U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

(Mark One)

      [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934.

For the fiscal year ended                                December 31, 2005

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934.

Commission file number                                  002-41703

                            THE X-CHANGE CORPORATION
                 (Name of Small Business Issuer in Its Charter)

                Nevada                                    90-0156146
---------------------------------------      -----------------------------------
(State of Incorporation or Organization)    (I.R.S. Employer Identification No.)
                               710 Century Parkway
                                Allen, TX 75013
               (Address of principal executive offices)(Zip Code)


                                 (972) 747-0051
                (Issuer's telephone number, including area code)

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                          COMMON STOCK, $.001 PAR VALUE
                                 Title of Class

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  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.
[X] YES [ ] NO

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

State issuer's revenues for its most recent fiscal year:  $567,238

As of March 31, 2006, there were approximately 27,222,000 shares of Common Stock
outstanding,  of which  20,522,000  were held by  non-affiliates.  The aggregate
market value of Common  Stock  (based upon the closing  price on March 31, 2006)
held by non-affiliates was approximately $8,208,800.

Documents incorporated by reference:  None.

Transitional Small Business Disclosure Format (check one): [ ] YES [X] NO


<PAGE>




                            THE X-CHANGE CORPORATION
                                   FORM 10-KSB
                                TABLE OF CONTENTS

                                                                            PAGE
                                     PART I

ITEM     1.       Description of Business..................................... 3

ITEM  2. Description of Property.............................................. 5

ITEM  3. Legal Proceedings.................................................... 5

ITEM  4. Submission of Matters to a Vote of Security Holders.................. 5

                                     PART II

ITEM  5. Market for Common Equity and Related Stockholder Matters............. 5

ITEM  6.          Management's Discussion and Analysis or Plan of Operation... 7

ITEM  7. Financial Statements................................................. 7

ITEM  8. Changes in and Disagreements With Accountants on Accounting
                   and Financial Disclosure................................... 8

ITEM  8a.         Controls and Procedures..................................... 8

ITEM  8b.         Other Information   ........................................ 8

                                    PART III

ITEM  9. Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16 (a) of the Exchange Act.......... 8

ITEM  10.         Executive Compensation......................................10

ITEM  11. Security Ownership of Certain Beneficial Owners and Management......10

ITEM 12. Certain Relationships and Related Transactions.......................11

ITEM 13. Exhibits and Reports on Form 8-K.....................................11

ITEM 14. Principal Accountant Fees and Services ..............................12




                                       2
<PAGE>



RISK FACTORS AND CAUTIONARY STATEMENTS

Forward-looking statements in this report are made pursuant to the "safe harbor"
provisions of the Private Securities  Litigation Reform Act of 1933, as amended.
The  Company   wishes  to  inform   readers  that  actual   results  may  differ
substantially from such forward-looking  statements.  Forward-looking statements
include statements concerning  underlying  assumptions and other statements that
are other than statements of historical fact. For example,  words such as "may,"
"will," "should," "estimates,"  "predicts," "potential," "continue," "strategy,"
"believes," "anticipates," "plans," "expects," "intends" and similar expressions
are intended to identify forward-looking statements.  Forward-looking statements
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those expressed or implied by the statements, including, but not
limited  to,  the  following:  the  ability of the  Company  to provide  for its
obligations,  to provide for its working capital needs from operating  revenues,
to obtain additional financing, to meet competitive challenges and technological
changes  and other risks as may be detailed  in the  Company's  periodic  report
filings with the Securities and Exchange Commission.

ITEM 1   DESCRIPTION OF BUSINESS

ORGANIZATION  AND HISTORY:  The Company was  incorporated  under the laws of the
State of Delaware on February 5, 1969,  and changed its domicile to the State of
Nevada on October 4, 2000. The company was  originally  organized to seek merger
and/or  acquisition  candidates.  In this  respect  the  Company  has engaged in
numerous  transactions  since  inception  and is now  intent on  furthering  the
business interest of the most recent acquisition, AirGATE Technologies, Inc.

The Company,  since  inception,  has had as its principal  business  purpose the
identification of and capitalization on business  opportunities.  In furtherance
of this, the Company has made a number of acquisitions during its existence.

In June 2004, the Company formed a new subsidiary,  OIL ID Systems,  Inc., which
subsequently  acquired 38 wells in east Texas and is headquartered in Allen, TX.
This  subsidiary  subsequently  changed  its  name  to  Curado  Oil &  Gas.  The
principals  involved  in this  subsidiary  have 25  years of  experience  in the
marketing of and exploration for petroleum products and services. On November 1,
2005, substantially all of the assets of Curado were sold to a local oil and gas
producer in order to further the business  development  of AirGATE  Technolgies,
Inc.

On September 30, 2004, the Company entered into a share purchase  agreement with
Kolt Oil and Gas, a Texas Corporation,  to acquire the business,  operations and
prospects  of  Kolt.  Subsequently,  Kolt  was not  able to  deliver  all of the
consideration promised;  therefore, the Company agreed that the only asset which
Kolt would have is a Texas  operator's  license for oil and gas properties.  The
Company issued 150,000 shares of restricted stock in exchange for this asset.

 In September 2004, AirGATE,  which was previous owned by the company,  was sold
to Michael L. Sheriff. At that time, the Company retained a 15% revenue interest
in  projects  that  AirGATE  held at the time.  On July 20,  2005,  the  Company
reacquired AirGATE Technologies, Inc. for 10,000,000 shares of restricted common
stock.

PRESENT BUSINESS MODEL: The Company's business model is now primarily focused on
furthering the success of the wholly owned subsidiary AirGATE Technologies, Inc.
AirGATE  Technologies,  Inc. is an early-stage company and is a leading provider
of wireless solutions utilizing radio frequency  identification (RFID), 802.15.4
(Zigbee)  low  power,  mesh-based  networks  and  SAW  (surface  acoustic  wave)
technologies.  It is expected that these markets will exceed $6 billion  dollars
by 2008 and provide  the  Company  with  upside  potential  as the RFID  markets
continue to mature. AirGATE Technologies,  Inc., a leader in unique applications
utilizing RFID and wireless,  intelligent, sensor technology, is a full-solution
company  that  handles  business  assessment,  technology  selection,  including
proprietary AirGATE technology, and integration and support. The Company has, in
an  environment  of technology  cost  compression,  built a stable of technology
partners  that are best in class and span a wide range of  solutions  to support
small,  medium  and  large  enterprises.  AirGATE  is a  founding  member of the
DFW-based RFID HUB.



                                       3
<PAGE>

The  AirGATE  mission  is  to  provide  customers  with  innovative   technology
solutions,  such as Radio Frequency  Identification (RFID), that are the product
of  inventive  minds  melding  superior  technical  skills with  outside-the-box
thinking and  state-of-the-art  technologies.  AirGATE  builds its portfolios of
products and services around a simple  concept;  provide the customer with truly
exceptional  value and  AirGATE  is assured of an  exceptional  return.  AirGATE
provides customers with solutions tailored to their specific needs; products and
services of unsurpassed  convenience,  performance and  reliability  that are an
uncommon value.  AirGATE's  current  applications  include prison inmate collect
call  verification,  child safety seat buckle  status,  product  authentication,
real-time  location systems,  remote oil and gas well monitoring and proprietary
oil industry solutions.

AirGATE holds several lucrative development  contracts.  These companies include
Hexion Specialty Chemical, Securus Technologies, Inc. and Hitachi America, Ltd.

