORS 8
   
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 8
   
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 8
   
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 8
   
ITEM 5 - OTHER INFORMATION 8
   
ITEM 6 - EXHIBITS 8
   
SIGNATURES 9

2


PART I. - FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS.

3



RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
Balance Sheets
(Expressed in US Dollars)
 

    July 31,     April 30,  
    2011     2011  
    (Unaudited)        
ASSETS          
Current Assets            
 Cash $  506   $  346  
Total Current Assets   506     346  
Other Assets   -     -  
Total Assets $  506   $  346  
             
             
             
             
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)            
Current Liabilities            
 Accounts payable and accrued liabilities $  84,323   $  59,532  
 Due to related party   46,910     46,021  
Total current liabilities   131,233     105,553  
Stockholders' Equity (Deficit)            
             
  Preferred stock, $0.00001 par value; authorized 1,000,000,000 shares,
    Issued and outstanding: 0 and 0 shares, respectively
  -     -  
  Common stock, $0.00001 par value; authorized 1,000,000,000 shares,
    Issued and outstanding: 52,000,000 and 52,000,000 shares, respectively
  520     520  
  Additional paid-in capital   787,865     785,615  
  Deficit accumulated during the development stage   (919,112 )   (891,342 )
Total stockholders' equity (deficit)   (130,727 )   (105,207 )
Total Liabilities and Stockholders' Equity (Deficit) $  506   $  346  

See notes to financial statements.
F-1



RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
Statements of Operations
(Expressed in US Dollars)
(Unaudited)
 

                Cumulative  
                during the  
                development  
                stage (March  
    Three months     Three months     14, 2006 to  
    ended July     ended July     July 31,  
    31, 2011     31, 2010     2011)
                   
                   
Revenues $  -   $   $ -  
Expenses                  
 Impairment of investment in Beijing RainEarth   -     -     604,756  
 Amortization of investment in Beijing RainEarth   -     -     35,244  
 Donated rent   750     750     16,125  
 Donated services   1,500     1,500     32,250  
 General and administrative   61     36     44,441  
 Impairment of mineral claim acquisition costs   -     -     3,062  
 Professional fees   25,459     3,600     183,234  
Total Costs and Expenses   27,770     5,886     919,112  
Net Loss $  (27,770 $     (5,886 $ (919,112 )
                   
Net Loss per share                  
 Basic and diluted $  (0.00 $ (0.00 )      
                   
Number of common shares used to compute loss per share                  
 Basic and Diluted   52,000,000     52,000,000        

See notes to financial statements.
F-2



RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
For the period March 14, 2006 (Inception) to July 31, 2011
(Expressed in US Dollars)
 

                      Deficit        
                      Accumulated     Total  
    Common Stock, $0.00001 Par
Value
    Additional     During the     Stockholders'  
        Paid-in     Development     Equity  
    Shares     Amount     Capital     Stage     (Deficit)  
Common stock issued for cash
   at a price of $0.000001 per share
  10,000,000   $ 100   $  (90 ) $ -   $  10  
Donated services and rent   -     -     1,125     -     1,125  
Net loss   -     -     -     (19,175 )   (19,175 )
Balance, April 30, 2006   10,000,000     100     1,035     (19,175 )   (18,040 )
Donated services and rent   -     -     9,000     -     9,000  
Net loss   -     -     -     (30,490 )   (30,490 )
Balance, April 30, 2007   10,000,000     100     10,035     (49,665 )   (39,530 )
Sale of shares in public offering
   at $0.01 per share
  10,000,000     100     99,900     -     100,000  
Donated services and rent   -     -     9,000     -     9,000  
Net loss   -     -     -     (34,510 )   (34,510 )
Balance, April 30, 2008   20,000,000     200     118,935     (84,175 )   34,960  
Common stock issued in connection
   with investment in Beijing RainEarth
  32,000,000     320     639,680     -     640,000  
Donated services and rent   -     -     9,000     -     9,000  
Net loss   -     -     -     (53,602 )   (53,602 )
Balance, April 30, 2009   52,000,000     520     767,615     (137,777 )   630,358  
Donated services and rent   -     -     9,000     -     9,000  
Net loss   -     -     -     (704,269 )   (704,269 )
Balance, April 30, 2010   52,000,000     520     776,615     (842,046 )   (64,911 )
Donated services and rent   -     -     9,000     -     9,000  
Net loss   -     -     -     (49,296 )   (49,296 )
Balance, April 30, 2011   52,000,000     520     785,615     (891,342 )   (105,207 )
Unaudited:                              
Donated services and rent   -     -     2,250     -     2,250  
Net loss   -     -     -     (27,770 )   (27,770 )
Balance, July 31, 2011   52,000,000    $ 520   $  787,865   $ (919,112 ) $  (130,727 )

