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, 2004

       [ ] 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.)

                        100 Allentown Parkway, Suite 110
                                Allen, TX 75002
               (Address of principal executive offices)(Zip Code)


                                 (972) 747-1206
                (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]

State issuer's revenues for its most recent fiscal year:  $37,439

As of March 15, 2005, there were approximately 14,752,000 shares of Common Stock
outstanding,  of which  13,752,000  were held by  non-affiliates.  The aggregate
market value of Common Stock (based upon the average of the bid and asked prices
on March 15, 2005) held by non-affiliates was approximately $29,000,000.

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
<TABLE>
<CAPTION>

                                                                                           PAGE
                                     PART I

<S>                                                                                        <C>
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..........................  6

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

ITEM  8. Changes in and Disagreements With Accountants on Accounting
                   and Financial Disclosure.................................................  7

ITEM  8a.  Controls and Procedures..........................................................  7

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................................... 10

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

ITEM  14. Principal Accountant Fees and Services ........................................... 12
</TABLE>




                                       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  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  continuing  to  acquire
interests in oil and gas  opportunities  that management  believes will generate
significant  operating revenues and a return on investment to shareholders using
the "Paragon" technology discussed below.

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.
Specifically  during the past three years, the Company acquired the business and
operations  of WEBiX on January 15, 2003, in exchange for  securities.  On March
13, 2003,  the Company  rescinded  its  agreement  with WEBiX and  reentered the
development stage.

On  February 9, 2004,  the Company  formed a wholly  owned  subsidiary,  AirGate
Technologies,  Inc.,  for  the  purpose  of  engaging  in  the  development  and
acquisition   of   leading-edge   wireless   internet/networking   technologies,
principally RFID ("radio frequency identification").  On September 30, 2004, the
Company  decided  that the  business  plan of AirGate  could not be advanced and
should be  discontinued.  The  Company  sold  AirGate  to its  founder,  Michael
Sheriff,  in exchange for the return of 3,500,000 common shares of the Company's
common stock. The Company  retained a 15 percent net proceeds  interest from Air
Gate  contracts with Standard  Motor  Products,  Medtronics - Cranial and Spinal
Division, Borden Chemical and child safety seat technology.

In June 2004, the Company formed a new subsidiary,  OIL ID Systems,  Inc., which
subsequently acquired 38 wells in east Texas and is now headquartered in Dallas.
This subsidiary  subsequently changed its name to Curado Energy Resources,  Inc.
The principals  involved in this  subsidiary  have 25 years of experience in the
marketing of and exploration for petroleum products and services.

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.



                                       3
<PAGE>

PRESENT BUSINESS MODEL: The Company's business model now consists of several key
differentiators  that,  management feels, will set it apart. The Company's focus
is to create long-term shareholder value by:

-  Pursuing  intelligent,   opportunistic   acquisitions  of  other  oil  &  gas
exploration  and  production  company  opportunities  whose  business  plans and
operations are complementary;

- Consolidating  redundant functions,  such as oilfield operations,  billing and
accounting and customer support;

- Partnering with other oil and gas  exploration  and production  companies that
can provide leverage for the Company's activities;

-  Joining  with  energy  industry  organizations  to  highlight  the  Company's
technology solutions and oil and gas expertise;

-  Exploitation  of secondary  and  tertiary oil recovery  methods in oil fields
where current methods have failed to result in significant oil recovery; and

- Deepening  efforts in wells which are currently highly  successful and located
in close proximity to our holdings, reducing drilling risk and increasing profit
opportunity.

The  Company's  sole  focus  is now on the  oil and gas  industry,  the  primary
objective being to identify,  acquire,  and develop working interest percentages
in smaller,  underdeveloped  oil and gas  projects in Texas that do not meet the
requirements of the larger producers and developers.

Currently  the  Company  has  two  wholly-owned   subsidiaries,   Curado  Energy
Resources,  Inc.,  which  presently  owns 52 wells in East  Texas  and which was
formerly known as OIL ID systems,  and Kolt Oil and Gas, Inc., which is licensed
to operate oil and gas properties in Texas.  The Company also has a 15% interest
in four RFID (Radio Frequency Identification) projects.

The Company,  through  Curado,  now has as its  objective  the  acquisition  and
development of properties with the following general characteristics:

-Locations within or close to areas with an established  production  history and
infrastructure;

-Multiple productive sands and reservoirs;

-Low or  non-existent  current  production  levels  with  identified  proven and
potential reserve opportunities; and

-Properties  which management  believes will respond favorably to treatment with
the company's proprietary biochemical process.

