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 31,2003

[ ]      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                                 43-1594165
---------------------------------------     ------------------------------------
(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) 390-0750
                (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:  $0.

As  of  December  31,  2003,  there  were  13,002,000  shares  of  Common  Stock
outstanding,  of which all were held by  non-affiliates.  The  aggregate  market
value of such Common  Stock  (based upon the average of the bid and asked prices
on December 31, 2003) of the Registrant held by non-affiliates was approximately
$650,100. As of December 31, 2003.

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>                                                                         <C>
ITEM  1. Description of Business...................................................3

ITEM  2. Description of Property...................................................4

ITEM  3. Legal Proceedings.........................................................4

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

                                     PART II

ITEM  5. Market for Common Equity and Related Stockholder Matters..................4

ITEM  6. Management's Discussion and Analysis or Plan of Operation.................5

ITEM  7. Financial Statements.....................................................13

ITEM  8. Changes in and Disagreements With Accountants on Accounting
         and Financial Disclosure.................................................13


                                    PART III

ITEM  9. Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16 (a) of the Exchange Act.......................13

ITEM 10. Executive Compensation...................................................17

ITEM 11. Security Ownership of Certain Beneficial Owners and Management...........17

ITEM 12. Certain Relationships and Related Transactions...........................18

ITEM 13. Exhibits and Reports on Form 8-K.........................................18

ITEM 14. Controls and Procedures..................................................19

ITEM 15. Principal Accountant Fees and Services...................................20

Signatures........................................................................22
</TABLE>




<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


         On January 15, 2002,  the Company closed under an Agreement and Plan of
Merger with WEBiX, a privately held Delaware corporation (the "Plan of Merger"),
which resulted in WEBiX becoming a wholly owned  subsidiary of the Company.  The
Plan of 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. After closing,  the shareholders
of the Company elected a new board of directors,  which, in turn,  appointed new
executive officers for the Company.

         The Company  acquired the business and  operations  of WEBiX by issuing
(a) 24,000,000 shares of its Common Stock to the common shareholders of WEBiX on
a pro rata basis,  (b) 4,000,000  shares of its Series A  Convertible  Preferred
Stock and (c) 40,000,000  warrants to the  shareholders  of WEBiX' on a pro rata
basis. Immediately prior to closing certain existing shareholders of the Company
surrendered  approximately  9,500,000  shares of Common  Stock of the Company to
treasury,  which reduced the number of outstanding shares of Common Stock of the
Company  immediately  prior to  closing to  13,002,000.  Following  closing  the
Company had outstanding  37,002,000 shares of Common Stock,  4,000,000 shares of
Series A Convertible  Preferred  Stock (which are  convertible  into  40,000,000
shares of Common Stock) and 40,000,000 Warrants.

         On Dec  23,  2002,  the  company  mailed  all  shareholders  a  Consent
Solicitation  for the purpose of entering  into and closing  under a  Securities
Repurchase  Agreement  that,  effectively,  proposed an unwinding of the Plan of
Merger.

         The  solicitation  received  the  requisite  number of consents and all
conditions precedent to closing were subsequently fulfilled.  The parties closed
under the Securities Repurchase Agreement on March 13, 2003. The former board of
directors resigned effective the closing date.

         The Repurchase,  essentially,  resulted in the return of the all of The
X-Change  Corporation's  assets in exchange for the surrender of all  securities
held by the former WEBiX  shareholders  and the  assumption  by WEBiX 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 WEBiX
shareholders to those  shareholders  holding  securities in the Company prior to
January 15, 2002.  After the  rescission was complete the Company had 22,540,000
shares of common stock,  which was the amount  outstanding  immediately prior to
closing of the Plan of Merger on January 15, 2002 and is essentially in the same
position as it was before the merger. All lock-up agreements pertaining to these
shares were released at closing.  The common  shares are the only  securities of
the Company now outstanding.


ITEM 2   description of PROPERTy

         The executive office of the Company,  as of the date of this report, is
located at 100 Allentown  Parkway,  Suite 110, Allen,  TX 75002.  The Company is
receiving  the use of these  premises  free of charge  from its  President.  The
telephone number at this address is (972) 390-0750.


ITEM 3   LEGAL PROCEEDINGS

         There are no pending legal  proceedings to which the Company is a party
or of 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

         In accordance  with Nevada  corporate law, no matters were subject to a
vote of security holders during the year ended December 31, 2003.


                                     PART II

item 5   MARKET FOR COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

Principal Market and Sales Prices for Company's Common Stock

         As of December 31, 2003,  there were 13,002,000  shares of Common Stock
of the  Company  issued  and  outstanding  which  were  held  of  record  by 218
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
December 31, 2003, there were no shares of Preferred Stock of the Company issued
or outstanding.

         The Company's 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.

       -------------------------------------------------------------------
                                Fiscal Year            Fiscal Year

                                   2002                    2003
                                   ----                    ----
        -------------------------------------------------------------------
                            High         Low        High        Low
       -------------------------------------------------------------------
       First Quarter       $0.70       $0.10      $0.08       $0.04
       -------------------------------------------------------------------
       Second Quarter      $0.35       $0.07      $0.20       $0.05
       -------------------------------------------------------------------
       Third Quarter       $0.07       $0.05      $0.19       $0.07
       -------------------------------------------------------------------
       Fourth Quarter      $0.07       $0.03      $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.