See notes to financial statements.
F-3



RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)
 

                during the  
                development  
                stage (March  
    Three     Three     14, 2006 to  
    months ended     months ended     July 31,  
    July 31, 2011     July 31, 2010     2011)
Cash Flows from Operating Activities                  
 Net loss $  (27,770 $ (5,886 ) $ (919,112 )
Adjustments to reconcile net loss to net cash used for operating activities:            
     Impairment of investment in Beijing RainEarth   -     -     604,756  
     Amortization of investment in Beijing RainEarth   -     -     35,244  
     Impairment of mineral claim acquisition costs   -     -     3,062  
     Donated services   1,500     1,500     32,250  
     Donated rent   750     750     16,125  
 Changes in operating assets and liabilities                  
     Accounts payable and accrued liabilities   24,791     3,600     84,323  
Net cash provided by (used for) operating activities   (729 )   (36 )   (143,352 )
Cash Flows from Investing Activities                  
 Mineral claim acquisition costs incurred   -     -     (3,062 )
Net cash provided by (used for) investing activities   -     -     (3,062 )
Cash Flows from Financing Activities                  
  Loans from related party   889     -     46,910  
  Proceeds from sales of common stock   -     -     100,010  
Net cash provided by (used for) financing activities   889     -     146,920  
                   
Increase (decrease) in cash   160     (36 )   506  
                   
Cash, beginning of period   346     11,285     -  
Cash, end of period $  506   $ 11,249   $ 506  
                   
                   
Supplemental disclosures of cash flow information:                  
 Interest paid $  -   $ -   $ -  
 Income taxes paid $  -   $ -   $ -  
Non-Cash investing and financing activities:                  
 Issuance of common stock in connection with                  
 investment in Beijing RainEarth $  -   $ -   $ 640,000  

See notes to financial statements.
F-4


RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2011
(Unaudited)

Note 1.

Organization and Business Operations

 

RainEarth Inc. (the “Company”) was incorporated in the State of Nevada on March 14, 2006 under the name of Gold Rock Resources Inc. In April 2006 (see Note 4), the Company acquired a mineral claim in British Columbia, Canada; the claim was forfeited April 19, 2009. On March 25, 2009 (see Note 5), the Company entered into a Business Cooperation Agreement with Beijing RainEarth Technology Co. Ltd. (“Beijing RainEarth”) to jointly conduct a Hollow Fiber Membrane Materials application and manufacturing business. On March 27, 2009, the Company changed its name to RainEarth Inc. In August 2010 (see note 5), the Business Cooperation Agreement was terminated.

 

On July 11, 2008, the Company effected a 10 for 1 forward stock split of its common stock, thereby increasing the number of issued and outstanding common shares from 2,000,000 shares to 20,000,000 shares and the number of authorized common and preferred shares from 100,000,000 shares to 1,000,000,000 shares. The financial statements have been retroactively adjusted to reflect this stock split.

 

The financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. At July 31, 2011, the Company had cash of $506 and negative working capital of $130,727. For the three months ended July 31, 2011 and 2010, the Company had net losses of $27,770 and $5,886, respectively. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. The Company plans to raise additional capital and achieve profitable operations through future business ventures. However, there is no assurance that the Company will accomplish these objectives. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Note 2.

Interim Financial Statements

 

The unaudited financial statements as of July 31, 2011 and for the three months ended July 31, 2011 and 2010 and for the period March 14, 2006 (inception) to July 31, 2011 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of July 31, 2011 and the results of operations and cash flows for the periods ended July 31, 2011 and 2010. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended July 31, 2011 is not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending April 30, 2012. The balance sheet at April 30, 2011 has been derived from the audited financial statements at that date.