Currently,  all of  Curado's  oil and gas assets  are  located in the East Texas
Woodbine  Field,  which  covers five  counties in East Texas,  those being Rusk,
Gregg,  Smith,  Upshur and  Cherokee.  This  field is over 70 years old,  having
produced over six billion barrels of oil, with estimated reserves of one billion
barrels remaining.

PARAGONE  BIO-TECHNOLOGY:  Since the  fourth  quarter  of 2004,  Curado has been
customizing a proprietary  process for  injecting a microbial  bio-tech  process
into low and non performing wells.  Micro-Tes  manufactures the  microbial-based
product that is the basis for the proprietary process.  Curado has gained access
to the microbial  product  through a  distribution  agreement that Micro-Tes has
with the  Robert  Barbee,  a director  and  executive  officer  of the  Company.
Micro-Tes was founded in 1991 and  manufactures a broad line of  microbial-based
products.  These products consist of blends of acclimated,  naturally occurring,
non-pathogenic  microbes. These microbes offer a safe and economical alternative
to chemicals.  Curado  specifically uses the Micro-Tes'  product named PARAGONE,
which solubilizes paraffin and asphaltene in formations, well bores, pumps, flow
lines,  heater  treaters and storage  tanks.  The product  reduces or eliminates
emulsion,  corrosion,  scale,  hydrogen  sulfide  and oil carry  over.  PARAGONE
releases  drilling fluid,  frac gels,  polymers and soap from the formation.  It
increases API gravity, oil production, gas production and water injection rates.
Treatments with the product have resulted in significant savings for the company
when compared to the cost prohibitive alternative of chemical treatments.



                                       4
<PAGE>

The use of PARAGONE allows Curado to focus on  recompletions  and workovers that
would  otherwise  be cost  prohibitive.  In  addition to the  recompletions  and
workovers of existing wells,  Curado will focus on deepening existing wells when
managements  believe such can minimize  risk and maximize the use of  resources.
Through  a  combination  of art  and  science  management  believes  that it can
minimize  the risk of  unsuccessful  deepening  efforts  and  capitalize  on the
experience of  management  and  consultants.  The Company is focused on enhanced
recovery  technologies  that  will  allow it to  become  a  leader  in oil & gas
development.


ITEM 2   DESCRIPTION OF PROPERTY

The executive offices of the Company, as of the date of this report, are located
at 100 Allentown  Parkway,  Suite 110, Allen, TX 75002. The Company is receiving
the use of these  premises  free of charge until March 15, 2005.  The  telephone
number at this address is (972) 747-1206.


ITEM 3   LEGAL PROCEEDINGS

There are no pending  legal  proceedings  to which the  Company is a party or to
which any of its properties are subject,  nor are there any proceedings known to
the Company to be contemplated by any governmental authority.  Additionally, the
Company is unaware of any legal proceedings,  pending or contemplated,  in which
any director, officer, affiliate or any principal security holder of the Company
is a party or has an interest adverse to the Company.

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, 2004.


                                     PART II

ITEM 5            MARKET FOR COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS

Principal  Market and Sales Prices for Common Stock: As of March 15, 2005, there
were 14,752,000 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

                             2004                    2003
                             ----                    ----
-------------------------------------------------------------------
                       High         Low        High        Low
-------------------------------------------------------------------
   First Quarter       $0.95       $0.05      $0.08       $0.04
-------------------------------------------------------------------
  Second Quarter       $0.62       $0.31      $0.20       $0.05
-------------------------------------------------------------------
   Third Quarter       $0.39       $0.12      $0.19       $0.07
-------------------------------------------------------------------
  Fourth Quarter       $2.34       $0.20      $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 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 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.


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.  The Company ceased all operations in WEBiX during the fourth quarter of
2002 and the  acquisition  was unwound in the first quarter of 2003.  Similarly,
the Company  disposed of its RFID  subsidiary  in the third  quarter of 2004 and
began operations in the oil and gas industry during the latter half of 2004.

As is common with  development  stage  companies,  the Company has had recurring
losses  from  operations  since  inception  and had a deficit at  year-end.  The
company was able to obtain only enough working  capital,  as loans, to close and
maintain its operations in an orderly fashion.