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  of WEBiX was unwound on March 13, 2003. 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 its operations in
an orderly fashion.

Formation of AirGate Technologies and Entry into RFID Market:

         On February 9, 2004,  registrant,  The X-Change  Corporation,  a Nevada
corporation  ("XCHC"),  formed a wholly owned subsidiary,  AirGate Technologies,
Inc. ("AirGate"), for the purpose of engaging in the development and acquisition
of leading-edge  wireless  internet/networking  technologies,  principally  RFID
("radio frequency identification").  AirGate is proposing to market products and
services of unsurpassed convenience,  performance, reliability and value in this
industry in order to provide  customers with innovative  wireless RFID solutions
at a cost substantially lower than current implementations.

         Of the many technologies currently undergoing  development,  management
feels wireless technologies,  including RFID, qualify as the most likely to have
a transformative effect on business in the near-term,  essentially  transforming
how business  operates and organizes.  Wireless  technologies  will generate not
only new consumer and business  products  but also  entirely new  categories  of
products and services.

         Wireless  technologies  are  currently   transforming  the  culture  of
industrialized  countries and have the  potential to do the same for  developing
and  undeveloped  regions  of  the  world.  The  migration  to  third-generation
cellular-phone technologies,  proceeding in fits and starts and at various rates
throughout the world, continues to change how people communicate.  RFID tags are
optimizing  business supply chains.  A plethora of wireless  local-area  network
(WLAN)  standards  compete  for market  share in a variety of  applications  and
niches as newcomers such as ultrawideband applications continue to be developed.
The rapid market acceptance of cellular phones and WLANs,  including  "hotspots"
has focused attention on the viability of traditional  telecom providers and the
cost of wireline technologies.

         Concurrent with the formation of AirGate,  Mr. Mike Sheriff was engaged
by XCHC and AirGate to act as their Chairman of the board of directors and chief
executive  officer,  president and treasurer.  Mr. Sheriff,  in exchange for his
services,  has received an option to purchase up to 12,000,000  shares of common
stock at the market  therefore on the date of his engagement.  These options and
the  underlying  shares  are not  registered.  The share  structure  of XCHC was
adjusted  by  several  shareholders  so that the  number of  shares  outstanding
immediately  prior to the formation of AirGate was brought down to 13,002,000 in
number.

Industry Analysis: RFID:

         Radio frequency identification (RFID) and Electronic Product Code (EPC)
technologies are being implemented to improve supply chain efficiency and reduce
shrinkage by providing more accurate tracking of goods and assets throughout the
chain.  RFID are  being  used to  replace  the bar  codes  now used to  identify
products.  Many large retailers,  including  Wal-Mart,  have recently  announced
their intentions to move over to RFID technology in the near future. RFID allows
these  companies to track their  products using  radio-frequency  identification
tags that can be scanned by radio waves at any time. Recently,  there has been a
groundswell of RFID-related products and services from IT providers.  Microsoft,
Intel, IBM and Sun Microsystems  have joined vendors such as Texas  Instruments,
Symbol  Technologies,  NCR,  Accenture  and  Bearing  Point  in  advocating  the
technology as the solution for optimizing supply chain operations.

         An RFID tag is a chip that,  even in its simplest  form, is superior to
standard bar codes. It can contain  information  such as a product's  expiration
date and  temperature,  and it can be scanned  from a distance of up to 30 feet.
This makes it a lot easier for a retailer to find  products  in a warehouse  and
keep  track of  their  condition  -- big  advantages  when it comes to  managing
inventory.

         Management  believes  2004 will be a crucial  year for radio  frequency
identification  (RFID), with large-scale  deployments bringing the controversial
technology  into the  mainstream.  Manufacturers  and  distributors  of RFID are
working to meet the requirements of high-profile  deployments from organizations
including Wal-Mart and the US Department of Defense, according to IDC.

         Normally,  innovations in the retail industry and Department of Defense
do not typically converge.  However, the Radio Frequency  Identification  (RFID)
technology  is  creating  precisely  the  convergence  that is about to create a
unique set of business opportunities.  The Retail Industry and the Department of
Defense,  constitute the largest global entities,  procuring  thousands of parts
and supplies.  Both  `industries'  have mandated that RFID technology  become an
inherent part of their operations. With such a large, organized and funded push,
RFID is slated to become the `e-barcode', the electronic barcode of the future.

         Numerous  `drivers'  are  motivating  a change  of this  magnitude,  to
enumerate a few:  accurate  and  automated  inventory  management,  accurate and
secure shipping,  track and trace,  along with  comprehensive Home Land Security
management and tracking.

         Three  powerful,  compelling  and  disruptive  forces are converging to
propel  us to an RFID  enabled  world:  the  build-out  of  ubiquitous  wireless
networks,  the absolute needs of Homeland  Security and the mandates from deeply
funded entities:  Department of Defense and WalMart, the largest retail chain in
the world.

         RFID may lead to a universal  identifier;  wherein distinct  `entities'
ranging from humans - RFID embedded driver  license,  a can of Campbell soup, or
airline  travel  tickets  or  individualized  and  customized  drug-prescription
formulation and dispensing, have embedded RFID technology.