F-5


RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2011
(Unaudited)

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended April 30, 2011 as included in our report on Form 10-K filed July 29, 2011.

 

Note 3.

Related Party Balances/Transactions

 

a) During the three months ended July 31, 2011 and 2010, the Company recognized a total of $1,500 for donated services at $500 per month and $750 for donated rent at $250 per month provided by the President of the Company at no cost.

 

 

b) At July 31, 2011, the Company is indebted to a current director for $1,889 and to a former director of the Company for $45,021, which obligations are non-interest bearing, unsecured and due on demand.

 

Note 4.

Mineral Claim

 

In April 2006, the Company, through its former President and director, acquired 100% of the rights, title and interest in a mining claim representing 14 contiguous cells and covering an area of 725 acres. The property is situated on the eastern-flank of the Summers Creek Valley. It lies about the Rampart Lake road approximately 11 miles due north of the Town of Princeton (formerly known as Vermillion Forks), British Columbia, Canada. Payment of $3,062 was required to record this mining claim and was paid on April 7, 2006. The claim was registered in the name of the former President of the Company, who agreed to hold the claim in trust on behalf of the Company. On April 19, 2009, the claim was forfeited due to non payment of renewal fees.

 

Note 5.

Investment in Beijing RainEarth

 

On March 25, 2009, the Company entered into a Business Cooperation Agreement (the “Agreement”) with Beijing RainEarth to jointly conduct a Hollow Fiber Membrane Materials application and manufacturing business. The Agreement provided for the Company to provide marketing and consulting services to Beijing RainEarth and to take actions to raise up to $20,000,000 for Beijing RainEarth. The Agreement also provided for the payment of consulting services fees to the Company equal to 60% of Beijing RainEarth’s quarterly revenues after deduction of direct operating costs, expenses and taxes. The term of the Agreement was 20 years. Pursuant to the Agreement, the Company issued 32,000,000 newly issued shares of its Common Stock (representing approximately 61.5% of the 52,000,000 issued and outstanding shares after the issuance) to a designated party of Beijing RainEarth.

F-6


RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2011
(Unaudited)

Beijing RainEarth was incorporated in Beijing China in March 2006. According to unaudited financial statements provided the Company, Beijing RainEarth had assets of 4,165,486 Renminbi (“RMB”) (approximately $610,077), liabilities of 74,763 RMB (approximately $10,950), and stockholders’ equity of 4,090,723 RMB (approximately $599,127) at January 31, 2010 and for the nine months ended January 31, 2010, had sales of 5,700,000 RMB (approximately $834,794) and a net loss of 425,592 RMB (approximately $62,330).

 

For the period March 14, 2006 (inception) to April 30, 2011, the Company did not receive or accrue any consulting services fees from Beijing RainEarth.

 

In the three months ended April 30, 2010, the Company and Beijing RainEarth verbally agreed to terminate the Business Cooperation Agreement. As a result, the Company wrote off the remaining $604,756 unamortized balance of its investment in Beijing RainEarth at April 30, 2010 and recognized an impairment charge of $604,756 in operations for the three months ended April 30, 2010.

 

In August 2010, the Company and Beijing RainEarth executed a termination of Agreement whereby the Business Cooperation Agreement was terminated in writing.

 

Note 6.

Preferred Stock - Terms and Conditions

 

The preferred stock may be divided into, and issued, in series. The Board of Directors of the Company is authorized to divide the authorized shares of preferred stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. The Board of Directors of the Company is authorized, within any limitations prescribed by law and this Article, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including but not limited to the following:

 

a) The rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends shall accrue;

 

b) Whether shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption;

F-7


RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2011
(Unaudited)

c) The amount payable upon shares in the event of voluntary or involuntary liquidation;

d) Sinking fund or other provisions, if any, for the redemption or purchase of shares;

e) The terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion;

f) Voting powers, if any, provided that if any of the preferred stock or series thereof shall have voting rights, such preferred stock or series shall vote only on a share for share basis with the common stock on any matter, including but not limited to the election of directors, for which such preferred stock or series has such rights; and,

g) Subject to the foregoing, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares or such series as the Board of Directors of the Company may, at the time so acting, lawfully fix and determine under the laws of the State of Nevada.