Based in Columbus,  Ohio, Hexion Specialty  Chemicals combines the former Borden
Chemical,  Bakelite,  Resolution  Performance  Products and Resolution Specialty
Materials  companies into the global leader in thermoset  resins.  Hexion serves
the  global  wood and  industrial  markets  through a broad  range of  thermoset
technologies,  specialty  products  and  technical  support for  customers  in a
diverse range of applications  and  industries.  Hexion  Specialty  Chemicals is
owned by an affiliate  of Apollo  Management,  L.P.  Additional  information  is
available  at  www.hexion.com.  For the year ended  December  31,  2005,  Hexion
Specialty Chemicals posted total revenue of $4.5 Billion.

SECURUS  Technologies is the country's largest independent  supplier of detainee
telecommunications  and  information  management  solutions,  serving over 3,100
correctional   facilities   nationwide.   A   recognized   leader  in  providing
comprehensive,  innovative  technical solutions and responsive customer service,
SECURUS'  sole  focus  is the  specialized  needs  of the  corrections  and  law
enforcement communities. SECURUS is headquartered in Dallas, Texas, with offices
in Selma, Alabama;  Raleigh,  North Carolina;  Brantford,  Ontario;  Belleville,
Ontario,  and has  application  redundancy  backup  systems in Allen,  Texas and
Irving Texas. Please visit: http://www.securustech.net.

Hitachi America, Ltd., a subsidiary of Hitachi, Ltd., markets and manufactures a
broad  range  of  electronics,  computer  systems  and  products,  and  consumer
electronics,  and provides  industrial  equipment and services  throughout North
America. For more information, visit http://www.hitachi.us.

AirGATE's  is  currently  focused on creating  development  contracts  with high
profile  corporations.  The development contracts create immediate cash flow for
the company.  However,  the key to the  long-term  success of the Company is the
built-in  recurring revenue stream.  Each  relationship  establishes a recurring
revenue  stream  whereby  AirGATE  is paid a portion of the  corporate  partners
revenue  stream  generated  utilizing the AirGATE  developed  technologies  upon
commercialization.

AirGATE  currently  has  several  patents  pending  on its  technology  and will
continue to file additional patents to protect its intellectual property.

AirGATE   Technologies'   business   model  is   strengthened   by  several  key
differentiators  that sets it apart from its competition.  AirGATE's focus is to
create long-term shareholder value by: (1) Pursuing intelligent,  opportunistic,
wireless and RFID  applications in vertical  industries that generate  recurring
revenue;  (2) Partnering with other wireless and RFID solution  providers,  both
hardware and software; (3) Partnering with industry organizations,  highlighting
AirGATE's  wireless  solutions;   (4)  Partnering  with  strategic  vendors  and
manufacturers;  and (5) continue building a recognizable  brand identity for the
Company.

The founders of AirGATE  Technologies have over 125 years accumulated  expertise
in Radio Frequency (RF) solutions,  services,  middleware and network management
systems including:

>>       Supply Chain Management
>>       Wireless and RF Engineering
>>       System Integration


                                       4
<PAGE>

>>       Network Management Systems
>>       Enterprise Databases
>>       Microsoft and UNIX Environments

The team has a mix of financial, technical, network, and wireless backgrounds as
well as a strong  emphasis on operations  and marketing  with such  companies as
Northern  Telecom,   Texas  Instruments,   Sprint,   MCI,  Motorola,   ActionFax
International, Inc., and Ericsson. All are seasoned entrepreneurs

ITEM 2   DESCRIPTION OF PROPERTY

The executive offices of the Company, as of the date this report, are located at
710 Century Parkway Allen, TX 75013.  The Company entered into a long-term lease
arrangement  for this space on November 1, 2005.  The  telephone  number at this
address is (972) 747-0051.


ITEM 3   LEGAL PROCEEDINGS

On January 11, 2006, The Company  commenced legal action against former employee
James E. Flowers,  Logix Consulting,  Inc. and WaveTrac,  Inc. As the Plaintiff,
the Company seeks temporary and permanent  injunctive relief and damages against
the  Defendants as a result of their  unlawful and malicious  breach of contract
(violation   of  non   disclosure   provisions);   breach  of  fiduciary   duty,
misappropriation  of trade secrets and other proprietary  information;  tortuous
interference with prospective business relationships; and conversion. As part of
the legal  action,  the Company is demanding  the return of 4,250,000  shares of
restricted common stock issued to Mr. Flowers.

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters  were  subject to a vote of  security  holders  during the year ended
December 31, 2005.


                                     PART II

ITEM 5            MARKET FOR COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS

Principal  Market and Sales Prices for Common Stock: As of March 15, 2006, there
were 27,222,000 shares of Common Stock issued and outstanding which were held of
record by 184 shareholders. Because brokerage firms hold a substantial number of
shares in "street name" on behalf of their  customers,  the Company is unable to
estimate the total number of  stockholders  represented by these record holders.
As of March 15,  2005,  there were no shares of  Preferred  Stock of the Company
issued or outstanding.


The Common  Stock is  currently  quoted on the OTCBB,  under the trading  symbol
"XCHC." The following  table sets forth the range of the high and low bid prices
per  share of the  Common  Stock as  reported  by the NASD  during  the last two
calendar years for the period indicated. Prices reported are based on quotations
between  dealers,  and do not reflect retail mark-up,  mark-down or commissions,
and may not necessarily represent actual transactions.


                                       5
<PAGE>

-----------------------------------------------------------------
                        FISCAL YEAR            FISCAL YEAR

                           2005                    2004
                           ----                    ----
-----------------------------------------------------------------
                     High         Low        High        Low
-----------------------------------------------------------------
 First Quarter       $2.35       $1.26      $0.95       $0.05
-----------------------------------------------------------------
Second Quarter      $2.25.       $0.48      $0.62       $0.31
-----------------------------------------------------------------
 Third Quarter       $0.88       $0.25      $0.39       $0.12
-----------------------------------------------------------------
Fourth Quarter       $0.85       $0.30      $0.22       $0.05
-----------------------------------------------------------------

DIVIDENDS:  The Company has never paid any cash  dividends on its Common  Stock.
The Company  intends to retain and use any future  earnings for the  development
and expansion of its business and does not anticipate  paying any cash dividends
in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES:
On December 31, 2003, certain shareholders contributed back to capital.

On March 15, 2004, the Company acquired  furniture and fixtures  totaling $9,000
for 15,000 shares of common stock. The Company issued these shares on August 12,
2005.

On April 2,  2004,  the  Company  issued  100,000  shares  of  common  stock for
consulting services. The shares were valued at $0.53 per share.

On April 26,  2004,  the  Company's  president  surrendered  his  stock  options
contract for 12,000,000  common shares in exchange for the issuance of 4,000,000
shares of restricted  common stock.  The shares are restricted  for 2 years.  In
connection  with  issuance of the shares,  $15,000  was  recorded as  consulting
expense.

On  September  30, 2004,  the Company  sold 100% of its AirGate,  a wholly owned
subsidiary,  shares in exchange for return of  3,500,000  of its common  shares.
These shares were returned to treasury and subsequently canceled.

On September 30, 2004, the Company entered into a share purchase  agreement with
Kolt  Oil  and  Gas,  a Texas  Corporation,  where  it  acquired  the  business,
operations  and  prospects  of Kolt Oil and Gas for  2,500,000  shares of common
stock.  Subsequently,  the share  purchase  agreement  with Kolt Oil and Gas was
rescinded and the 2,500,000 shares were canceled. On March 11, 2005, the Company
issued 150,000 shares to acquire the business,  operations and prospects of Kolt
Oil and Gas.

On November 23, 2004, the Company issued 1,000,000  shares of restricted  common
stock for consulting services. The shares were valued at $0.001 per share.

On January 11, 2005, the Company issued  1,120,000  shares of restricted  common
stock for  consulting  service.  In connection  with the issuance of the shares,
$84,000 was recorded as consulting expense.

On of March 31, 2005, the Company  issued  100,000  shares of restricted  common
stock to an outside investor for $1.00.