         The simplicity of and Zero-power  requirement of an RFID electronic tag
has  made it  technically  and  financially  feasible  to  usher  in a world  of
universal identification.

         As a result, of the oncoming RFID tsunami,  business  opportunities are
being  created in  multiple  and  diverse  vertical  industries:  from  wireless
`sensors' to high-speed  data links to RFID tag  fabrication  and finally to the
computer systems that will be needed to `ingest' vast amounts of scan data, that
has never before existed,  and moreover,  integrate and evolve current  business
systems.

         Once  retailers get involved,  the number of tags in use will jump from
the millions to billions,  predicts Bill Allen, a marketing manager at TI, which
has sold RFID chips for 15 years. "The supply chain has long been considered the
holy  grail for RFID," he says.  That  explains  why the $1  billion  market for
RFID-specific hardware,  software, and services could balloon to $3.2 billion by
2008, says Erik  Michielsen,  senior analyst at tech consultancy ABI Research in
Oyster Bay, N.Y.

         New technologies  must be invented,  adapted,  and marketed in order to
gain mind-share,  customer-share and revenue share. A strong cycle of innovation
is about to be unleashed that will inevitably create a long, sustained period of
business acquisitions of fast moving, young start-up technology savvy companies.

         The analyst  group of IDC predicts that RFID spending for the US retail
supply  chain will grow from $91.5  million  in 2003 to nearly  $1.3  billion in
2008. The IDC study,  US RFID for the Retail Supply Chain Spending  Forecast and
Analysis,  2003-2008  expects hardware  purchases to dominate RFID spending over
the forecast  period,  reaching  $875 million in 2007.  Software  spending  will
accelerate in the second half of the forecast  period as more and more companies
feel the need for RFID middleware, an Airgate strong point.

AirGate's Business Model:

Key Business Differentiators:

         Airgate   Technologies'   business   model   consists  of  several  key
differentiators  that, management feels, will set it apart from its competition.
Airgate  Technologies'  focus is to create long-term  shareholder  value by: (1)
Pursuing intelligent, opportunistic acquisitions of other wireless opportunities
whose  business  plan  and  operations  are  complementary;   (2)  Consolidating
redundant  functions,  such as network  operations,  billing and  accounting and
customer  support;   standardizing  on  technology  and  selected  vendors;  (3)
Partnering  with  wireless  and  RFID  solution  providers,  both  hardware  and
software;  (4) Partnering with industry  organizations,  highlighting  AirGate's
wireless solutions; and (5) Building a recognizable brand identity.

Because of current RFID mandates from diverse sources, such as retailer WalMart,
the Department of Defense, and the expected surge of RFID deployments, a process
to ingest  data,  understand  data,  present data and detect  non-compliance  is
required.  This occurs in the real-time world of RFID. It is AirGate's intent to
create a core 'matrix analytic  engine,' an (MAE) that can be customized for the
unique  requirements  of various  vertical  industries,  retail,  manufacturing,
health, etc. AirGate will rely upon its extensive database and telecommunication
competencies,  plus its offshore capability to provide unparalleled services and
capabilities to analyze, interpret and manage complex data.

Wireless Connectivity:

         AirGate will offer,  for purposes of employing  its RFID  solutions,  a
wireless,  high-speed  alternative  to the costly and time  consuming DSL, ADSL,
cable modem, and T-1 plans in use today,  implementing the 802.11b and 802.11a/g
WiFi standard and gravitating to and implementing the 801.16a standard.  WiFi is
an open standard that enables  wireless  connectivity  with a local area network
and/or high-speed access to the Internet.  Like other dislocating  technologies,
WiFi is pervading wireless applications.

         Because  of the  growing  pervasiveness  of the  technology,  AirGate's
technological innovations in RFID can be immediately deployed.

Advantages:

Mobility:

         Wireless  LAN and RFID  implementation  provide  users  with  access to
real-time  information  anywhere in their  organization.  This mobility supports
productivity  and service  opportunities  not possible  with a wired network and
barcodes.

Installation Speed, Simplicity and Flexibility:

         Installing a wireless LAN system is  comparatively  less time consuming
and  difficult  and  reduces  costs  50 to 80  percent  over  traditional  wired
solutions.  Companies  can  eliminate  the need to pull cable  through walls and
ceilings.  Wireless  technology  allows the network to go where wires cannot go.
The  LAN/Internet  can now be  accessed  from all over the  building,  corporate
campus or user  environment.  Relocation  of employees  within a facility  takes
minutes instead of days to complete. Productivity is enhanced.

Reduced Cost-of-Ownership:

         In most cases, the initial investment required for 802.11a/b/g Wireless
hardware is no higher than the cost of wired LAN hardware.  In  additional,  the
overall  installation  expense and life cycle costs can be significantly  lower.
Long-term  cost  benefits  are the  greatest in dynamic  environments  requiring
frequent moves and changes.  This is especially  applicable to RFID deployments.
The low cost of the wireless  technology  and the expected rapid decline in RFID
as standards formalize makes upgrades easier for the Company as improvements are
made in  hardware.  The high cost of  infrastructure  for the  larger  companies
inhibits their ability to modify their systems.

