##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2006
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
 For the transition period from  to
 Commission File Number: 000-50989
 INTERCHANGE CORPORATION
  Delaware
    
    
    
    33-0849123(State or other jurisdiction of
incorporation or organization)
    
    
    
    (I.R.S. Employer
Identification No.)
 One Technology Drive, Building G
Irvine, CA 92618
 (949) 784-0800
 þ o
  o o þ
 o þ
 Number of shares outstanding at July 31, 2006:
    
    Common:
    
    9,249,445Preferred:
    
    0




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##### 



INTERCHANGE CORPORATION
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements.Condensed Consolidated Balance Sheets as of June 30, 2006 (Unaudited) and December 31, 2005
    
    
    3Condensed Consolidated Statements of Operations for the three and six months ended June
30, 2006 and 2005 (Unaudited)
    
    
    4Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six
months ended
June 30, 2006 and 2005 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and
2005 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    15Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
    
    
    20Item 4.
    
    Controls and Procedures.
    
    
    21PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings.
    
    
    22Item 1A.
    
    Risk Factors.
    
    
    22Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    22Item 3.
    
    Defaults Upon Senior Securities.
    
    
    22Item 4.
    
    Submission of Matters to a Vote of Security Holders.
    
    
    22Item 5.
    
    Other Information.
    
    
    22Item 6.
    
    Exhibits
    
    
    22EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 INTERCHANGE CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,402
    
    
    $
    1,075Restricted cash
    
    
    41
    
    
    
    10Marketable securities
    
    
    7,890
    
    
    
    13,244Accounts receivable, net of allowances of $16 and $30, respectively
    
    
    1,857
    
    
    
    1,138Prepaid expenses and other current assets
    
    
    331
    
    
    
    377Total current assets
    
    
    11,521
    
    
    
    15,844Property and equipment, net
    
    
    2,375
    
    
    
    2,772Intangible assets, net
    
    
    3,287
    
    
    
    3,760Goodwill
    
    
    12,213
    
    
    
    12,445Long-term restricted cash
    
    
    125
    
    
    
    166Deposits
    
    
    47
    
    
    
    47Total assets
    
    $
    29,568
    
    
    $
    35,034LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,962
    
    
    $
    1,798Accrued compensation
    
    
    389
    
    
    
    347Deferred rent
    
    
    508
    
    
    
    575Accrued royalties
    
    
    254
    
    
    
    496Other accrued liabilities
    
    
    731
    
    
    
    631Notes payable
    
    
    14
    
    
    
    84Deferred revenue
    
    
    319
    
    
    
    295Total liabilities, all current
    
    
    4,177
    
    
    
    4,226Minority interest
    
    
    (1
    )
    
    
    (1
    )Commitments and contingenciesStockholders equity:Convertible preferred stock, $0.00001 par value; 10,000,000 shares authorized;
none issued and outstanding for all periods presented
    
    
    
    
    
    
    Common stock, $0.00001 par value; 30,000,000 shares authorized;
9,235,352 and 9,171,944 issued and outstanding, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    50,497
    
    
    
    48,706Accumulated comprehensive loss
    
    
    (101
    )
    
    
    (151
    )Accumulated deficit
    
    
    (25,004
    )
    
    
    (17,746
    )Stockholders equity
    
    
    25,392
    
    
    
    30,809Total liabilities and stockholders equity
    
    $
    29,568
    
    
    $
    35,034
  3




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INTERCHANGE CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    $
    3,374
    
    
    $
    4,753
    
    
    $
    6,525
    
    
    $
    10,663Operating expenses:Search serving
    
    
    1,381
    
    
    
    2,638
    
    
    
    2,961
    
    
    
    5,813Sales and marketing
    
    
    3,146
    
    
    
    1,507
    
    
    
    5,614
    
    
    
    2,845General and administrative
    
    
    1,549
    
    
    
    1,032
    
    
    
    3,352
    
    
    
    1,993Research and development
    
    
    618
    
    
    
    459
    
    
    
    1,569
    
    
    
    1,015Amortization of intangibles
    
    
    237
    
    
    
