Digatrade Financial 6K Unaudited Interim Consolidated Financial Statements | DIGAF 5 Aug 10

Rainchief Energy Inc.

June 30, 2010
(Expressed in Canadian Dollars)

Unaudited Interim Consolidated Financial Statements

	Page
Notice of No Auditor Review of Interim Consolidated Financial Statements	2
Unaudited Consolidated Balance Sheets	3
Unaudited Consolidated Statements of Operations and Deficit	4
Unaudited Consolidated Statements of Comprehensive Loss	5
Unaudited Consolidated Statements of Cash Flows	6
Notes to the Unaudited Consolidated Financial Statements	7

Notice of No Auditor Review of Interim Consolidated Financial

Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim consolidated financial statements they must be accompanied by a notice indicating that the interim consolidated financial statements have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements of the Company for the three and six months ended June 30, 2010 have been prepared by, and are the responsibility of, the Company’s management.

The Company’s independent auditor has not performed a review of these interim consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim consolidated financial statements by an entity’s auditor.

“Bradley J. Moynes”
Bradley J. Moynes
President and Chief Executive Officer

RAINCHIEF ENERGY INC.

Unaudited Consolidated Balance Sheets

(Expressed in Canadian Dollars)

	June 30,		December 31,
	2010		2009
	$		$
ASSETS
CURRENT
Cash	7,467		(10,986	)
Prepaid expenses	200		-
GST Recoverable	13,406		13,843

	21,073		2,857

Property and Equipment (Note 3)	387		441

	21,460		3,298

LIABILITIES
CURRENT
Accounts Payable and Accrued Liabilities	135,037		179,633
Due to Related Parties (Note 6)	3,000		91,810

	138,037		271,443

SHAREHOLDERS' DEFICIENCY
Share Capital (Note 7(b))	2,521,643		2,241,445
Share Subscription Advance (Note 7(c))	-		5,384
Contributed Surplus	366,788		366,788
Accumulated Other Comprehensive Income	-		-
Deficit	(3,005,008	)	(2,881,762	)

	(116,577	)	(268,145	)

	21,460		3,298

Nature and Continuance of Operations (Note 1)
Subsequent Events (Note 8)

Approved on Behalf of the Board:

“Bradley J. Moynes”		“J. Robert Moynes”
Bradley J. Moynes, Director		J. Robert Moynes, Director

The accompanying notes are an integral part of these interim consolidated financial statements

RAINCHIEF ENERGY INC.

Unaudited Consolidated Statements of Operations and Deficit

(Expressed in Canadian Dollars)

	Three months ended June 30,			Six months ended June 30,
	2010	2009		2010	2009
	$	$		$	$

SALES	-	2,260		-	2,454
COST OF SALES	-	679		-	890

GROSS PROFIT	-	1,581		-	1,564

EXPENSES
Accounting, Audit and Legal	25,285	42,887		38,429	57,412
Advertising and Promotion	-	4,916		-	2,841
Amortization	27	63		54	127
Consulting	71,177	40,475		70,206	40,475
Filing and Transfer Agent Fees	8,307	1,516		11,968	1,833
Interest and Bank Charges	-	976		18	1,502
Management Fees (Note 6)	-	35,085		-	72,348
Office and Telephone	970	3,738		970	6,119
Office and Warehouse Rent	400	3,672		400	7,554
Travel and Automobile	-	1,351		-	1,484
Inventory adjustments	-	650		-	650
Investor relations expense	-	75,976		-	75,976
Stock based compensation	-	197,297		-	197,297

	106,166	408,575		122,045	465,618

LOSS BEFORE OTHER ITEMS	106,166	406,994		122,045	464,054
Foreign Exchange (Gain)Loss	1,110	(4,331	)	1,201	(3,580	)
Contingent Loss on Legal Claim (Note 5)					55,682

NET LOSS FOR THE PERIOD	107,276	402,663		123,246	523,316
Deficit, Beginning of the Period	2,897,732	2,522,390		2,881,762	2,401,737

DEFICIT, END OF THE PERIOD	3,005,008	2,925,053		3,005,008	2,925,053

WEIGHTED AVERAGE NUMBER OF SHARESOUTSTANDING (Note 4(b)(i))	8,315,455	2,362,414		8,315,455	2,362,414

BASIC AND DILUTED LOSS PER SHARE	0.01	0.17		0.01	0.22

The accompanying notes are an integral part of these interim consolidated financial statements

RAINCHIEF ENERGY INC.