The Company shall not declare, pay or set apart for payment any dividend or other distribution (unless payable solely in shares of common stock or other class of stock junior to the preferred stock as to dividends or upon liquidation) in respect of common stock, or other class of stock junior to the preferred stock, nor shall it redeem, purchase or otherwise acquire for consideration shares of any of the foregoing, unless dividends, if any, payable to holders of preferred stock for the current period (and in the case of cumulative dividends, if any, for all past periods) have been paid, are being paid or have been set aside for payments. In the event of the liquidation of the Company, holders of preferred stock shall be entitled to receive, before any payment or distribution on the common stock or any other class of stock junior to the preferred stock upon liquidation, a distribution per share in the amount of the liquidation preference, if any, fixed or determined in accordance with the terms of such preferred stock plus, if so provided in such terms, an amount per share equal to accumulated and unpaid dividends in respect of such preferred stock (whether or not earned or declared) to the date of such distribution.

Neither the sale, lease or exchange of all or substantially all of the property and assets of the Company, nor any consolidation or merger of the Company, shall be deemed to be a liquidation for the purposes of these terms and conditions.

Note 7. Public Offering
   

On February 1, 2007, the Securities and Exchange Commission declared effective the Company’s Form SB-2 Registration Statement relating to a public offering of up to 20,000,000 shares of common stock at $0.01 per share, or $200,000 total. On October 26, 2007, the Company completed its public offering. A total of 10,000,000 shares of common stock were sold, resulting in gross proceeds to the Company of $100,000.

F-8


RainEarth Inc. (formerly Gold Rock Resources Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2011
(Unaudited)

Note 8.

 Income Taxes

 

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. At July 31, 2011, the Company had a net operating loss carryforward of $230,737, which expires $18,050 in 2026, $21,490 in 2027, $25,510 in 2028, $41,358 in 2029, $58,513 in 2030, $40,296 in 2031 and $25,520 in 2032. Pursuant to Accounting Standards Codification (“ASC”) 740, “Income Taxes”, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of the net operating loss carryforward have not been recognized in these financial statements because the Company has not determined it to be more likely than not that it will utilize the net operating loss carryforward in future years. At July 31, 2011, the valuation allowance established against the deferred tax asset is $78,451.

 

The components of the net deferred tax asset and the amount of the valuation allowance are scheduled below:


    July 31,     April 30,  
    2011     2011  
             
Net Losses From Inception $ 919,112   $  891,342  
             
Less donated rent and services   (48,375 )   (46,125 )
             
Less amortization and impairment of investment in Beijing   (640,000 )   (640,000 )
             
Net operating loss carryforward for tax purposes   230,737     205,217  
             
Statutory Tax Rate   34%     34%  
             
Deffered Tax Asset at 34%   78,451     69,774  
             
Valuation Allowance   (78,451 )   (69,774 )
             
Net Deffered Tax Asset $ -   $  -  

Current United States income tax laws limit the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

F-9


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD - LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE FORWARD - LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD - LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

Overview of the Company's Business

We are a development stage Corporation and have not yet generated or realized any revenues from our business operations.

In April 2006, Shu-heng Wang, our former president acquired one mining claim containing fourteen cells in British Columbia, Canada (Property) by arranging the registration of the same through James W. McLeod, a geologist, a non affiliated third party. A claim is a grant from the Crown of the available land within the cells to the holder to remove and sell minerals. A cell is an area which appears electronically on the British Columbia Internet Minerals Titles Online Grid. The online grid is the geographical basis for the cell. Mr. McLeod is a self-employed contract staker, field worker and professional geologist residing in British Columbia.

Our exploration target was to find an ore body containing gold. Our success depended upon finding mineralized material. Mineralized material is a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. This includes a determination by our consultant if the property contains reserves.

4


As a continuation of the exploration program, Sookochoff Consultants Inc. completed a prospecting on the Property in November 2008. The purpose of the prospecting program was to locate any indications of copper or gold mineralization or coal bearing horizons with the rocks that are indicated to outcrop on the Property. In this prospecting program, adequate coverage of the property was made to locate outcrop or float material which could have provided indications of copper or gold mineralization and/or coal bearing sediments.