On March 31, 2005, the Company  issued 70,000 shares of restricted  common stock
for consulting services.  In connection with issuance of the shares,  $1,000 was
recorded as consulting expense.

On July  20,  2005,  the  Company  reacquired  AirGATE  Technologies,  Inc.  for
10,000,000 restricted shares of common stock. After the AirGATE acquisition, the
Company  issued  650,000  shares of restricted  common stock to  consultants  of
AirGATE Technologies,  Inc. In connection with issuance of the shares,  $130,000
was recorded as a one time consulting expense.



                                       6
<PAGE>

On November 11,  2005,  the Company  issued  20,000  restricted  common stock to
engineer  employees of the Company.  In connection  with issuance of the shares,
$1,500 was recorded as consulting expense.


On January 5, 2006,  the Company  issued  10,000  restricted  common  stock to a
consultant of the Company

On January 5, 2006,  the Company  issued  500,000  shares of  restricted  common
stock, $.001 par value, to Hexion Specialty Chemical,  Inc. as consideration for
Hexion's expected $219,180 increase in development costs and AirGATE's  expected
$219,180  decrease in  development  costs of the  development  contract  between
Hexion and AirGATE which was finalized in the first week of 2006.


ITEM 6            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------            ---------------------------------------------------------

The  following  discussion  should  be read in  conjunction  with the  Company's
audited  financial  statements and notes thereto which appear  elsewhere in this
report.  In  November  2005,  the Company  sold the  majority of the oil and gas
leases and ceased oil and gas  operations.  The sale of the assets for  $500,000
produced a one-time gain of approximately  $169,000.  The proceeds were utilized
to reduce  certain  liabilities  as well as  create  operating  capital  for the
furtherance of the operations of the Company's wholly owned subsidiary,  AirGATE
Technologies which was reaquired in July of 2005.

As is common with  development  stage  companies,  the Company has had recurring
losses from operations  since  inception and had a deficit at year-end.  Through
current operations, the asset sale, development contracts and shareholder loans,
the company has been able to maintain its operations in an orderly fashion.

PLAN OF  OPERATION:  The  Company's  present  business  model is  focused on the
continued development AirGATE  Technologies'  business model and is strengthened
by several key differentiators  that set it apart from its competition.  AirGATE
Technologies'  focus is to create long-term  shareholder  value by: (1) Pursuing
intelligent,   opportunistic,   wireless  and  RFID   applications  in  vertical
industries that generate recurring  revenue;  (2) Partnering with other wireless
and RFID solution  providers,  both hardware and software;  (3) Partnering  with
industry   organizations,   highlighting   AirGATE's  wireless  solutions;   (4)
Partnering  with  strategic  vendors  and  manufacturers;  and  (5)  Building  a
recognizable brand identity for AirGATE in the RFID arena.


RESULTS OF  OPERATIONS:  The Company had  revenues of 37,439 and 567,238 for the
years ended December 31, 2004 and 2005, respectively. The Company has realized a
net loss from  operations of $495,957  since entering the  development  stage in
Ocrtober 2000.  Since October 4, 2000, the Company has been a development  stage
company and had not begun principal  operations.  Accordingly,  comparisons with
prior periods are not meaningful. The Net Loss for December 31, 2004 was $73,823
while the Net Loss for December 31, 2005 was $364,098. Approximately $216,000 of
one time non cash expenses are included in the loss.

LIQUIDITY AND CAPITAL RESOURCES: During 2005 the Company generated and used cash
through operating activities,  the sale of the oil and gas assets, and financing
activities  As of December  31,  2005,  the  Company  had a net working  capital
deficit of approximately $249,297.



                                       7
<PAGE>

ITEM 7   FINANCIAL STATEMENTS

The financial  statements of the Company as of and for the years ended  December
31, 2005 and December 31, 2004 are included immediately  preceding the signature
page to this  Report.  See Item 13 for a list of the  financial  statements  and
financial statement schedules included.


ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

         None.

ITEM 8A  CONTROLS AND PROCEDURES

We have established  disclosure  controls and procedures to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to the officers who certify the  Company's  financial  reports and to
other members of senior management and the Board of Directors.

Based on their  evaluation,  as of the end of the period  covered by this Annual
Report on Form 10-KSB, the principal  executive officer and principal  financial
officer  of the  X-Change  Corporation  and its  principal  subsidiary,  AirGATE
Technologies,  Inc., have concluded that the X-Change  Corporation's  disclosure
controls and procedures (as defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934) are effective in ensuring that the information
required  to be  disclosed  by the  Company in reports  that it files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.

There were no significant changes in the X-Change Corporation's internal control
over  financial  reporting  during the Company's  fourth fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


ITEM 8B  OTHER INFORMATION

         None.


                                    PART III

ITEM 9 DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT


The  following  table  sets forth all of the  current  directors  and  executive
officers of the Company, including their ages, as of the date of this report.



                                       8
<PAGE>

-------------------------- --------- -------------------------------------------
                    NAME      AGE                 POSITIONS HELD
-------------------------- --------- -------------------------------------------
Michael L. Sheriff             60    President, CEO and Chairman of the Board
-------------------------- --------- -------------------------------------------
Robert Barbee                  35          Vice President of Operations
-------------------------- --------- -------------------------------------------
Scott R. Thompson              43           CFO, Treasurer, Secretary
-------------------------- --------- -------------------------------------------

None of the executive officers,  directors and/or control persons of the Company
have been convicted in or been the subject of any pending criminal  proceedings,
or the subject of any order,  judgment or decree  involving the violation of any
state or federal securities laws.

No current director has any arrangement or  understanding  whereby he is or will
be selected as a director or as an executive  officer.  All directors  will hold
office until the next annual meeting of shareholders  and until their respective
successors  have been duly elected and qualified,  unless and until they earlier
resign or are removed from  office.  The  executive  officers of the Company are
elected by the Board of Directors at its annual  meeting  immediately  following
the annual  meeting of  shareholders.  The Company does not  currently  have any
standing  audit,  nominating  or  compensation  committees,   or  any  committee
performing similar functions.


MICHAEL L.  SHERIFF  joined the Company  immediately  after the  acquisition  of
AirGATE Technologies as Chariman and Chief Executive Officer.

Michael  Sheriff,  president and chief executive  officer,  has over thirty-five
years of experience in the computer and telecommunications industry. In 1998 Mr.
Sheriff  founded Net Access  Exchange,  Inc., dba YPAY.  YPAY was a new Internet
media  network that  provided  advertisers  with a unique and  compelling  value
proposition to reach  consumers via the Internet  through use of  broadband-like
rich  media over  dial-up  connections  - the first  broadband  over  narrowband
advertising and entertainment  network,  providing TV-like  advertising  without
compromising or interfering with the user's Internet connection. YPAY utilized a
patented  message  delivery  system to harness  the power of the  Internet  with
multi-media  and  market-targeting  capabilities  not  available  in  any  other
advertising medium.

In 1995, Mr. Sheriff founded CyberQuest -- a full-service  Internet  development
company -- focusing its efforts on Internet commerce in the business-to-business
marketplaces.  Under Mr. Sheriff's leadership, the company's Internet e-commerce
flagship,  bid4it,  was developed  utilizing a revolutionary new, patent pending
"bid-and-ask"  matching technology.  The site was launched in 1997 as one of the
first commodity  trading Internet  applications.  Mr. Sheriff sold CyberQuest in
October  1998 to a NASD  OTC:BB  listed  company.  He then  served as CEO of the
public  company,  CBQ, Inc., as well as being Chairman of the company's Board of
Directors.

In  1994,  Mr.  Sheriff   founded  and  developed  Good  Stuff  Cheap  (GSC),  a
first-to-market  Internet-based  retail  site.  The company was the first to use
intelligent shopping agents and was featured in Wired Magazine in December 1994,
GSC was also featured on the Discovery Channel in December 1996.