                                       6
<PAGE>

PLAN OF OPERATION:  The Company's present business model consists of several key
differentiators  that, management feels, will set it apart from its competition.
The Company's focus is to create  long-term  shareholder  value by: (1) Pursuing
intelligent,  opportunistic  acquisitions  of other  oil & gas  exploration  and
production  company  opportunities  whose  business  plans  and  operations  are
complementary;   (2)  consolidating   redundant  functions,   such  as  oilfield
operations,  billing and accounting and customer  support;  (3) Partnering  with
other oil and gas exploration and production company software,  that can provide
leverage  for  the  Company's  activities;  (4)  Joining  with  energy  industry
organizations,  highlighting the Company's  technology solutions and oil and gas
expertise  and (5) Building a  recognizable  brand  identity  for its  operating
subsidiaries.

The  Company's  sole  focus  is now on the  oil and gas  industry,  the  primary
objective being to identify,  acquire,  and develop working interest percentages
in smaller,  underdeveloped  oil and gas  projects in Texas that do not meet the
requirements of the larger producers and developers.

RESULTS OF OPERATIONS: The Company only had limited operations, and had realized
only  limited  revenues for the year ended  December  31, 2004.  The Company has
realized  a net loss  from  operations  of  $669,000  since  the  inception  due
primarily  to legal,  accounting  and  management  fees  necessary  to bring the
Company through the development stage to become a producer of oil and gas. Since
October 4, 2000, the Company has been in the  development  stage company and has
not begun principal operations. Accordingly,  comparisons with prior periods are
not meaningful.

LIQUIDITY  AND  CAPITAL  RESOURCES:  The  Company  continues  to seek  strategic
alternatives,  including  discussions with joint venture partners and investors.
During January 2005,  the Company  signed a revolving line of credit  promissory
note  for  $500,000  with  certain  shareholders.   The  accompanying  financial
statements  have been  prepared  assuming the Company  will  continue as a going
concern.  The  Company's  ability to continue as a going  concern,  however,  is
dependent  upon the Company's  ability to implement  its business  objectives in
order to generate cash flow.

ITEM 7   FINANCIAL STATEMENTS

The financial  statements of the Company as of and for the years ended  December
31, 2004 and December 31, 2003 are included immediately  preceding the signature
page to this  Report.  See Item 13 for a list of 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   have   concluded  that  The  X-Change
Corporation,  Inc.'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.



                                       7
<PAGE>

There were no significant changes in The X-Change  Corporation  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.

<TABLE>
<CAPTION>
------------------------------- ------------------------- ---------------------------------------------
             NAME                          AGE                            POSITIONS HELD
------------------------------- ------------------------- ---------------------------------------------
<S>                             <C>                       <C>
Charles Stidham                            62               President, CEO and Chairman of the Board
------------------------------- ------------------------- ---------------------------------------------
Robert Barbee                              34              Vice President of Operations, and Director
------------------------------- ------------------------- ---------------------------------------------
Scott Thompson                             42                     CFO, Treasurer, and Director
------------------------------- ------------------------- ---------------------------------------------
</TABLE>

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.

CHARLES STIDHAM was a private  investor during the five years preceding the date
of this report.  He graduated from Georgia Tech University in 1964 with a degree
in  mechanical  engineering  and from the  University  of Texas in Austin with a
Juris Doctorate in 1972.

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 garnered
the  distributorship  for  micro  chemical  applications  to 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


                                       8
<PAGE>

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 which  focuses  principally  on the  aviation and oil and gas
industries.

SCOTT R. THOMPSON  joined the Company in the final quarter of 2004. He graduated
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  multinational  and
oil and gas clients.  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.

MICHAEL P.  MCINERNEY  joined the Company on October 21, 2004 as a consultant to
coordinate  corporate  development.  He brings over 30 years  experience  to the
Company.  His past  experience  includes  executive  positions with two New York
Stock Exchange  listed  companies,  the oversight of corporate  development  and
investor relations with these companies and serving on the board of directors of
Canadian and European  subsidiaries of U.S. based international energy concerns.
Mr.  McInerney  has conducted  meetings,  developed  presentation  materials and
coordinated field trips to the Far East, U.S., Canada,  Europe and South America
for  institutional  investors  and has  been  successful  in  arranging  private
investor financing.

Mr.  McInerney  holds a  Bachelors  of  Business  Arts in  Accounting  from  the
University  of Michigan and is a member of the  American  Institute of Certified
Public  Accountants.  His  credentials  include past  President of the Petroleum
Investor Relations Association and of the Institute of Management Accountants.