Scalability:

         Wireless  LAN/Internet access systems can be configured in a variety of
topologies to meet the needs of specific applications and installations of RFID.
Configurations are easily changed and range from peer-to-peer  networks suitable
for a small  number of users to full  infrastructure  networks of  thousands  of
users  roaming  over a broad  area,  as in open  campus  environments  or  large
production facilities.

Ease of Use:

         Users are logged on to the LAN/Internet  with the usual familiar access
protocols, so using the LAN/Internet is easy with the appropriate WiFi tools.

Wireless LAN Benefits for RFID Implementation:

         AirGate has chosen to build its  wireless  solution on the  802.11a/b/g
with 802.16a support because it offers numerous advantages including:

o        High-speed data transmission for large files and graphics

o        Standards-based solution supported by major PC and networking vendors

o        Ability to use standard laptops, browsers and applications

o        Wide  availability  of  low-cost,   802.11a/b  wireless  network  cards
         ($150-250;  available from Lucent,  Cisco,  3Com,  online retailers and
         others)

o        Large coverage  areas--one  access point covers 20,000 to 50,000 square
         feet

o        802.16 up to 30 miles non line of sight

o        Ease of installation and use

o        Applicability  across many environments  including  hospitality/travel,
         corporate, retail,  manufacturing and residential;  applications can be
         mixed to maximize  utilization  of coverage  area - an  important  RFID
         consideration

o        License free, no fees, no tariffs; no "last mile.

Typical Applications:

         WiFi  liberates  users  from  dependence  on  hard-wired  access to the
network backbone;  giving them anytime, anywhere network access. This freedom to
roam offers numerous user benefits for a variety of work  environments.  RFID in
conjunction with wireless networking helps link factory buildings on the outside
and  factory  floor  workstations  and data  collection  devices on the  inside;
improving  database  access  for  roving  supervisors  such as  production  line
managers,  warehouse auditors, or construction engineers. In warehouses,  mobile
stock and inventory  personnel can use mobile,  forklift  mounted data terminals
and notebook computers to receive and update stock and inventory information and
update and maintain location of stock, pallets and boxes with RFID. RFID enables
real-time inventory tracking and reduces the costs of physical inventory counts.

Transportation/Distribution:

         As suggested  earlier,  RFID systems are uniquely suited for use in the
rigorous  rail  environment.  Field  programmable  tags permit the full industry
standard  12-character  identification of each car by type, ownership and serial
number. Tags are attached to the vehicle  undercarriage;  antennae are installed
between or adjacent to the tracks,  and readers or display devices are typically
located  within 40 to 100 feet in a wayside  hut along  with other  control  and
communications  equipment.  A  primary  objective  in rail  applications  is the
improved fleet utilization that permits reductions in fleet size and/or deferral
of investment in new equipment.

         Commercial truckers are using RFID systems to monitor access and egress
from terminal facilities. Combined with weigh-in-motion scales, the same systems
can be used for transaction  recording at refuse dumps,  recycling plants, mines
and similar  operations,  or for credit  transactions  at truck stops or service
depots.

Industrial:

         In the plant  environment,  RFID  systems  are  ideally  suited for the
identification  of  high-unit-value  products  moving  through a tough  assembly
process (e.g., automobile or agricultural equipment production where the product
is cleaned,  bathed,  painted and baked).  RF systems also offer the  durability
essential for permanent identification of captive product carriers such as:

         Tote boxes,  containers,  barrels,  tubs,  and pallets;  Tool carriers,
         monorail  and  power,  and free  conveyor  trolleys;  and Lift  trucks,
         towline carts, and automatic guided vehicles.

Primary applications fall into two basic categories:

1. Direct product  identification  wherein the tag  specifically  identifies the
item to which it is attached  (e.g.,  by part number or serial number or, in the
case of read/write systems, assembly or process instructions for the item).

2. Carrier  identification  where content is identified  manually (or with a bar
code  reader)  and  fed  to  the  control   system  along  with  the   carrier's
machine-readable  RF "license plate number."  Strategically  deployed RF readers
accomplish subsequent load tracking.

         The  automotive  industry uses RFID systems to track  vehicles  through
assembly, where tags must perform even after repeated subjection to temperatures
of 150 to 200 C, painting, etc. A primary objective for use of the technology in
this environment is verification of vehicle identity prior to execution of given
assembly  tasks.  Although  manufacturers  sequentially  track vehicles  through
assembly, undetected removal of a single vehicle from the line could be costly.

         Because  RFID tags  need not be  "seen" to be read,  they can be buried
within pallets,  tote boxes, and other containers and provide solid  performance
for the life of the carrier.  As an example,  in a casting operation RF tags are
attached to wire baskets which travel through a variety of  degreasing,  etching
and cleaning  tanks by means of an overhead  power and free conveyor - not a job
for optical or magnetic identification media.

         In a manner similar to carrier identification,  RF tags can be used for
tool management. Miniature tags can be placed within tool heads of various types
such as block or Cat  V-flange,  or even  within  items such as drill bits where
individual bits can be read and selected by reader guided robot arms.

         RFID systems are used for lift truck and guided vehicle  identification
in a number of  installations.  One approach buries tags at strategic  locations
throughout the facility and verifies  vehicle  location via on-board  DC-powered
readers.  Other users station readers at the ends of warehouse aisles to monitor
lift  truck  activity.  Here,  throughput  rates  permit  multiplexing  multiple
antennae per reader.