Mr.  Sheriff  is  also  the  former  founder,  President  and  CEO of  ActionFax
International,  Inc. Action Fax operates one of the largest public  fax/Internet
kiosk networks in the world with locations in most world airports.

Prior to ActionFax,  Mr Sheriff was the founder and President of First  National
Computer  Corporation,  which pioneered the rental of personal computers.  Under
his direction, First National Computer became one of the largest PC rental firms
in the United States.

Mr.  Sheriff has held senior sales,  marketing  and  management  positions  with
National Semiconductor, Northern Telecom, SYCOR, Inc. and SINGER.




                                       9
<PAGE>

ROBERT BARBEE holds a Business Degree from Kilgore College, which he obtained in
1992.  He has been  actively  involved in the oil and gas business in East Texas
since 1989. Mr. Barbee has been  Vice-President of Oil Patch Pipe & Supply since
2000.  This entity is an  independent  oil field supply store which has obtained
the  distributorship  for micro  chemical  applications  for down hole well bore
repair.  Mr.  Barbee acted as President of S&B  Resources  from 1991 until 2002,
when he directed the sale of all its assets. S&B was a small, privately-held oil
and gas company which owned and operated its own  production.  From 1992 through
1994 he  directed  LAZ  Financial,  a Russian  company  involved  in oil and gas
natural  resource.  From 1995 through 1998 Mr. Barbee was Operations  Management
for 4-S Operating,  one of the top ten operators in East Texas, where he oversaw
the production of approximately  15,000 barrels of oil monthly.  Mr. Barbee also
worked with Gregg  Industrial  Insulators,  Inc.,  where he  increased  sales by
approximately  $5,000,000  annually.  Mr.  Barbee  also  serves  on the Board of
Directors for Merritt Tool in Kilgore,  Texas. This company is a privately owned
machine  tool shop that  focuses  principally  on the  aviation  and oil and gas
industries.

SCOTT R. THOMPSON  joined the Company in the final quarter of 2004. He graduated
from the  University  of Denver,  Colorado,  in 1985 with a Bachelor  of Science
Degree  in  Accounting,  receiving  his CPA in 1986  while  working  for Ernst &
Whinney,  a "Big 8"  accounting  firm.  His clients at Ernst & Whinney  included
privately owned and emerging businesses as well as multinational corporations in
the private and public  sectors.  Mr.  Thompson  has focused  during the past 12
years on real estate sales and  development and since 2000 has been a part owner
and manager for a capital management  company.  He holds Series 7, 55, 63 and 65
securities licenses.


COMPLIANCE  WITH SECTION 16(A) OF THE EXCHANGE ACT.:  Based solely upon a review
of Forms 3 and 4 and amendments thereto furnished to the Company during its past
fiscal year,  and Form 5 and  amendments  thereto  furnished to the Company with
respect to its most recent  fiscal year,  there were no  directors,  officers or
shareholders  that failed to file,  on a timely  basis,  reports  required to be
filed under Section 16(a) of the Exchange Act.

AUDIT COMMITTEE FINANCIAL EXPERT: The Company's board of directors does not have
an "audit committee  financial  expert," within the meaning of such phrase under
applicable regulations of the Securities and Exchange Commission, serving on its
audit committee.  The board of directors  believes that all members of its audit
committee are financially literate and experienced in business matters, and that
one or more  members of the audit  committee  are  capable of (i)  understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general  application  of GAAP  principles  in connection  with our
accounting for estimates,  accruals and reserves, (iii) analyzing and evaluating
our  financial   statements,   (iv)  understanding  our  internal  controls  and
procedures  for  financial  reporting;  and (v)  understanding  audit  committee
functions,  all of which are attributes of an audit committee  financial expert.
However,  the board of directors  believes that there is not any audit committee
member who has obtained these attributes through the experience specified in the
SEC's definition of "audit committee financial expert." Further, like many small
companies,  it is difficult  for the Company to attract and retain board members
who qualify as "audit  committee  financial  experts," and competition for these
individuals is significant.  The board believes that its current audit committee
is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."


ITEM 10  EXECUTIVE COMPENSATION

The Company does not owe any  compensation  to  executive  officers for the year
ended December 31, 2005. The Company's  by-laws authorize the Board of Directors
to fix the  compensation  of  directors,  to  establish  a set  salary  for each
director and to reimburse the director's  expenses for attending each meeting of
the Board of  Directors.  As of the date of this  report,  no  salaries or other
compensation have been paid to any of the Board of Directors, individually or as
a group.




                                       10
<PAGE>

ITEM 11           SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth  certain  information  regarding the  beneficial
ownership as of March 15, 2006,  of the Common Stock by (1) each person known to
the Company to be the  beneficial  owner of more than five percent of the Common
Stock,  (2) each  director and  executive  officer of the  Company,  and (3) all
directors and officers of the Company as a group.

Information  relating  to  beneficial  ownership  of the  Company  is based upon
"beneficial  ownership"  concepts set forth in the rules  promulgated  under the
Exchange Act. Under these rules a person is deemed to be a "beneficial owner" of
a security if that person has or shares "voting power," which includes the power
to vote or to direct the  voting of a  security,  or  "investing  power,"  which
includes the power to dispose or to direct the disposition of a security.  Under
the rules,  more than one person may be deemed to be a  beneficial  owner of the
same  securities.  A  person  is also  deemed  to be a  beneficial  owner of any
security as to which that person has the right to acquire  beneficial  ownership
within sixty (60) days from the current date.

NAME OF BENEFICIAL OWNER           NUMBER OF SHARES (1)         PERCENT OF CLASS

Michael Sheriff                             5,450,000                 20.02%

Robert Barbee                               1,000,000                 3.67%

Scott R. Thompson                              250,000                0.92%

James Flowers                               4,250,000(2)              15.61%

All directors and executive officers        6,700,000                 24.61%
as a group (3 persons)
----------------------

(1)      Based upon 27,712,000  shares of Common Stock  outstanding on March 31,
         2006.

(2) Currently subject to litigation

ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.

ITEM 13           EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS
Exhibit No.                                 Exhibit Name

2.1      Plan of Merger,  incorporated  by reference to Exhibit 10.1 to Form 8-K
         dated January 30, 2002 - Previously Filed.
3.1      Articles of Incorporation - Previously Filed.
3.2      Certificate  of Amendment to Articles of  Incorporation  of  Registrant
         filed with the Secretary of State of the State of Nevada on January 14,
         2002 - Previously Filed.


                                       11
<PAGE>

3.3      By-Laws - Previously Filed.
4.1      Specimen of Common Stock Certificate - Previously Filed.
4.3      Form of Warrant Agreement,  previously filed, incorporated by reference
         to Exhibit 10.2 to Form 8-K dated January 30, 2002 - Previously Filed.
10.1     License  Agreement  dated as of June 20, 2001 between  WebIAm,  Inc. as
         licensor, and WEBiX Inc. (the predecessor of the Company), as licensee-
         Previously Filed.
10.2     Amendment  to  License  Agreement  dated  as  of  January  15,  2002  -
         Previously Filed.
10.3     Form of Lock-Up Agreement,  incorporated by reference to Exhibit 4.1 to
         Form 8-K dated January 30, 2002 - Previously Filed.
10.4     Securities Repurchase Agreement - Previously Filed.
21       List of subsidiaries - None
31.1*    Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 302 of the  Sarbanes-Oxley
         Act of 2002.
31.2*    Certification  of  Principal  Financial  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002.
32.1*    Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 302 of the  Sarbanes-Oxley
         Act of 2002.
32.2*    Certification  of  Principal  Financial  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002.

* Filed herewith.