WILLIAM  (BILL)  BOTTO  holds  degrees  in both  Biology,  with an  emphasis  in
microbiology,  and  Petroleum  Geology.  He is  also a  Registered  Professional
Geologist in the state of Texas.  Mr. Botto has over 23 years  experience in the
oil & gas industry.  His experience ranges from frontier exploration in the East
Texas  Cretaceous  carbonates  and sands to the tertiary sands of offshore Texas
and  Louisiana.  He has  worked for Placid Oil Co.,  Sage  Energy  Co.,  and SPG
Exploration.  In 1991 he co-founded  Micro-TES,  Inc.,  whose focus is designing
biological  products  for  enhancing  oil  production  (Microbial  Enhanced  Oil
Recovery,  "MEOR"),  bioremediation,  and  related  products.  He  is  currently
involved in oil recovery projects in the USA, China,  Russia,  and the Athabasca
TAR sands in western  Canada.  Mr. Botto is a  consultant  to the Company and is
provides the Paragone technology to its development

Mr. Botto is an active  member of the AAPG  (American  Association  of Petroleum
Geology) and the American Society of Microbiology.

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


                                       9
<PAGE>

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  has not  paid,  nor does it owe,  any  compensation  to  executive
officers for the year ended December 31, 2004. 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.


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, 2005,  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 AND ADDRESS OF BENEFICIAL OWNER    NUMBER OF SHARES (1)    PERCENT OF CLASS

Robert Barbee                             1,000,000                 6.78%

All directors and executive officers      1,000,000                 6.78%
as a group (3 persons)

South Beach Live, Inc.                    1,055,000                 7.15%
----------------------
(1)      Based upon 14,752,000  shares of Common Stock  outstanding on March 15,
         2005.

ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.


                                       10
<PAGE>

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.

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 in the  fourth  quarter  of 2004:  There were no Form
8-K's filed during the quarter ended December 31, 2004.



                                       11
<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, 2004 and
2003:

         Service                              2004            2003
         ------------------------------   -------------   -------------
         Audit Fees                        $    5,865      $    7,596

         Audit-Related Services                     -               -

         Tax Fees                                 130             130

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

         Total                             $    5,995      $    7,726
                                          =============   =============

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  2003  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.




                                       12
<PAGE>





                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 2004 AND 2003























<PAGE>



                                    CONTENTS


                                                                       Page

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

Consolidated Balance Sheets
  December 31, 2004 and 2003............................................F - 3

Consolidated Statements of Operations
  For the Years Ended December 31, 2004 and 2003........................F - 4

Consolidated Statement of Stockholders' Equity
 Period February 5, 1969 (inception) to December 31, 2004...............F - 5

Consolidated Statements of Cash Flows
  For the Years Ended December 31, 2004 and 2003........................F - 9

Notes to Consolidated Financial Statements.............................F - 10









<PAGE>



                          INDEPENDENT AUDITOR'S REPORT


The X-Change Corporation & Subsidiaries
(A Development Stage Company)


         We have audited the  accompanying  consolidated  balance  sheets of The
X-Change  Corporation (a development  stage company) as of December 31, 2004 and
2003, and the related  consolidated  statements of operations and cash flows for
the  years  ended  and the  cumulative  since  October  4,  2000  (inception  of
development  stage) to December  31,  2004,  and the  consolidated  statement of
stockholders'  equity since  February  5,1969  (inception) to December 31, 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 (a  development  stage company) as of December 31, 2004 and 2003 and
the results of its  operations  and its cash flows for the years ended  December
31,  2004 and 2003 and the  cumulative  since  October  4,  2000  (inception  of
development stage) to December 31, 2004 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 11, 2005











                                       F-2

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                  2004                  2003
                                                                           -------------------  --------------------
ASSETS:
Current Assets:
<S>                                                                        <C>                  <C>
   Cash                                                                    $             4,902  $                  -
                                                                           -------------------  --------------------
          Total Current Assets                                                           4,902                     -
                                                                           -------------------  --------------------

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

Total Assets                                                               $            41,780  $                  -
                                                                           ===================  ====================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:                                                       $            42,292  $                926
                                                                           -------------------  --------------------
          Total Current Liabilities                                                     42,292                   926
                                                                           -------------------  --------------------