Security and Access Control:

         The movement and use of valuable equipment and personnel  resources can
be monitored through RF tags attached to tools,  computers,  etc. or embedded in
credit-card-size security badges. This type of monitoring also provides an extra
measure of  security  for  personnel  working in  high-risk  areas in case of an
emergency evacuation.

Animal Identification:

         Valuable  breeding stock,  laboratory  animals  involved in lengthy and
expensive research projects,  meat and dairy animals,  wildlife, and even prized
companion animals all present unique identification  problems that can be solved
by innovative applications of RFID technology.


Results of Operations.

         There were no revenues from sales for the two years ended  December 31,
2003 and 2002. The Company has sustained a net loss of approximately  $7,902 for
the year ended  December 31, 2003,  which was due to general and  administrative
expenses incurred by the Company. 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  generates and uses cash through  operating  activities and
financing activities.  During the year ended December 31, 2003, the Company used
cash of  approximately  $6,976 for operating  activities.  Operating  activities
during the 2003 year were comprised primarily of organizational  activities with
business operations.

         The Company  generated cash from financing  activities of approximately
$6,976, which is primarily due to capital contributed by a shareholder

         As of December 31, 2003, the Company had working  deficit of $926 and a
total asset value of $0.


ITEM 7   FINANCIAL STATEMENTS

         The  financial  statements of the Company as of and for the years ended
December 31, 2003 and December 31, 2002 are included  immediately  following the
signature page to this Report beginning at page F-1.



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

         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>
Michael Sheriff                                           58              President, CEO, Treasurer and Chairman of
                                                                                          the Board
---------------------------------------------- ------------------------- ---------------------------------------------
Tom Tucker                                                42                     Vice President of Operations
---------------------------------------------- ------------------------- ---------------------------------------------
Ivan Chow                                                 38                 Vice President of Software Solutions
---------------------------------------------- ------------------------- ---------------------------------------------
Frank Kwong                                               55                            Advisory Board
---------------------------------------------- ------------------------- ---------------------------------------------
</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.

mICHAEL SHERIFF, 58, Chairman, President & CEO, Treasurer

         Michael Sheriff,  president and chief executive officer of the X-change
Corporation,  has over  twenty-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.  YPAY
utilized a patented message delivery system that supports true 1:1 targeting and
allows local businesses,  not just large multinational  advertisers,  to harness
the power of the Internet with multi-media and market-targeting capabilities not
available  in any  other  advertising  medium.  YPAY was able to  eliminate  the
problems associated with traditional web site, browser-based advertising.

         In 1995, Mr.  Sheriff  founded  CyberQuest -- a  full-service  Internet
development  company  --  focusing  its  efforts  on  Internet  commerce  in the
business-to-consumer  and  business-to-business  marketplaces.  The company also
developed, implemented and maintained creative business Web sites, Intranets and
databases for client companies.  Under Mr. Sheriff's  leadership,  the company's
Internet  e-commerce  flagship,  bid4it,  as well as its other e-commerce sites,
were  developed to bring  shopping  directly into  customers'  homes and offices
utilizing a revolutionary new  "bid-and-ask"  matching  technology.  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.
According to Point Communications,  an Internet survey group, GSC was one of the
top five retail sites on the Internet in 1994.  Internet  Marketing  Association
awarded GSC the top retail site award for December  1995.  GSC was also featured
on the Discovery Channel in December 1996.

         Mr. Sheriff is also the former founder, President and CEO of Action Fax
International,  Inc.  Action Fax operates one of the largest public fax 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. Mr. Sheriff
attended  the  University  of Denver  School of  Business,  where he  majored in
finance and business law.

TOM TUCKER, 42, VICE PRESIDENT OF OPERATIONS

         Tom Tucker has been involved with Internetworking technologies for over
15 years,  most  recently as a Senior  Internet  Systems  Engineer with Genuity,
formerly  known as GTE  Internetworking  and BBN.  While at Genuity he  provided
technical  both  pre- and  post-sales  support  on IP  solutions  to  customers,
architecting  IP  technology  solutions  that  leveraged  Internet  technologies
including   secure  eBusiness   hosting,   dedicated   connectivity,   broadband
connectivity,  remote access, managed firewall and Virtual Private Networks. Tom
has been instrumental in developing  Genuity's Virtual Internet Service Provider
platform and closing many large multi-million dollar sales.

         Prior  to  Genuity,  Tom  was an  Internetworking  Architect  and  then
Director  of  Intranet  Engineering  for  Associates  Information  Systems,  the
information  technology division of Associates First Capital, a $12B diversified
financial services organization  recently acquired by Citigroup.  While with the
Associates,  Tom  was  instrumental  in the  acceptance  and  implementation  of
Internet and Intranet solutions  throughout the company. Tom directly managed or
coordinated all Intranet development and implementation projects and established
technology standards for internal web platforms and applications.

         Prior to the Associates,  Tom was Chief  Operating  Officer for Private
Networks,  Inc., PNI. PNI leveraged  Internet  technologies to provide  Extranet
services for affinity groups and trade  associations.  These Extranets  provided
global  Internet  access and secured  Web based  communities  for  communication
between the affinity group and its membership and suppliers of goods and service
to those members.