Reports on Form 8-K filed during 2005:

         July 28, 2005 Stock Purchase  Agreement for the  acquisition of AirGATE
         Technologies, Resignation of Charles Stidham and Press Release.

         September 9, 2005 Termination of Jim Flowers, Chief Operating Officer

         November  4, 2005  Material  Agreement,  62 month  lease  agreement  on
         Current office space.

         January 3, 3006  Material  Agreement,  contract  with Hexion  Specialty
         Chemicals



                                       12
<PAGE>



ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The  following is a summary of the fees billed to us by Robison,  Hill & Company
for  professional  services  rendered for the years ended  December 31, 2005 and
2004:

       Service                              2005            2004
       ------------------------------   -------------   -------------
       Audit Fees                        $    14,600     $    5,865

       Audit-Related Services                    -           -

       Tax Fees                                  130    130

       All Other Fees                   -                         -
                                        -------------   -------------

       Total                             $    14,730     $    5,995
                                        =============   =============

AUDIT FEES  consist of fees billed for  professional  services  rendered for the
audits  of  our  financial  statements,  reviews  of  our  interim  consolidated
financial  statements  included in  quarterly  reports,  services  performed  in
connection  with filings with the  Securities & Exchange  Commission and related
comfort letters and other services that are normally provided by Robison, Hill &
Company in connection with statutory and regulatory filings or engagements.

TAX FEES consist of fees billed for  professional  services for tax  compliance,
tax  advice  and tax  planning.  These  services  include  assistance  regarding
federal,  state and local tax compliance  and  consultation  in connection  with
various transactions and acquisitions.

AUDIT  COMMITTEE  PRE-APPROVAL OF AUDIT AND  PERMISSIBLE  NON-AUDIT  SERVICES OF
INDEPENDENT  AUDITORS:  The  Audit  Committee  is to  pre-approve  all audit and
non-audit  services  provided by the  independent  auditors.  These services may
include audit services,  audit-related services, tax services and other services
as allowed by law or regulation.  Pre-approval  is generally  provided for up to
one year and any  pre-approval  is  detailed  as to the  particular  service  or
category of services and is generally subject to a specifically approved amount.
The independent  auditors and management are required to periodically  report to
the Audit Committee regarding the extent of services provided by the independent
auditors in accordance with this pre-approval and the fees incurred to date. The
Audit  Committee  may also  pre-approve  particular  services on a  case-by-case
basis.

The  Audit  Committee  pre-approved  100%  of the  Company's  2004  audit  fees,
audit-related  fees,  tax fees,  and all other fees to the  extent the  services
occurred  after May 6, 2003,  the effective  date of the Securities and Exchange
Commission's final pre-approval rules.















                                       13
<PAGE>


                            THE X-CHANGE CORPORATION

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 2005 AND 2004
























                                       F-1

<PAGE>



                                    CONTENTS


                                                               Page

Independent Auditor's Report....................................F - 1

Consolidated Balance Sheets
  December 31, 2005 and 2004....................................F - 3

Consolidated Statements of Operations
  For the Years Ended December 31, 2005 and 2004................F - 4

Consolidated Statement of Stockholders' Equity
  For the Years Ended December 31, 2005 and 2004................F - 5

Consolidated Statements of Cash Flows
  For the Years Ended December 31, 2005 and 2004...............F - 10

Notes to Consolidated Financial Statements.....................F - 11



























<PAGE>
















                          INDEPENDENT AUDITOR'S REPORT


The X-Change Corporation & Subsidiaries


         We have audited the  accompanying  consolidated  balance  sheets of The
X-Change  Corporation  as of  December  31,  2005  and  2004,  and  the  related
consolidated statements of operations, cash flows and statement of stockholders'
equity  for the years  ended  December  31,  2005 and 2004.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

         We conducted our audits in accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The X-Change
Corporation  as of December 31, 2005 and 2004 and the results of its  operations
and its cash flows for the years  ended  December  31, 2005 in  conformity  with
accounting principles generally accepted in the United States of America.






                                       F-1

<PAGE>



         The accompanying  financial statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

                                            Respectfully Submitted,


                                            /s/ Robison, Hill & Co.
                                            Certified Public Accountants

Salt Lake City, Utah
April 17, 2006





























                                       F-2

<PAGE>



                            THE X-CHANGE CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                  2005                  2004
                                                                           -------------------  --------------------
ASSETS:
Current Assets
<S>                                                                        <C>                  <C>
   Cash                                                                    $            10,505  $              4,902
   Deposits                                                                             10,270                     -
   Employee Advances                                                                       338                     -
                                                                           -------------------  --------------------
          Total Current Assets                                                          21,113                 4,902
                                                                           -------------------  --------------------

Fixed Assets
   Computer Equipment                                                                   13,453                     -
    Furniture and Fixtures                                                              30,173                     -
    Less Accumulated Depreciation                                                      (11,432)                    -
                                                                           -------------------  --------------------
          Total Fixed Assets                                                            32,194                     -
                                                                           -------------------  --------------------

Oil & Gas Properties, Using Full Costs Method
   Oil & Gas Exploration Costs                                                           4,569                36,878
                                                                           -------------------  --------------------
         Total Oil & Gas Properties                                                      4,569                36,878
                                                                           -------------------  --------------------

Total Assets                                                               $            57,876  $             41,780
                                                                           ===================  ====================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities
    Accounts Payable                                                       $           103,253  $             42,292
    Accrued Expenses                                                                    11,415                     -
    Loan from Shareholders                                                             155,742                     -
                                                                           -------------------  --------------------
          Total Current Liabilities                                                    270,410                42,292
                                                                           -------------------  --------------------

Stockholders' Equity
   Preferred Stock, Par Value $.001,
   Series A Convertible - 5,000,000 Shares Authorized,
   0 Issued at December 31, 2005 and 2004                                                    -                     -
  Common Stock, Par value $.001, Authorized
   100,000,000 Shares, Issued 26,712,000 and 14,752,000
   at December 31, 2005 and 2004                                                        26,712                14,752
  Paid-In Capital                                                                      793,399               653,283
  Retained Deficit                                                                  (1,032,645)             (668,547)
                                                                           -------------------  --------------------
     Total Stockholders' Equity                                                       (212,534)                 (512)
                                                                           -------------------  --------------------

     Total Liabilities and Stockholders' Equity                            $            57,876  $             41,780
                                                                           ===================  ====================
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                       F-3

<PAGE>



                            THE X-CHANGE CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS



<TABLE>
<CAPTION>
                                                                For the Year Ended
                                                                   December 31,
                                                      ---------------------------------------
                                                             2005                 2004
                                                      -------------------  ------------------

<S>                                                   <C>                  <C>
Revenues                                              $           400,983  $                -
Oil Revenues                                                      166,255              37,439
                                                      -------------------  ------------------
   Total Revenue                                                  567,238              37,439

Costs of Operations                                               248,370              29,192
                                                      -------------------  ------------------

   Net Operating Income                                           318,868               8,247

Expenses
   General & Administrative                                       824,703              82,070
                                                      -------------------  ------------------

Net Loss from Operations                                         (505,835)            (73,823)
                                                      -------------------  ------------------

Other Income
   Interest, Net                                                  (27,496)                  -
   Gain on Sale of Oil Wells                                      169,233                   -
                                                      -------------------  ------------------

Total Other Income                                                141,737                   -
                                                      -------------------  ------------------

     Net Income (Loss)                                $          (364,098) $          (73,823)
                                                      ===================  ==================

Earnings per Share, Basic & Diluted                   $            (0.02)  $           (0.01)
                                                      ===================  ==================

Weighted Average Shares Outstanding                            20,740,027          16,295,835
                                                      ===================  ==================
</TABLE>







   The accompanying notes are an integral part of these financial statements.