Stockholders' Equity:
   Preferred Stock, Par Value $.001,
   Series A Convertible - 5,000,000 Shares Authorized,
   0 Issued at December 31, 2004 and 2003                                                    -                     -
  Common Stock, Par value $.001, Authorized
   100,000,000 Shares, Issued 14,752,000 and 13,002,000
   at December 31, 2004 and 2003                                                        14,752                13,002
  Paid-In Capital                                                                      653,283               580,796
  Retained Deficit                                                                    (536,688)             (536,688)
 Deficit Accumulated During Development Stage                                         (131,859)              (58,036)
                                                                           -------------------  --------------------
     Total Stockholders' Equity                                                           (512)                 (926)
                                                                           -------------------  --------------------

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







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

                                       F-3

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                  Cumulative
                                                                                                     Since
                                                                                                  October 4,
                                                                                                     2000
                                                                 For the Year Ended               Inception of
                                                                     December 31,                 Development
                                                      ---------------------------------------
                                                             2004                 2003               Stage
                                                      -------------------  ------------------  -----------------

<S>                                                   <C>                  <C>                 <C>
Revenues                                              $            37,439  $                -  $          37,439
Costs of Operations                                                29,192                   -             29,192
                                                      -------------------  ------------------  -----------------

   Net Operating Income                                             8,247                   -              8,247

Expenses
   General & Administrative                                        23,755               7,902             81,791
                                                      -------------------  ------------------  -----------------

Net Loss from Continuing Operations                               (15,508)             (7,902)           (73,544)
                                                      -------------------  ------------------  -----------------

Discontinued Operations
   Loss on Sale of AirGate                                        (58,315)                  -            (58,315)
                                                      -------------------  ------------------  -----------------

     Net Income (Loss)                                $           (73,823) $           (7,902) $        (131,859)
                                                      ===================  ==================  =================

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

Weighted Average Shares Outstanding                            16,295,835          22,444,620
                                                      ===================  ==================
</TABLE>











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

                                       F-4

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2004
<TABLE>
<CAPTION>
                                                                                                                           Deficit
                                                                                                                         Accumulated
                                                                                                                            Since
                                                                                                                          October 4,
                                                                                                                            2000
                                                                                                                        Inception of
                                                     Preferred Stock          Common Stock        Paid-In    Retained    Development
                                                    Shares   Par Value     Shares    Par Value    Capital     Deficit        Stage
                                                   --------   --------   ---------   ---------   ---------   ---------    ----------
<S>                                                <C>        <C>        <C>         <C>         <C>         <C>          <C>
Balance at February 5, 1969
(inception)                                            --     $   --          --     $    --     $    --     $    --      $     --

June 11, 1969 Issuance of Stock
  for cash                                             --         --           928           1     102,154        --            --
Issuance of stock for services                         --         --            50        --         6,137        --            --
Net Loss 1969 to 1993                                  --         --          --          --          --      (171,352)         --
                                                   --------   --------   ---------   ---------   ---------   ---------    ----------

Balance at December 31, 1993
(unaudited)                                            --         --           978           1     108,291    (171,352)         --

Net Loss                                               --         --          --          --          --       (40,337)         --
                                                   --------   --------   ---------   ---------   ---------   ---------    ----------

Balance at December 31, 1994                           --         --           978           1     108,291    (211,689)         --

Issuance of stock for services                         --         --        48,200          48       3,676        --            --
Net Income                                             --         --          --          --          --        99,673          --
                                                   --------   --------   ---------   ---------   ---------   ---------    ----------

Balance at December 31, 1995
and 1996                                               --         --        49,178          49     111,967    (112,016)         --
</TABLE>




                                       F-5
<PAGE>

                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2004
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                           Deficit
                                                                                                                         Accumulated
                                                                                                                             Since
                                                                                                                          October 4,
                                                                                                                             2000
                                                                                                                        Inception of
                                             Preferred Stock            Common Stock            Paid-In     Retained     Development
                                            Shares    Par Value      Shares      Par Value      Capital      Deficit         Stage
                                         ----------   ----------   ----------    ----------    ----------   ----------    ----------
<S>                                      <C>          <C>          <C>           <C>           <C>          <C>           <C>
Issuance of stock for services                 --     $     --        157,143    $      157    $   36,473   $     --      $     --
Net Loss                                       --           --           --            --            --        (36,630)         --
                                         ----------   ----------   ----------    ----------    ----------   ----------    ----------

Balance at December 31, 1997                   --           --        206,321           206       148,440     (148,646)         --

Issuance of stock for services                 --           --        119,636           120        27,767         --            --
Net Loss                                       --           --           --            --            --        (27,887)         --
                                         ----------   ----------   ----------    ----------    ----------   ----------    ----------