         Prior to PNI, Tom was a Senior Technical Architect for SHL Systemhouse,
where he planned and  managed  systems and  network  integration  projects.  Tom
worked  directly with customers to define business  requirements  and strategies
for designing and developing integrated  client/server solutions based upon open
systems  architectures.  Tom also worked with the sales  organization to develop
persuasive  proposals of targeted  technology  service  offerings in response to
customer requests.

Prior to SHL,  Tom  spent  five  years  with GTE  Directories  in  progressively
responsible positions.  He joined GTE Directories as a Systems Analyst providing
UNIX  systems  administration  and  application  support.  Mr.  Tucker  attended
Southern  Methodist  University  in Dallas for four  years,  where he majored in
business and economics.


 IVAN CHOW, 38, VICE PRESIDENT SOFTWARE SOLUTIONS

         Ivan Chow has developed and implemented  cutting edge software  systems
since  1990.  In  1996,  Mr.  Chow  founded  a  company,  which  was  called  IP
Communications,  and  developed  Voice  IP  gateway  over the  Internet.  As the
company's chief technical  officer,  he directed the company to develop and file
two patents on two technical  procedures.  Besides technical  details,  Mr. Chow
also managed the venture in business and technical process integration. In 1998,
IP  Communications  was  sold  to a  then  privately-held  company  called  Ramp
Networks, a Delaware corporation. The acquisition increased Ramp Networks' asset
value. After months of integration of IP Communications'  VoIP technology,  Ramp
Networks developed several VoIP related products,  including Voice over ISDN and
Voice over DSL.  Ramp  Networks  went on to an IPO in 1999 and was  acquired  by
Nokia in 2000.

         Before IP Communications,  Mr. Chow worked for Sprint beginning in 1994
and developed a middleware  system  called  Distributed  Computing  Architecture
(DCA). This middleware system, DCA, is still being used today within Sprint's IT
back-office,  connecting  Sprint's PCS and  Sprint's  Long  Distance  Division's
ordering  systems.  DCA shields the  enterprise  from  different  standards  and
systems. It allows distributed  transactions to go across heterogeneous  systems
-- MVS, AIX, HP-UX, Solaris and Windows-based systems.

         After  earning his MS degree in physics,  Mr. Chow  started  working in
1990 in a world-class  organization called  SuperConducting  Super Collider.  In
1993, he developed a Yahoo!-like  search engine within the organization only few
months after he was introduced to the WWW protocol in a seminar at Fermi Labs by
its creator,  Tim  Berners-Lee.  Together with the physicists,  Ivan developed a
real-time data collection system, processing data of petabyte range.

FRANK KWONG, 55, ADVISORY BOARD

         Originally  from Hong  Kong,  Frank  Kwong  immigrated  to the U.S as a
teenager. Mr. Kwong has had a life-long interest in computers, system design and
program development,  both as a user and hobbyist.  He achieved U.S. citizenship
and was educated as an engineer at the University of Minnesota. In 1976 he began
his career with the Donaldson Corporation as an industrial engineer.

         The Econotherm  Corporation  recruited Mr. Kwong in 1977. He was design
engineer for the company's heat exchanger program.  His responsibility  included
management of the FORTRAN-based computer design programs in an online time-share
environment.

         Mr.  Kwong  joined  the  Cabot   Corporation   in  the  alloy  products
fabrication  department as design  engineer in 1978. His primary  responsibility
was ASME coded design. He obtained his Professional Engineer license in 1979 and
was promoted to Engineering Manager.

         In 1982,  Mr. Kwong was employed by General  Motors' Delco  division as
project leader in semiconductor  equipment design. He was the system manager for
APPLICON CAD, a leading edge cad/cam development  system.  During this time, Mr.
Kwong formed Computer Accessory Technology,  which sold various TRS-80 products.
The company was formed and operated with the permission of General Motors.

         Mr.  Kwong served as a staff  engineer for GM in Detroit,  MI. in 1984,
where  he began  development  of  cutting-edge  computer  applications  in image
processing. Based upon needs he saw at GM, Mr. Kwong began development of ASP-db
and took  early  retirement  from GM in 1997.  He  formed  FK &  Associates  and
USIntertech,  Inc.  to market  ASP-db,  which was  launched  in  February  1998.
USIntertech is a technology service company maintaining a faculty of experienced
information  technology  professionals  who deliver results  through  technology
integration services. The Company is a provider of efficient database solutions.
With an  extensive  technology  background  involving  a number of  Fortune  100
telecommunications and manufacturing companies, USIntertech offers unrivaled and
deliverable solutions.

         Frank Kwong received his BSc in Mechanical Engineering in 1974, and his
MSc in 1976 from the  University  of  Minnesota.  He resides  with his family in
Plano, Texas.

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  has  not  paid,  nor  does it owe,  any  compensation  to
executive  officers for the year ended December 31, 2003. 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 Form 10-KSB, 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 December  31, 2003,  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.
<TABLE>
<CAPTION>
Name and address of Beneficial Owner                 Number of Shares (1)                Percent of Class
------------------------------------                 --------------------                ----------------

<S>                                                  <C>                                 <C>
Cynthia Jared                                                 1,520,000                          12%
7451 NE 7th CT
Boca Raton, FL 33487

Teresa McKee
Address Unknown                                               1,520,000                          12%

All directors and executive officers                          None                               0%
as a group (4 persons)
</TABLE>
----------------------
(1)      Based upon  13,002,000  shares of Common Stock  outstanding on December
         31, 2003.