Unfortunately, in the few outcrops found and examined in the northeast, the basalts were fresh with no mineralization or alteration. As a result of this prospecting program, the Property did not warrant any additional exploration and/or expenditures and the claim was allowed to expire in April 2009.

Based on the recommendation from the geologist consultant, the Company started to look for other business opportunities. On March 25, 2009, the Company and Beijing RainEarth Technology Co. Ltd., a company organized and existing under the laws of the People's Republic of China (“China RainEarth”), entered into a Business Cooperation Agreement (the “Agreement”) for a term of twenty years. The purpose of the Agreement was to jointly conduct Hollow Fiber Membrane Materials’ application and manufacturing business in China.

The Company was to provide Advice and assistance relating to development of marketing and provision of consultancy services, particularly as related to the Business to China RainEarth, and take such action as may be reasonably required to raise up to $20,000,000 for China RainEarth's financial obligations.

China RainEarth retained the services of the Company in relation to the current and proposed operations of China RainEarth’s business in the People’s Republic of China. China RainEarth was to give 60% of its revenue after deduction of direct operating costs, expenses and taxes to the Company in consideration of the Company’s services.

On May 27, 2009 the Company changed its name to RainEarth Inc. to better reflect its then business. In August 2010, the Business Cooperation Agreement was terminated.

We have been issued a going concern opinion and rely upon the sale of our securities and loans from our officers and directors to fund operations.

We may not have enough money to complete our business plan. If it turns out that we have not raised enough money to complete our business plan, we will try to raise additional funds from a second public offering, a private placement or loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. In we need additional money and can not raise it, we will have to suspend or cease operations.

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Employee and Employment Agreements

We do not intend to hire additional employees at this time. Some work will be conducted by independent contractors that we will hire from time to time.

Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to price and cost increases in services.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our activities. Equity financing could result in additional dilution to existing shareholders.

Results of Operations

For the Three Months ended July 31, 2011

Operating Revenues. Operating revenues for the three months ended July 31, 2011 and 2010 were both $0.

Operating Expenses. The Company's operating expenses totaled $27,770 for the quarter ended July 31, 2011, compared to $5,886 for the same quarter of 2010. The change was mainly caused by an increase in professional fees.

Net Loss. The Company has recorded a loss of $27,770 for the quarter ended July 31, 2011, compared to a loss of $5,886 for 2010. The difference was caused mainly by an increase in professional fees.

Liquidity and Capital Resources

As of the date of this quarterly report, we have yet to generate any revenues from our business activities.

Cash balances as of July 31, 2011 and April 30, 2011 were $506 and $346, respectively.

Net cash used for operating activities for the three months ended July 31, 2011 and 2010 was $729 and $36, respectively.

Net cash provided by financing activities for the three months ended July 31, 2011 and 2010 was $889 and $0, respectively.

As of July 31, 2011, our total assets were $506 and total liabilities were $131,233.

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Off Balance Sheet Arrangements

We do not have any obligations that meet the definition of an off-balance-sheet arrangement that have or are reasonably likely to have a material effect on our financial statements, which has not been consolidated.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available for such items. The Company revises the recorded estimates when better information is available, facts change or actual amounts can be determined. These revisions can affect operating results.

ITEM 3    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 4.    CONTROLS AND PROCEDURES

Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, have concluded that, based on the evaluation of these controls and procedures, that our disclosure controls and procedures were effective.

There were no changes in our internal controls or in other factors during the period covered by this report that have materially affected, or are likely to materially affect the Company's internal control over financial reporting.

ITEM 4A. INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None.

ITEM 1A- RISK FACTORS

There were no material changes to Risk Factors disclosed in this Form 10-Q for the quarter ended July 31, 2011.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS

Exhibit No. Document Description
   
31.1

Certification of Principal Executive Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.

 

31.2

Certification of Principal Financial Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.

 

32.1

Certification of Chief Executive Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002.

 

32.2

Certification of Chief Financial Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Of The Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 14th day of September, 2011.

RainEarth Inc.
(the "Registrant")

  BY: /s/ YongFu Zhu
    YongFu Zhu, President, Principal Executive
    Officer
     
  BY: /s/ TianHui Yin
    TianHui Yin, Secretary, Treasurer, Principal
    Financial Officer and Principal Accounting
    Officer

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