Balance at December 31, 1998                   --           --        325,957           326       176,207     (176,533)         --

Return of shares to treasury                   --           --        (85,957)          (86)           86         --            --
Issuance of stock for services                 --           --      2,760,000         2,760       221,490         --            --
Net Loss                                       --           --           --            --            --       (224,250)         --
                                         ----------   ----------   ----------    ----------    ----------   ----------    ----------

Balance at December 31, 1999
as originally reported                         --           --      3,000,000         3,000       397,783     (400,783)         --

</TABLE>



                                     F - 6
<PAGE>

                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2004
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                           Deficit
                                                                                                                         Accumulated
                                                                                                                           Since
                                                                                                                         October 4,
                                                                                                                           2000
                                                                                                                        Inception of
                                            Preferred Stock            Common Stock           Paid-In      Retained     Development
                                          Shares    Par Value      Shares      Par Value      Capital       Deficit        Stage
                                       ----------   ----------   ----------    ----------    ----------    ----------    ----------

<C>                                    <C>          <C>          <C>           <C>           <C>           <C>           <C>
50:1 reverse stock split                     --     $     --     (2,940,000)   $   (2,940)   $    2,940    $     --      $     --
4:1 forward stock split                      --           --        180,000           180          (180)         --            --
                                       ----------   ----------   ----------    ----------    ----------    ----------    ----------
Restated balance at December 31,
                                1999         --           --        240,000           240       400,543      (400,783)         --

Issuance of stock for cash                   --           --     14,300,000        14,300        60,700          --            --
Issuance of stock for services               --           --      8,000,000         8,000        82,000          --            --

Net Loss                                     --           --           --            --            --        (135,905)      (44,357)
                                       ----------   ----------   ----------    ----------    ----------    ----------    ----------

Balance at December 31, 2000                 --           --     22,540,000        22,540       543,243      (536,688)      (44,357)

Net Loss                                     --           --           --            --            --            --          (5,777)
                                       ----------   ----------   ----------    ----------    ----------    ----------    ----------

Balance at December 31, 2001                 --           --     22,540,000        22,540       543,243      (536,688)      (50,134)

Contributed Capital                          --           --           --            --          21,039          --            --
                                       ----------   ----------   ----------    ----------    ----------    ----------    ----------
</TABLE>


                                      F - 7
<PAGE>

                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2004
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                           Deficit
                                                                                                                         Accumulated
                                                                                                                           Since
                                                                                                                         October 4,
                                                                                                                           2000
                                                                                                                        Inception of
                                            Preferred Stock            Common Stock           Paid-In      Retained     Development
                                          Shares    Par Value      Shares      Par Value      Capital       Deficit        Stage
                                       ----------   ----------   ----------    ----------    ----------    ----------    ----------

<C>                                    <C>          <C>          <C>           <C>           <C>           <C>           <C>
Balance at December 31, 2002                 --     $     --     22,540,000    $   22,540    $  564,282   $ (536,688)   $  (50,134)

December 31, 2003, Shares
  Canceled                                   --           --     (9,538,000)       (9,538)        9,538         --            --

Contributed Capital                          --           --           --            --           6,976         --            --
Net Income (Loss)                            --           --           --            --            --           --          (7,902)
                                       ----------   ----------   ----------    ----------    ----------   ----------    ----------

Balance at December 31, 2003                 --           --     13,002,000        13,002       580,796     (536,688)      (58,036)

Issuance of stock for services               --           --      5,100,000         5,100        63,900         --            --
Stock exchanged for Kolt Oil                 --           --        150,000           150          --           --            --
Shares canceled with sale of AirGate         --           --     (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   $ (536,688)   $ (131,859)
                                       ==========   ==========   ==========    ==========    ==========   ==========    ==========
</TABLE>


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


                                       F-8

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                   Cumulative
                                                                                                                     Since
                                                                                                                    October 4,
                                                                                                                      2000
                                                                                 For the Year Ended               Inception of
                                                                                    December 31,                  Development
                                                                        -------------------------------------
                                                                               2004                2003              Stage
                                                                        ------------------   ----------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                     <C>                  <C>               <C>
Net Income (Loss)                                                       $          (73,823)  $         (7,902) $         (131,859)
Adjustments to reconcile net loss to net cash
   Provided by operating activities:
Stock Issued for Services                                                            4,150                  -               4,150
Net Loss from Discontinued Operations                                               58,315                  -              58,315
Increase (Decrease) in Accounts Payable                                             41,366                926              71,387
                                                                        ------------------   ----------------  ------------------