                                       F-4

<PAGE>



                            THE X-CHANGE CORPORATION
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                          Preferred Stock            Common Stock                 Paid-In          Retained
                                         Shares  Par Value      Shares         Par Value          Capital           Deficit
                                      ---------- -------- ---------------- ----------------- ----------------- -----------------

<S>                                   <C>        <C>            <C>        <C>               <C>               <C>
Balance at December 31, 2003                   - $         -    13,002,000 $          14,752 $         653,283 $        (594,724)

Shares issued for services                     -        -        5,100,000             5,100            63,900                 -
Stock exchanged                                -        -          150,000               150                 -                 -
Shares canceled                                -        -       (3,500,000)           (3,500)            3,500                 -
Contributed Capital                            -        -                -                 -             5,087                 -
Net Income (Loss)                              -        -                -                 -                 -           (73,823)
                                      ---------- -------- ---------------- ----------------- ----------------- -----------------

Balance at December 31, 2004                                    14,752,000            14,752           653,283          (668,547)

Shares issued for consulting                   -        -        1,200,000             1,120            82,880                 -
Shares issued for cash                         -        -          100,000               100            99,900                 -
Shares issued for consulting                   -        -           70,000                70               930                 -
Shares exchanged for AirGate                   -        -       10,000,000            10,000          (174,424)                -
Shares issued for consulting                   -        -          650,000 650                         129,350                 -
Shares issued for consulting                   -        -           20,000                20             1,480                 -
Net Income (Loss)                              -        -                -                 -                 -          (364,098)
                                      ---------- -------- ---------------- ----------------- ----------------- -----------------

Balance at December 31, 2005                   - $       -      26,792,000 $          26,712 $         793,399 $      (1,032,645)
                                      ========== ======== ================ ================= ================= =================
</TABLE>













   The accompanying notes are an integral part of these financial statements.

                                       F-5

<PAGE>



                            THE X-CHANGE CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                 For the Year Ended
                                                                                    December 31,
                                                                        -------------------------------------
                                                                               2005               2004
                                                                        ------------------  -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                     <C>                 <C>
Net Income (Loss)                                                       $         (364,098) $         (73,823)
Adjustments to reconcile net loss to net cash
   Provided by operating activities:
Stock Issued for Services                                                          216,500              4,150
Depreciation and Amortization                                                       11,432                  -
Net Loss from Discontinued Operations                                                    -             58,315
Decrease (Increase) in Deposits                                                    (10,270)                 -
Decrease (Increase) in Employees Advances                                             (338)                 -
Increase (Decrease) in Accounts Payable                                             60,961             41,366
Increase (Decrease) in Accrued Expenses                                             11,415                  -
                                                                        ------------------  -----------------
Net Cash Used in Operating Activities                                              (74,398)            30,008
Net Cash From Discontinued Activities                                                    -              6,685
                                                                        ------------------  -----------------
Net Cash Used in Operating Activities                                              (74,398)            36,693
                                                                        ------------------  -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Furniture and Equipment                                                (43,626)                 -
Acquisition of AirGate                                                             (64,424)                 -
Oil & Gas Exploration Costs                                                         32,309            (36,878)
                                                                        ------------------  -----------------
Net Cash Provided by Investing Activities                                          (75,741)           (36,878)
                                                                        ------------------  -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from Shareholders                                                             155,742                  -
Capital Contributed                                                                      -              5,087
                                                                        ------------------  -----------------
Net Cash Provided by Financing Activities                                          155,742              5,087
                                                                        ------------------  -----------------


Net (Decrease) Increase in Cash and Cash Equivalents                                 5,603              4,902
Cash and Cash Equivalents at Beginning of Period                                     4,902                  -
                                                                        ------------------   ----------------
Cash and Cash Equivalents at End of Period                              $           10,505   $          4,902
                                                                        ==================   ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------
Cash paid during the year for:
  Interest                                                              $                -   $              -
  Franchise and income taxes                                            $                -   $              -
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None


   The accompanying notes are an integral part of these financial statements.

                                       F-6

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of  accounting  policies for The X-Change  Corporation  is
presented to assist in understanding  the Company's  financial  statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Nature of Operations and Going Concern

         The accompanying  financial  statements have been prepared on the basis
of accounting principles applicable to a "going concern",  which assume that the
Company  will  continue in  operation  for at least one year and will be able to
realize  its assets  and  discharge  its  liabilities  in the  normal  course of
operations.

         Several conditions and events cast doubt about the Company's ability to
continue  as  a  "going  concern".  The  Company  has  incurred  net  losses  of
approximately  $496,000  for the  period  from  October  4, 2000  (inception  of
development stage) to December 31, 2005, has a liquidity  problem,  and requires
additional  financing in order to finance its business  activities on an ongoing
basis.  The  Company is  actively  pursuing  alternative  financing  and has had
discussions  with various third parties,  although no firm commitments have been
obtained. In the interim,  shareholders of the Company have committed to meeting
any shortfall of operational cash flow.

         The  Company's  future  capital  requirements  will  depend on numerous
factors  including,  but not limited to, their ability to perform on current and
future development contracts and the commercialization thereof.

         These  financial  statements do not reflect  adjustments  that would be
necessary  if the Company  were unable to continue as a "going  concern".  While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be successful.

         If the  Company  were unable to  continue  as a "going  concern",  then
substantial adjustments would be necessary to the carrying values of assets, the
reported  amounts of its  liabilities,  the reported  expenses,  and the balance
sheet classifications used.






                                       F-7

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Organization and Basis of Presentation

         The Company was incorporated under the laws of the State of Delaware on
February  5,  1969  as  Diversified   Technologies   Group,  Inc.,  the  Company
reincorporated  and  changed  its  domicile to the State of Nevada on October 4,
2000. The Company on December 1, 1999, entered into an agreement (Reorganization
Agreement) to acquire all of the  outstanding  capital stock of S&J  (Chatteris)
Holdings Limited, a United Kingdom  corporation (S&J Holdings).  Pursuant to the
Reorganization  Agreement,  the Company agreed to acquire all of the outstanding
capital stock of S&J in exchange for shares of Common Stock. The  Reorganization
Agreement  required S&J Holdings to perform  certain  conditions,  including the
delivery  of  audited  financial  statements.  These  conditions  had  not  been
fulfilled by February 14, 2000;  therefore,  the  agreement  was  rescinded  and
deemed  to  have  been  void  and of no  effect  from  the  beginning  as if the
acquisition had not occurred. All shares issued in the acquisition were returned
to treasury.  The Company also attempted two  acquisitions  in 2000,  neither of
which were able to deliver  the  required  financial  statements.  The first was
rescinded and the second was not consummated.  In June 2001, the Company entered
into a reorganization  agreement that was later rescinded for failure to provide
adequate  compliance with the  representations,  warranties and covenants of the
agreement.  In  July  2001,  the  Company  changed  its  name  to  The  X-Change
Corporation.

         In June 2004,  the  Company  formed a new  subsidiary,  OIL ID Systems,
Inc., which acquired  thirty-eight wells in east Texas. As of December 31, 2004,
OIL ID Systems, Inc. changed its name to Curado Energy Resources, Inc.

         On July 20, 2005, the Company acquired AirGATE  Technologies,  Inc. for
10,000,000 restricted shares of common stock. After the AirGATE acquisition, the
Company  issued  650,000  shares of restricted  stock to  consultants of AirGATE
Technologies, Inc.