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.

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.

32.1*    Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002.

* Filed herewith.

(b) Reports on Form 8-K filed in the fourth quarter of 2003

         There were no Form 8-K's filed  during the quarter  ended  December 31,
2003.

ITEM 14.  CONTROLS AND PROCEDURES

The  Company's  Chief  Executive   Officer  and  Chief  Financial  Officer  have
concluded,  based on an evaluation  conducted within 90 days prior to the filing
date of this  annual  report  on Form  10-KSB,  that  the  Company's  disclosure
controls and  procedures  have  functioned  effectively  so as to provide  those
officers the information necessary whether:

                  (i) this  annual  report on Form  10-KSB  contains  any untrue
                  statement of a material fact or omits to state a material fact
                  necessary  to  make  the  statements  made,  in  light  of the
                  circumstances  under  which such  statements  were  made,  not
                  misleading  with respect to the period  covered by this annual
                  report on Form 10-KSB, and

                  (ii) the financial statements, and other financial information
                  included in this annual report on Form 10-KSB,  fairly present
                  in all material respects the financial  condition,  results of
                  operations  and cash flows of the Company as of, and for,  the
                  periods presented in this annual report on Form 10-KSB.

         There  have  been no  significant  changes  in the  Company's  internal
controls or in other factors since the date of the Chief Executive Officer's and
Chief  Financial  Officer's  evaluation  that could  significantly  affect these
internal controls,  including any corrective actions with regards to significant
deficiencies and material weaknesses.

ITEM 15 - 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, 2003
and 2002:

                 Service                              2003            2002
                 ------------------------------   -------------   -------------
                 Audit Fees                        $     7,596     $    14,356
                 Audit-Related Services                      -               -

                 Tax Fees                                  130             234
                 All Other Fees                              -               -
                                                  -------------   -------------

                 Total                             $     7,726     $    14,590
                                                  =============   =============

Audit Fees.  Consists 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. Consists 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.


                                   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: March 24, 2004                    By:/s/     Michael Sheriff
                                         Michael Sheriff, President and Chief
                                         Executive Officer
                                         (Principal Executive and Financial
                                         Officer)




<PAGE>


                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 2003 AND 2002




















                                       F-1

<PAGE>




                                    CONTENTS
<TABLE>
<CAPTION>
                                                                                                          Page

<S>                                                                                                       <C>
Independent Auditor's Report...............................................................................F - 1

Balance Sheets
  December 31, 2003 and 2002...............................................................................F - 2

Statements of Operations
  For the Years Ended December 31, 2003 and 2002...........................................................F - 3

Statement of Stockholders' Equity
 Period February 5, 1969 (inception) (unaudited) to December 31, 2003......................................F - 5

Statements of Cash Flows
  For the Years Ended December 31, 2003 and 2002...........................................................F - 9

Notes to Financial Statements.............................................................................F - 10
</TABLE>


























<PAGE>












                          INDEPENDENT AUDITOR'S REPORT


The X-Change Corporation
(A Development Stage Company)


         We  have  audited  the  accompanying  balance  sheet  of  The  X-Change
Corporation (a development  stage company) as of December 31, 2003 and 2002, and
the related  statements of operations and cash flows for the years ended and the
cumulative since October 4, 2000 (inception of development stage) to December31,
2003,  and  the  statement  of   stockholders'   equity  since  February  5,1969
(inception)  to  December  31,  2003.   These   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 audit in accordance with auditing standards  generally
accepted in the United States of America.  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  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, 2003 and 2002 and
the results of its  operations  and its cash flows for the years ended  December
31,  2003 and  December  31,  2002 and the  cumulative  since  October  4,  2000
(inception  of  development  stage) to  December  31,  2003 in  conformity  with
accounting principles generally accepted in the United States of America.

         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

                                       F-1

<PAGE>



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
March 24, 2004

































                                       F-2

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                                         December 31,
                                                                                  2003                  2002
                                                                           -------------------  --------------------
ASSETS:
<S>                                                                        <C>                  <C>
Current Assets:                                                            $                 -  $                  -
                                                                           -------------------  --------------------

Total Assets                                                               $                 -  $                  -
                                                                           ===================  ====================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:                                                       $               926  $                  -
                                                                           -------------------  --------------------

          Total Current Liabilities                                                        926                     -
                                                                           -------------------  --------------------


Stockholders' Equity:
   Preferred Stock, Par Value $.001,
   Series A Convertible - 5,000,000 Shares Authorized,
   0 Issued at December 31, 2003 and 2002                                                    -                     -
  Common Stock, Par value $.001, Authorized
   100,000,000 Shares, Issued 13,002,000 and 22,540,000
   at December 31, 2003 and 2002                                                        13,002                22,540
  Paid-In Capital                                                                      580,796               564,282
  Retained Deficit                                                                    (536,688)             (536,688)
 Deficit Accumulated During Development Stage                                          (58,036)              (50,134)
                                                                           -------------------  --------------------
     Total Stockholders' Equity                                                           (926)                    -
                                                                           -------------------  --------------------