Net Cash Used in Operating Activities                                               30,008             (6,976)              1,993
Net Cash From Discontinued Activities                                                6,685                  -               6,685
                                                                        ------------------   ----------------  ------------------

Net Cash Used in Operating Activities                                               36,693                  -               8,678
                                                                        ------------------   ----------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Oil & Gas Exploration Costs                                                        (36,878)                 -             (36,878)
                                                                        ------------------   ----------------  ------------------

Net Cash Provided by Investing Activities                                          (36,878)                 -             (36,878)
                                                                        ------------------   ----------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Capital Contributed                                                             5,087              6,976              33,102
                                                                        ------------------   ----------------  ------------------

Net Cash Provided by Financing Activities                                            5,087              6,976              33,102
                                                                        ------------------   ----------------  ------------------


Net (Decrease) Increase in
  Cash and Cash Equivalents                                                          4,902                  -               4,902
Cash and Cash Equivalents
  at Beginning of Period                                                                 -                  -                   -
                                                                        ------------------   ----------------  ------------------
Cash and Cash Equivalents
  at End of Period                                                      $            4,902   $              -  $            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-9

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   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  $132,000  for the  period  from  October  4, 2000  (inception  of
development stage) to December 31, 2004, 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
its minimal operating expenses.

         The  Company's  future  capital  requirements  will  depend on numerous
factors including, but not limited to, its acquisition,  rework, development and
production of current and additional oil and gas producing properties.

         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-10

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   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.

         On January 15, 2002,  the Company  merged with WEBiX,  Inc. This merger
resulted in the Company  acquiring  the business  and  operations  of WEBiX,  in
exchange for the issuance by the Company of a controlling interest in its shares
to the former  shareholders of WEBiX. On March 13, 2003, the Company repurchased
its shares and disposed of WEBiX and reentered the development stage.

         On February  9, 2004,  the Company  formed a wholly  owned  subsidiary,
AirGate  Technologies,  Inc. Subsequently on September 30, 2004 the Company sold
100% of its ownership in the Company to Michael Sheriff.

         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  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 & 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

                                      F-11

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Company issued 150,000  shares to acquire the Texas  operator's  license for oil
and gas properties of Kolt Oil and Gas.

Nature of Business

         On February  9, 2004,  the Company  formed a wholly  owned  subsidiary,
AirGate  Technologies,  Inc., for the purpose of engaging in the development and
acquisition   of   leading-edge   wireless   internet/networking   technologies,
principally RFID ("radio frequency  identification").  In June 2004, the Company
formed two wholly owned subsidiaries, Innovative Telecommunication Technologies,
Inc. (ITT) and OIL ID Systems,  Inc. The VoIP telephone systems being offered by
the Company's ITT subsidiary allow  traditional  carriers and new voice entrants
to build large  distributed  VoIP  networks  without  central  office  equipment
investment and  architecture.  The system is virtually a "plug-in"  installation
working with either  LAN-based  VoIP phones or PC-based  softphones.  Demand for
radio  frequency  identification  solutions  by energy  producers  and oil field
service  companies  led the Company to create OIL ID Systems as a compliment  to
its wholly owned subsidiary, AirGate Technologies,  Inc. The level of demand for
RFID systems in producing oil fields around the world is on the rise, and OIL ID
Systems  will  assist  AirGate  Technologies  in  developing   applications  and
aggressively capturing market share within this growing RFID market niche. As of
December 31, 2004, OIL ID Systems  changed its name to Curado Energy  Resources,
Inc.

         On September  30, 2004,  the Company  decided that the business plan of
AirGate could not be advanced and decided to  discontinue  its efforts with this
plan and disposed of AirGate.

         In connection  with a share  purchase  agreement with Kolt Oil and Gas,
the Company decided to look into the oil and gas industry. The Company's primary
objective is to identify,  acquire,  and develop working interest percentages in
smaller,  underdeveloped  oil and gas  projects  in  Texas  that do not meet the
requirements of the larger producers and developers.

Principals of Consolidation

         The  consolidated  financial  statements  include the  accounts for The
X-Change Corporation and its wholly owned subsidiaries Kolt Oil & Gas 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.  On September 30, 2004, the AirGate  Technologies was sold
and thus is not included in the consolidation.


                                      F-12

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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.