Nature of Business

         In July 2005, the Company reacquired AirGATE Technologies, Inc., due to
the  fact  that  AirGATE  had  made  significant  strides  in  taping  the  RFID
marketplace. The Company's business model is now primarily focused on furthering
the success of the wholly owned subsidiary  AirGATE  Technologies,  Inc. AirGATE
Technologies,  Inc.  is an  early-stage  company  and is a leading  provider  of
wireless solutions  utilizing radio frequency  identification  (RFID),  802.15.4
(Zigbee) low power, mesh-based networks and SAW (surface acoustic wave)



                                       F-8

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

technologies.specializing   in  radio   frequency   identification   (RFID)  and
intelligent,  sensor networks.  It is expected that these markets will exceed $6
billion dollars by 2008 and provide the Company with tremendous upside potential
as the RFID markets  continue to mature.  As a  full-solution  company,  AirGATE
Technologies  handles  business  assessment,  process and  technology  blending,
solution  architecture,  technology  selection,  including  proprietary  AirGATE
technology, and solution integration and support. AirGATE Technologies,  Inc., a
leader in unique applications utilizing RFID and wireless,  intelligent,  sensor
technology,  is  a  full-solution  company  that  handles  business  assessment,
technology selection,  including proprietary AirGATE technology, and integration
and support.  The Company has, in an environment of technology cost compression,
built a stable  of  technology  partners  that are best in class and span a wide
range of solutions to support small, medium and large enterprises.  AirGATE is a
founding member of the DFW-based RFID HUB.

         The AirGATE mission is to provide customers with innovative  technology
solutions,  such as Radio Frequency  Identification (RFID), that are the product
of  inventive  minds  melding  superior  technical  skills with  outside-the-box
thinking and  state-of-the-art  technologies.  AirGATE  builds its portfolios of
products and services around a simple  concept;  provide the customer with truly
exceptional  value and  AirGATE  is we are  assured  of an  exceptional  return.
AirGATE  provides  customers  with solutions  tailored to their specific  needs;
products and services of unsurpassed  convenience,  performance  and reliability
that are an uncommon value. AirGATE's current applications include prison inmate
collect   call   verification,   child  safety  seat  buckle   status,   product
authentication,  real-time location systems,  remote oil and gas well monitoring
and proprietary oil industry solutions.

Principals of Consolidation

         The  consolidated  financial  statements  include the  accounts for The
X-Change  Corporation and its wholly owned  subsidiaries  AirGATE  Technologies,
Inc. and Curado  Energy  Resources,  Inc.  (Formerly  OIL ID Systems,  Inc.) The
results of  subsidiaries  acquired during the year are  consolidated  from their
effective  dates of  acquisition.  All  significant  intercompany  accounts  and
transactions have been eliminated.

Cash and Cash Equivalents

         For the purpose of  reporting  cash flows,  the Company  considers  all
highly liquid debt  instruments  purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.


                                       F-9

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Oil and Gas Producing Activities

         The Company is in the development stage and has earned minimal revenues
from  its  planned  operations.  It is  primarily  engaged  in the  acquisition,
exploration,  and  development of oil and gas  properties.  The Company uses the
full  costs  method  of  accounting  for these  activities.  Under the full cost
concept, all costs incurred in acquiring,  exploring,  and developing properties
within a relatively  large  geopolitical  (as opposed to geological) cost center
(such as a country) are  capitalized  when incurred and are amortized as mineral
reserves  in the cost  center are  produced,  subject to a  limitation  that the
capitalized costs not exceed the value of those reserves.  All costs incurred in
oil and gas producing  activities  are regarded as integral to the  acquisition,
discovery,  and  development  of whatever  reserves  ultimately  result from the
efforts as a whole, and are thus associated with the company's reserves.

         In  November  2005,  the Company  sold the  majority of the oil and gas
leases and ceased oil and gas  operations.  The sale of the assets for  $500,000
produced a one-time gain of approximately $169,000. The proceed were utilized to
reduce  certain  liabilities  as  well  as  create  operating  capital  for  the
furtherance of the operations of the Company's wholly owned subsidiary,  AirGATE
Technologies, Inc, which was acquired in July 2005.

Concentrations of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  management  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.

Stock Compensation for Non-Employees

         The  Company  accounts  for the fair  value of its  stock  compensation
grants for  non-employees  in accordance with FASB Statement 123. The fair value
of each grant is equal to the market price of the Company's stock on the date of
grant if an active  market  exists or at a value  determined  in an arms  length
negotiation between the Company and the non-employee.

                                      F-10

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Earnings (Loss) per Share

         Basic loss per share has been  computed  by  dividing  the loss for the
year  applicable to the common  stockholders  by the weighted  average number of
common  shares  outstanding  during  the  years.  The  effects  of common  stock
equivalents are anti-dilutive and thus are not considered.

NOTE 2 - INCOME TAXES

         As  of  December  31,  2005,  the  Company  had a  net  operating  loss
carryforward for income tax reporting  purposes of approximately  $1,032,645that
may be offset against future taxable income through 2025. Current tax laws limit
the amount of loss  available to be offset  against future taxable income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carryforwards  will expire  unused.  Accordingly,  the potential tax
benefits of the loss  carryforwards  are offset by a valuation  allowance of the
same amount.

NOTE 3 - COMMITMENTS

         Prior to 2005,  all  activities  of the Company had been  conducted  by
corporate officers from either their homes or business offices.

            On November 4, 2005,  The Company  entered into a  commercial  lease
agreement (the "Lease") with Armet Bethany Limited  Partnership (the "Landlord")
for approximately  11,400 square feet of rentable area in Bethany Tech Center at
404 West  Bethany  Drive in  Allen,  Texas.  The term of the  Lease is 62 months
commencing on November 1, 2005 and ending on December 31, 2010.  The Company has
no option to extend  the  Lease.  The base rent  under the Lease is as  follows:
November 1, 2005 to November  30,  2005:  $0;  December 1, 2005 to December  31,
2005:  $6,650;  January 1, 2006 to  December  31,  2006:  $7,600 per month;  and
January 1, 2007 to  December  31,  2010:  $8,075 per month.  In addition to base
rent, the Company will be responsible  for certain costs and expenses  specified
in the Lease,  including,  without  limitation,  certain utility,  HVAC service,
insurance, maintenance, repair, tax, insurance and CAM (common area maintenance)
costs and expenses.





                                      F-11

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - COMMITMENTS (Continued)

         During  January,  2005,  a  shareholder  extended  to  the  Company  an
unsecured line of credit for up to $500,000. The credit line carries interest at
the  existing  prime rate.  As of December  31,  2005,  there is no  outstanding
balance against the line.

NOTE 4 - PREFERRED STOCK

         The Company has  authorized a total of  10,000,000  shares of Preferred
Stock.  Series A Convertible  Preferred Stock is the initial series of Preferred
Stock. This series shall consist of 5,000,000 shares with a par value of $.001.

         The  Corporation  is under no  obligation to pay dividends or to redeem
the Series A Convertible  Preferred  Stock.  This series of stock is convertible
into 10  shares  of  Common  Stock  at the  option  of the  shareholder  or upon
automatic conversion.

         In the  event of any  liquidation,  dissolution  or  winding-up  of the
Corporation,  the holders of outstanding  shares of Series A Preferred  shall be
entitled  to be  paid  out  of  the  assets  of the  Corporation  available  for
distribution to  shareholders,  before any payment shall be made to or set aside
for holders of the Common Stock, at an amount of $1 per share.

         As of December 31, 2005, there are no preferred shares issued.

NOTE 5 - COMMON STOCK TRANSACTIONS

         On April 2, 2004, the Company issued 100,000 shares of common stock for
consulting services. The shares were valued at $0.53 per share.

         On April  26,  2004,  the  Company's  president  surrendered  his stock
options  contract for  12,000,000  common shares in exchange for the issuance of
4,000,000  shares of restricted  common stock.  The shares are  restricted for 2
years.  In  connection  with  issuance  of the shares,  $15,000 was  recorded as
consulting expense.

         On September 30, 2004,  the Company sold 100% of its AirGate,  a wholly
owned  subsidiary,  shares in  exchange  for return of  3,500,000  of its common
shares. These shares were returned to treasury and subsequently canceled.