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










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

                                       F-3

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                                  Cumulative
                                                                                                     Since
                                                                                                   October 4,
                                                                                                     2000
                                                                For the Year Ended                Inception of
                                                                    December 31,                   Development
                                                      ---------------------------------------
                                                             2003                 2002               Stage
                                                      -------------------  ------------------  -----------------

<S>                                                   <C>                  <C>                 <C>
Revenues                                              $                 -  $                -  $               -

Expenses:
   General & Administrative                                         7,902                   -             58,036
                                                      -------------------  ------------------  -----------------

Operating Loss                                                     (7,902)                  -            (58,036)
                                                      -------------------  ------------------  -----------------

Other Income (Expense):
   Interest                                                             -                   -                  -
                                                      -------------------  ------------------  -----------------

     Net Income (Loss)                                $            (7,902) $                -  $         (58,036)
                                                      ===================  ==================  =================

Earnings per Share, Basic & Diluted                   $                 -  $                -
                                                      ===================  ==================

Weighted Average Shares Outstanding                            22,444,620          22,540,000
                                                      ===================  ==================
</TABLE>















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

                                       F-4

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2003
<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)
                        STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2003
                                   (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)
                        STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2003
                                   (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>
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)
                        STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM FEBRUARY 5, 1969 (INCEPTION) TO DECEMBER 31, 2003
                                   (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>
Balance at December 31, 2002                    --     $     --     22,540,000   $   22,540   $  564,282   $  536,688    $  (50,134)

December 31, 2003, Shares
  Cancelled                                     --           --     (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)
                                          ==========   ==========   ==========   ==========   ==========   ==========    ==========
</TABLE>






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

                                       F-8

<PAGE>





                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                                  Cumulative
                                                                                                                     Since
                                                                                                                   October 4,
                                                                                                                      2000
                                                                                 For the Year Ended               Inception of
                                                                                    December 31,                  Development
                                                                        -------------------------------------
                                                                               2003                2002              Stage
                                                                        ------------------   ----------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                     <C>                  <C>               <C>
Net Income (Loss)                                                       $           (7,902)  $              -  $          (58,036)
Adjustments to reconcile net loss to net cash
   Provided by operating activities:
Increase (Decrease) in Accounts Payable                                                926             (1,218)             30,021
                                                                        ------------------   ----------------  ------------------

Net Cash Used in Operating Activities                                               (6,976)            (1,218)            (28,015)
                                                                        ------------------   ----------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Net Cash Provided by Investing Activities                                                -                  -                   -
                                                                        ------------------   ----------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net Shareholder Loans                                                               -            (19,821)                  -
     Capital Contributed                                                             6,976             21,039              28,015
                                                                        ------------------   ----------------  ------------------

Net Cash Provided by Financing Activities                                            6,976              1,218              28,015
                                                                        ------------------   ----------------  ------------------


Net (Decrease) Increase in
  Cash and Cash Equivalents                                                              -                  -                   -
Cash and Cash Equivalents
  at Beginning of Period                                                                 -                  -                   -
                                                                        ------------------   ----------------  ------------------
Cash and Cash Equivalents
  at End of Period                                                      $                -   $              -  $                -
                                                                        ==================   ================  ==================

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

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: None
----------------------------------------------------------- -----------
</TABLE>


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

                                       F-9

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO 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  $58,000  for the  period  from  October  4,  2000  (inception  of
development stage) to December 31, 2003, 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 development, acquisition and marketing
of leading-edge  wireless  internet/networking  technologies,  principally  RFID
("radio frequency identification").

         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 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.

Nature of Business

         The Company has no products  or services as of December  31,  2003.  On
February  9,  2004,  the  Company  formed a wholly  owned  subsidiary,  Air Gate
Technologies,  Inc. ("Air Gate"), for the purpose of engaging in the development
and  acquisition  of  leading-edge  wireless  internet/networking  technologies,
principally RFID ("radio frequency identification").

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-11

<PAGE>




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

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

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.

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.  There were no common  equivalent
shares outstanding at December 31, 2003 and 2002.

NOTE 2 - INCOME TAXES

         As  of  December  31,  2003,  the  Company  had a  net  operating  loss
carryforward for income tax reporting  purposes of  approximately  $594,123 that
may be offset against future taxable income through 2021. 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.


                                       F-12

<PAGE>



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

NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN

         The Company has not begun principal  operations and as is common with a
development  stage  company,  the Company has had  recurring  losses  during its
development  stage.  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  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,  2003,  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.

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 a result of the March 13, 2003  repurchase  agreement  all 5,000,000
shares were returned to treasury.

NOTE 6 - STOCK TRANSACTIONS

         On December 31, 2003, certain shareholders contributed back to capital.




                                      F-13

<PAGE>


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

NOTE 7 - 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 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.

NOTE 8 - SUBSEQUENT EVENTS

         On February 9, 2004, the Company formed a wholly owned subsidiary,  Air
Gate Technologies for the purpose of engaging in the development and acquisition
of leading-edge  wireless  internet/networking  technologies,  principally radio
frequency identification.

         Concurrent  with the formation of the  subsidiary  Michael  Sheriff was
engaged to be the a new President,  CEO, treasurer and chairman of the board. In
exchange for his services,  Mr Sheriff received an option to purchase 12,000,000
shares of common stock at the market price on the date of his engagement.








                                      F-14