Unaudited Consolidated Statements of Comprehensive Loss

(Expressed in Canadian Dollars)

	Three months ended June 30,		Six months ended June 30,
	2010	2009	2010	2009
	$	$	$	$
NET LOSS FOR THE PERIOD	107,276	402,663	123,246	523,316
Other Comprehensive Income for the Period	-	-	-	-
COMPREHENSIVE LOSS FOR THE PERIOD	107,276	402,663	123,246	523,316

The accompanying notes are an integral part of these interim consolidated financial statements

RAINCHIEF ENERGY INC.

Unaudited Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

	Three months ended June 30,				Six months ended June 30,
	2010		2009		2010		2009
	$		$		$		$
CASH PROVIDED BY (USED IN):

OPERATING ACTIVITIES
Net Loss for the Year	(107,276	)	(402,663	)	(123,246	)	(523,316	)
Non-Cash Items
Amortization	27		63		54		128
Stock based compensation	-		197,296		-		197,296
Investor relations expense	-		17,538		-		17,538
Consulting expense	-		65,766		-		65,766
Changes in Non-Cash Working Capital Accounts
Accounts Receivable	-		(2,664	)	-		8,013
GST Recoverable	777		(7,936	)	437		(7,978	)
Prepaid expenses	(200	)	-		(200	)	-
Inventory	-		(1,329	)	-		1,540
Accounts Payable and Accrued Liabilities	(65,964	)	(46,026	)	(44,596	)	28,817

	(172,636	)	(177,297	)	(167,551	)	(212,196	)

FINANCING ACTIVITIES
Share Subscriptions Received	(22,423	)	(2,486	)	-		-
Share capital	183,004		167,664		183,004		167,664
Advances from Related Parties	(2,900	)	12,400		3,000		42,271

	157,681		177,578		186,004		209,935


INCRESE (DECREASE) IN CASH	(14,955	)	281		18,453		(2,261	)

Bank Indebtedness, Beginning of the Period	22,422		(1,979	)	(10,986	)	563

CASH (BANK INDEBTEDNESS), END OF THEPERIOD	7,467		(1,698	)	7,467		(1,698	)

SUPPLEMENTAL CASH FLOW INFORMATION
Interest Paid	-		94		-		265

The accompanying notes are an integral part of these interim consolidated financial statements

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 1 – NATURE AND CONTINUANCE OF OPERATIONS

Rainchief Energy Inc. (the “Company”) was incorporated on December 28, 2000 under the Company Act of the Province of British Columbia, Canada. The Company changed its name from Black Diamond Brands Corporation to Rainchief Energy Inc. on November 21, 2008. The Company has no active operations and is currently analyzing project opportunities.

The Company carried on its oil and gas exploration, and wine and spirit distribution operations through its wholly-owned subsidiaries. During the year ended December 31, 2009, the Company disposed of its interests in these subsidiaries.

While these consolidated financial statements have been prepared on the assumption that the Company is a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business, certain events and conditions cast substantial doubt on this assumption. The Company continues to incur significant operating losses and has no current source of revenue. As at June 30, 2010, the Company has a consolidated deficit of $3,005,008 and a working capital deficiency of $116,964.

The Company’s ability to continue operations is uncertain and is dependent upon generating profitable operating, maintaining current financing obligations and obtaining new sources of financing. The outcome of these matters cannot be predicted at this time. Although the Company has arranged private placements of units raising gross proceeds of US$182,200 in 2010 (Note 7(b) and Note 8) and has been successful in obtaining financing in the past, there is no assurance that the Company will be successful with future financing ventures in light of the current economic climate.

These unaudited interim consolidated financial statements do not reflect any adjustments to the amounts and classifications of assets and liabilities, which would be necessary should the Company be unable to continue operations.

These unaudited interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and follow the same accounting policies and principles as disclosed in the Company’s most recent audited annual financial statements. Accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2009.

Certain items in the prior periods’ financial statements have been reclassified to conform to the financial statement presentation adopted in the current period. Such reclassifications are for presentation purposes only and have no effect on prior periods’ net loss and deficit.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Future Accounting Change–International Financial Reporting Standards (“IFRS”)

In February 2008, the CICA announced that Canadian GAAP for publicly accountable enterprises will be replaced by IFRS for fiscal years beginning on or after January 01, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal year. Accordingly, the conversion from Canadian GAAP to IFRS will be applicable to the Company’s reporting for the first quarter ended March 31, 2011, with restatement of comparative information presented. The financial reporting impact of the transition to IFRS on the Company’s consolidated financial statements cannot be reasonably estimated at this time.