         On  September  30,  2004,  the Company  entered  into a share  purchase
agreement  with Kolt Oil and Gas, a Texas  Corporation,  where it  acquired  the
business, operations and prospects of Kolt Oil



                                      F-12

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - COMMON STOCK TRANSACTIONS (Continued)

and Gas for 2,500,000 shares of common stock.  Subsequently,  the share purchase
agreement  with Kolt Oil and Gas was  rescinded  and the  2,500,000  shares were
canceled.  On March 11, 2005,  the Company  issued 150,000 shares to acquire the
Texas operator's license for oil and gas properties of Kolt Oil and Gas.

         On November 23, 2004,  the Company  issued  1,000,000  shares of common
stock for consulting services. The shares were valued at $0.001 per share.

         As of  January  11,  2005,  the  Company  issued  1,120,000  shares  of
restricted common stock for cash of $84,000.

         As of March 31, 2005,  the Company  issued 100,000 shares of restricted
common stock to an outside investor for $1per share.

         As of March 31, 2005,  the Company  issued  70,000 shares of restricted
common stock for consulting services. In connection with issuance of the shares,
$1,000 was recorded as consulting expense.

         On July 20, 2005, the Company reacquired AirGATE Technologies, Inc. for
10,000,000 restricted shares of common stock. After the AirGATE acquisition, the
Company  issued  650,000  shares of restricted  common stock to  consultants  of
AirGATE Technologies,  Inc. In connection with issuance of the shares,  $130,000
was recorded as a one time consulting expense.

            On November 11, 2005,  the Company issued 20,000  restricted  common
stock to engineer  employees of the Company.  In connection with issuance of the
shares, $1,500 was recorded as consulting expense.

            On January 5, 2006,  the Company  issues  10,000  restricted  common
stock to a consultant of the Company

            On January 5, 2006,  the Company issued 500,000 shares of restricted
common  stock,  $.001  par  value,  to  Hexion  Specialty   Chemical,   Inc.  as
consideration  for Hexion's  expected $219,180 increase in development costs and
AirGATE's  expected  $219,180  decrease in development  costs of the development
contract  between  Hexion and AirGATE  which was  finalized in the first week of
2006.





                                      F-13

<PAGE>



                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - OIL AND GAS ACTIVITIES

         In  November  2005,  the Company  sold the  majority of the oil and gas
leases and ceased oil and gas  operations.  The sale of the assets for  $500,000
produced a one-time gain of approximately  $169,000.  The proceeds were utilized
to reduce certain liabilities as well as create operating capital.

         Oil and Gas Revenue for the year ended  December 31, 2005,  amounted to
166,255.

NOTE 7 - CONTINGENCIES

         On January 11, 2006, The Company  commenced legal action against former
employee James E. Flowers, Logix Consulting,  Inc. and WaveTRracAC,  Inc. As the
Plaintiff,  the Company  seeks  temporary and  permanent  injunctive  relief and
damages  against the  Defendants  as a result of their  unlawful  and  malicious
breach of contract (violation of non disclosure provisions); breach of fiduciary
duty,  misappropriation  of trade  secrets  and other  proprietary  information;
tortuous interference with prospective business  relationships;  and conversion.
As part of the legal  action,  the Company is demanding  the return of 4,250,000
shares of restricted common stock issued to Mr. Flowers.

NOTE 8 - MERGER/ACQUISITION

         On  September  30,  2004,  the Company  entered  into a share  purchase
agreement  with Kolt Oil and Gas, a Texas  Corporation,  where it  acquired  the
business,  operations and prospects of Kolt Oil and Gas for 2,500,000  shares of
common stock.  Subsequently,  the share purchase agreement with Kolt Oil and Gas
was rescinded and the 2,500,000  shares were  canceled.  On March 11, 2005,  the
Company issued 150,000  shares to acquire the Texas  operator's  license for oil
and gas properties of Kolt Oil and Gas.

            On July 20,  2005,  The  X-Change  Corporation  acquired  all of the
outstanding shares (the "Acquisition") of AirGate Technologies, Inc.("AirGate"),
pursuant to a Stock Purchase Agreement dated the same.

            In consideration for the Acquisition,  the Company issued 10,000,000
shares of restricted common stock.

         AirGATE  Technologies,  Inc. is an early-stage company and is a leading
provider of wireless solutions utilizing radio frequency  identification (RFID),
802.15.4 (Zigbee) low power, mesh-based networks and SAW (surface acoustic wave)
technologies.specializing   in  radio   frequency   identification   (RFID)  and
intelligent,  sensor networks.  It is expected that these markets will exceed $6
billion  dollars  by 20087  and  provide  the  Company  with  tremendous  upside
potential as the RFID markets  continue to mature.  As a full-solution  company,
AirGATE  Technologies  handles  business  assessment,   process  and  technology
blending,  solution  architecture,  technology selection,  including proprietary
AirGATE technology,  and solution integration and support.AirGATE  Technologies,
Inc., a leader in unique applications utilizing RFID and wireless,  intelligent,
sensor technology, is a full-

                                      F-14

<PAGE>


                            THE X-CHANGE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - MERGER/ACQUISITION (Continued)

solution  company  that  handles  business  assessment,   technology  selection,
including proprietary AirGATE technology,  and integration and support.  AirGATE
holds several  lucrative  development  contracts with several  companies.  These
companies include Hexion Specialty Chemical, and Securus Technologies,  Inc. and
Hitachi America, Ltd.

NOTE 9 -  SUBSEQUENT EVENTS

            Effective January 3, 2006, AirGATE Technologies, Inc. ("AirGATE"), a
wholly-owned subsidiary of The X-Change Corporation ("X-Change"), entered into a
letter  agreement  (the  "Agreement")  with  Hexion  Specialty  Chemicals,  Inc.
("Hexion") to launch Phase II of a three-phase  project (the "Project")  related
to the research and development by AirGATE of an oil and gas exploration product
(the "Product").

            The cost of the Project  (including labor to be provided by AirGATE)
is (a) expected to be $931,640 and (b) generally intended to be borne equally by
AirGATE and Hexion (i.e., $465,820 each). Hexion is expected to pay its share of
the  development  cost  plus an  additional  $219,180  (i.e.,  an  aggregate  of
$685,000) to AirGATE as follows:  $250,000 at the  commencement  of Phase II and
$72,500 on or before the third of each  calendar  month  commencing  in February
2006 and  ending  in July  2006.  AirGATE  is  expected  to pay its share of the
development  cost minus  $219,180  (i.e.,  an aggregate of $246,640) as follows:
$146,640  in labor over the term of the  Project  and  $100,000,  which shall be
utilized to purchase software and hardware over the duration of the project.

            The Company issued 500,000 shares of restricted common stock,  $.001
par value, to Hexion on January 5, 2006 as consideration  for Hexion's  expected
$219,180 increase in development costs and AirGATE's  expected $219,180 decrease
in development costs.

            If the Project is  successfully  completed,  the Agreement  provides
that  AirGATE  will be paid a royalty by Hexion in an amount  equal to 5% of the
Hexion's  gross revenue  derived from the Product  during the term  beginning on
date of commercialization of the Product and ending on the 7 year anniversary of
such date.









                                      F-15

<PAGE>





















                                   SIGNATURES



In accordance with Section 13 or 15 (d) of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

THE X-CHANGE CORPORATION
(Registrant)


Dated: April 19, 2006        By:/s/ Michael L. Sheriff
                             -----------------------------------------------
                             Michael L. Sheriff, President and Chief
                             Executive Officer
                             (Principal Executive Officer)



Dated: April 19, 2006        By:/s/ Scott Thompson
                             -----------------------------------------------
                             Scott Thompson, Chief
                             Financial Officer
                             (Principal Financial Officer)