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.







                                      F-13

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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,  2004,  the  Company  had a  net  operating  loss
carryforward for income tax reporting  purposes of  approximately  $669,000 that
may be offset against future taxable income through 2024. 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 - DEVELOPMENT STAGE COMPANY/GOING CONCERN

         The Company has just commenced its intended principal operations and as
is common with a development  stage of oil and gas  extraction,  the Company has
had  recurring  losses.  Continuation  of the  Company  as a  going  concern  is
dependent  upon  obtaining  the  additional  working  capital  necessary  to  be
successful  in its  planned  activity,  and the  management  of the  Company has
developed a strategy,  which it believes will accomplish this objective  through
current  oil and  gas  production,  additional  equity  funding  and  long  term
financing, which will enable the Company to operate for the coming year.

NOTE 4 - COMMITMENTS

         As of December  31,  2004,  all  activities  of the  Company  have been
conducted by  corporate  officers  from either their homes or business  offices.
Currently,  there are no  outstanding  debts owed by the  company for the use of
these facilities and there are no commitments for future use of the facilities.

                                      F-14

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - 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, 2004, there are no preferred shares issued.

NOTE 6 - 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 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.




                                      F-15

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - OIL AND GAS ACTIVITIES

         As of December  31,  2004,  the Company had net revenues of $8,247 from
its proven reserves in the East Texas property.

         As of December 31, 2004,  $36,878 has been  capitalized  in  connection
with the exploration of unproven properties.

NOTE 8 - CONTINGENCIES

         On September 30, 2004,  the Company  entered into a recision  agreement
with Michael  Sheriff and AirGate  Technologies,  Inc.  whereby 100% of AirGates
stock owned by X-Change Corporation would be sold to Michael Sheriff in exchange
for the return of 3,500,000 common shares of X- Change  Corporation's  stock. As
part of the purchase  price,  X-Change  Corporation is entitled to 15 percent of
the  net  proceeds  resulting  from  contracts  with  Standard  Motor  Products,
Medtronics - Cranial and Spinal Division,  Borden Chemical and proceeds from the
sale or license of the Child Safety Seat technology.

NOTE 9 - MERGER/ACQUISITION

         On January 15,  2002,  the Company and its newly  created  wholly owned
subsidiary  X-Change  Technologies  Corp,  merged  with  WEBiX,  Inc. (a Florida
Corporation).  As a result,  the Company acquired the business and operations of
WEBiX,  in exchange for the issuance of a  controlling  interest in The X-Change
Corporations'  shares to the  former  shareholders  of WEBiX.  Under the Plan of
Merger,  24,000,000  shares  of  Common  Stock,  4,000,000  shares  of  Series A
Convertible Preferred Stock (convertible into 40,000,000 shares of Common Stock)
and 40,000,000 warrants were issued. In addition,  certain existing shareholders
of the Company  surrendered  approximately  9,500,000  shares of Common Stock to
treasury.  In  connection  with  this  merger,  the par  value  of the  Series A
Convertible Preferred Stock changed from $.01 to $.001.

         On March 13, 2003,  the Company  rescinded its agreement  with X-Change
Technologies.  The  rescission,  essentially,  resulted  in  the  return  of all
X-Change  Corporation's  assets in exchange for the surrender of all  securities
held by the former X-Change Technologies shareholders in the







                                      F-16

<PAGE>


                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - MERGER/ACQUISITION (Continued)

Company and the assumption by X-Change  Technologies  Corp. of all the Company's
debt immediately prior to closing.  The rescission  effected a change in control
over the  business,  policies  and  affairs  of the  Company  from the  X-Change
shareholders to those  shareholders  holding  securities in the Company prior to
January 15, 2002. As a result,  15,062,000  shares of common stock and 5,000,000
shares of  preferred  stock  were  returned  to  treasury  and the  Company  had
22,540,000 shares of common stock, which was the amount outstanding  immediately
prior to closing of the X- Change Technologies Corp.  acquisition on January 15,
2002. All lock-up agreements  pertaining to these shares were released effective
with the closing.

         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.







                                      F-17

<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 13, 2005        By:/s/ Charles Stidham
                             -----------------------------------------
                             Charles Stidham, President and Chief
                             Executive Officer
                             (Principal Executive Officer)



Dated: April 13, 2005        By:/s/ Scott Thompson
                             -----------------------------------------
                             Scott Thompson, Chief
                             Financial Officer
                             (Principal Financial Officer)