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 3 – PROPERTY AND EQUIPMENT

		Accumulated	Net Book
	Cost	Amortization	Value
	$	$	$
June 30, 2010
Computer Equipment	3,890	3,728	162
Furniture and Equipment	1,656	1,431	225

	5,546	5,159	387

		Accumulated	Net Book
	Cost	Amortization	Value
	$	$	$
December 31, 2009
Computer Equipment	3,890	3,699	191
Furniture and Equipment	1,656	1,406	250

	5,546	5,105	441

NOTE 4 – SHARE CAPITAL

a)	Authorized Capital

	Unlimited number of common shares without par value.

b)	Issued and Outstanding Common Shares

	Number of		Amount
	Common Shares		$

Balance, December 31, 2009	27,838,852		2,241,445

Consolidation of the Company’s share capital (i)	(25,044,944	)	-
Post consolidation shares issued pursuant to a subscription agreement received before the consolidation (ii)	50,000		5,384

Balance, March 31, 2010	2,843,908		2,246,829

Post consolidation shares issued for settlement of debt (iii)	15,000,000		91,810
Post consolidation shares issued pursuant to a subscription agreement (iv)	9,110,000		183,004

Balance, June 30, 2010	26,953,908		2,521,643

	(i)	On March 22, 2010, the Company consolidated its share capital in the ratio of 1 new common share for 10 common shares held. Prior periods presented have been retroactively adjusted to reflect this consolidation.

	(ii)	On March 22, 2010, the Company issued 50,000 post-consolidation common shares at a price of US$0.10 per share. The gross proceeds of $5,384 (US$5,000) were received by the Company during the year ended December 31, 2009.

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 4 – SHARE CAPITAL (continued)

	(iii)	On May 19, 2010, pursuant to an agreement dated March 25, 2010, whereby certain related parties assigned debts owed by the Company to them totaling US$97,710 to other arm’s length parties (“Assigned Creditors”) for a nominal consideration of $10, the Company issued 15,000,000 post- consolidation common shares of the Company at a price of US$0.006514 per share in settlement of these debts.

	(iv)	On May 21, 2010 the Company completed a private placement of 9,110,000 units, raising gross proceeds of $183,004 (US$182,000) at US$0.02 per unit. One unit comprises of one post- consolidation common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.02 per share for a period of one year

c)	Share Purchase Warrants

	The Company has the following warrants outstanding which expire on various dates between April 30, 2010 and June 30, 2014:

			Weighted Average
	Number of		Exercise Price
	Warrants		US$
Balance, December 31, 2009	7,220,000		0.09
Reduction In share warrants following consolidation of the Company’s share capital (Note 4(b)(i)	(6,498,000	)	-
Balance, March 22, 2010	722,000		0.91
Issued During the Period
Private Placement (Note 4(b)(ii))	50,000		1.00
Expired During the Period	(58,000	)	1.00
Balance, March 31, 2010	714,000		0.91
Issued During the Period
Private Placement (Note 4(b)(iv))	9,110,000		0.02
Expired During the Period	(339,000	)	1.00
Balance, June 30, 2010	9,485,000		0.22

NOTE 5 – LEGAL CLAIM

In March 2009, the Company was served a Notice of Termination of the licensing agreement citing breach by the Company of a licensing agreement relating to the Company’s use of certain photographs belonging to the copyright owner. The total amount of claim against the Company was US$50,625 (C$53,607). The company recorded a contingent liability for this amount as at March 31, 2009.In December 2009 the copyright holder filed a claim in the Supreme Court of British Columbia in the amount of $60,750. As at December 31, 2009, the Company has recorded a provision of $60,750 for this contingent liability.

The outcome of the legal claim is uncertain, and management is of the opinion that the claim has no merit.

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 6 – COMMITMENTS

On April 1, 2010, the Company entered into a contract with a shareholder for the provision of general consulting services for a period of six months at a cost of $3,000 per month. Upon the expiry of the initial term, the contract will be extended on a month to month basis until cancelled by either party.

NOTE 7 – RELATED PARTIES TRANSACTIONS

In addition to those transactions disclosed elsewhere in these consolidated financial statements, the Company has the following related party balances and transactions.

Balances due (to) related parties are unsecured, non-interest bearing and have no specific terms of repayment. The Company had the following amounts due (to) related parties as at June 30, 2010 and December 31, 2009:

	June 30,		December 31,
	2010		2009
	$		$
Due (to) a shareholder	(3,000	)	-
Due (to) from Directors and Officers	-		(81,896	)
Due to Companies with Common Directors and Officers	-		(4,414	)
Due to a Person Related to the Directors and Officers	-		(5,500	)

	(3,000	)	(91,810	)

The Company had the following transactions with related parties for the three and six month periods ended June 30, 2010 and 2009:

	Three months ended June 30,		Six months ended June 30,
	2010	2009	2010	2009
	$	$	$	$

Consulting fees charged by an Officer of the Company	5,900	-	64,621	-
Consulting fees charged by an shareholder of the Company	12,457	-	12,457	-
Management fees charged by Officers of the Company for management, administration, supervision and company development services	-	35,058	-	72,348

	18,357	35,058	77,078	72,348

All related party transactions were in the normal course of operations and were measured at the exchange value, which represented the fair value established and agreed to by the related parties.

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 8 – SEGMENTED INFORMATION

Prior to the sale of its operating subsidiaries in 2009, the Company had operations in two business segments: oil and gas exploration in the Province of Alberta, Canada, and wine and spirit distribution in the Province of British Columbia, Canada and the United States.

			Oil and Gas		Wine and Spirit
	Total		Exploration		Distribution		Corporate
Three months
ended June 30,	2010	2009	2010	2009	2010	2009	2010	2009
	$	$	$	$	$	$	$	$
Sales	-	2,260	-	-	-	2,260	-	-

Gross Profit (Loss)	-	1,581	-	-	-	1,581	-	-

Amortization	27	63	-	-	-	27	27	36

Capital Expenditures	-	-	-	-	-	-	-	-

			Oil and Gas		Wine and Spirit
	Total		Exploration		Distribution		Corporate
Six months ended
June 30,	2010	2009	2010	2009	2010	2009	2010	2009
	$	$	$	$	$	$	$	$
Sales	-	2,454	-	-	-	2,454	-	-

Gross Profit (Loss)	-	1,564	-	-	-	1,564	-	-

Amortization	54	127	-	-	-	55	54	72

Total Assets	-	73,878	-	-	-	-	-	73,878

Capital Expenditures	-	-	-	-	-	-	-	-

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 9 – FINANCIAL INSTRUMENTS

The Company’s financial instruments are exposed to certain financial risks:

a)	Fair Values

	The carrying values of cash, bank indebtedness, accounts receivable, accounts payable and accrued liabilities, and amounts due to and from related parties approximate their fair value as at the balance sheet date.

b)	Liquidity Risk

	Liquidity risk refers to the risk that an entity will encounter difficulty meeting obligations associated with financial liabilities. The Company is dependent upon on the availability of credit from its suppliers and its ability to generate sufficient funds from equity and debt financing to meet current and future obligations. There can be no assurance that such financing will be available on terms acceptable to the Company.

c)	Credit Risks

	Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. Management considers that risks related to credit are not significant to the Company at this time.

d)	Interest rate risk

	Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Management considers that risks related to interest are not significant to the Company at this time. Amounts owed from and to related parties are non-interest bearing.

e)	Foreign Exchange Risk

	The Company operates in Canada and the United States and some of its material expenditures are payable in U.S. dollars. The Company is therefore subject to currency exchange risk arising from the degree of volatility of changes in exchange rates between the Canadian dollar and the U.S. dollar. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.

	As at June 30, 2010, the Company had the following financial instruments in U.S. dollars:

	US$
Cash	6,883
Accounts Payable and Accrued Liabilities	(32,633	)
	(25,750	)

RAINCHIEF ENERGY INC.

Notes to the Unaudited Interim Consolidated Financial Statements

June 30, 2010

(Expressed in Canadian Dollars)

NOTE 10 – CAPITAL MANAGEMENT

The Company’s objective for managing its capital structure is to safeguard the Company’s ability to continue as a going concern and to ensure it has the financial capacity, liquidity and flexibility to fund its on-going operations and capital expenditures including investment in resource properties it has or may acquire.

The Company manages its share capital as capital, which as at June 30, 2010 totalled $2,521,643 (December 31, 2009 - $2,241,445). At this time the Company’s access to the debt market is limited and it relies on equity issuances and the support of shareholders to fund its investments in capital assets and resource properties. The Company monitors capital to maintain a sufficient working capital position to fund annualized administrative expenses and capital investments.

As at June 30, 2010 the Company had a working capital deficiency of $116,964. The Company will issue shares and may from time to time adjust its capital spending to maintain or adjust the capital structure. There can be no assurance that the Company will be able to obtain debt or equity capital in the case of operating cash deficits.

The Company’s share capital is not subject to external restrictions. The Company has not paid or declared any dividends since the date of incorporation, nor are any contemplated in the foreseeable future. There were no changes in the Company’s approach to capital management during the period ended June 30, 2010.

Digatrade Financial (DIGAF) 6-KUnaudited Interim Consolidated Financial Statements