    177
    
    
    
    473
    
    
    
    228Total operating expenses
    
    
    6,931
    
    
    
    5,813
    
    
    
    13,969
    
    
    
    11,894Operating loss
    
    
    (3,557
    )
    
    
    (1,060
    )
    
    
    (7,444
    )
    
    
    (1,231
    )Interest and other income
    
    
    83
    
    
    
    226
    
    
    
    188
    
    
    
    540Loss before income taxes
    
    
    (3,474
    )
    
    
    (834
    )
    
    
    (7,256
    )
    
    
    (691
    )Provision (benefit) for income taxes
    
    
    1
    
    
    
    (6
    )
    
    
    2
    
    
    
    5Net loss
    
    $
    (3,475
    )
    
    $
    (828
    )
    
    $
    (7,258
    )
    
    $
    (696
    )Per share data:Basic net loss per share
    
    $
    (0.38
    )
    
    $
    (0.10
    )
    
    $
    (0.79
    )
    
    $
    (0.08
    )Diluted net loss per share
    
    $
    (0.38
    )
    
    $
    (0.10
    )
    
    $
    (0.79
    )
    
    $
    (0.08
    )Basic weighted average shares outstanding
    
    
    9,233,601
    
    
    
    8,536,068
    
    
    
    9,222,385
    
    
    
    8,264,347Diluted weighted average shares outstanding
    
    
    9,233,601
    
    
    
    8,536,068
    
    
    
    9,222,385
    
    
    
    8,264,347
  4




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INTERCHANGE CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net loss
    
    $
    (3,475
    )
    
    $
    (828
    )
    
    $
    (7,258
    )
    
    $
    (696
    )Other comprehensive income (loss):Foreign currency translation adjustments
    
    
    16
    
    
    
    (5
    )
    
    
    11
    
    
    
    (6
    )Net unrealized gain (loss) on marketable
securities
    
    
    18
    
    
    
    14
    
    
    
    40
    
    
    
    (103
    )Total comprehensive loss
    
    $
    (3,441
    )
    
    $
    (819
    )
    
    $
    (7,207
    )
    
    $
    (805
    )Supplemental comprehensive income (loss) information:Unrealized holding gains (losses) arising during period
    
    $
    23
    
    
    $
    14
    
    
    $
    61
    
    
    $
    (79
    )Reclassification adjustment for losses included in net loss
    
    
    (5
    )
    
    
    
    
    
    
    (21
    )
    
    
    (24
    )Net unrealized gain (loss) on marketable securities
    
    $
    18
    
    
    $
    14
    
    
    $
    40
    
    
    $
    (103
    )
  5




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INTERCHANGE CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Six months endedJune 30,2006
    
    
    2005Cash flows from operating activities:Net loss
    
    $
    (7,258
    )
    
    $
    (696
    )Adjustments to reconcile net loss to cash used in operating activities:Depreciation and amortization
    
    
    1,043
    
    
    
    521Provision for doubtful accounts
    
    
    (15
    )
    
    
    19Non-cash stock based compensation
    
    
    1,581
    
    
    
    80Non-cash interest income
    
    
    (5
    )
    
    
    (7
    )Realized loss on marketable securities
    
    
    21
    
    
    
    24Changes in operating assets and liabilities:Accounts receivable
    
    
    (704
    )
    
    
    (298
    )Prepaid expenses and other
    
    
    46
    
    
    
    (130
    )Accounts payable and accrued liabilities
    
    
    (3
    )
    
    
    (598
    )Deferred revenue
    
    
    24
    
    
    
    (25
    )Net cash used in operating activities
    
    
    (5,270
    )
    
    
    (1,110
    )Cash flows from investing activities:Capital expenditures
    
    
    (173
    )
    
    
    (2,356
    )Purchases of marketable securities
    
    
    
    
    
    
    (6,983
    )Proceeds from sales of marketable securities
    
    
    5,378
    
    
    
    3,008Increase in restricted cash
    
    
    10
    
    
    
    (112
    )Acquisition, net of cash returned (acquired)
    
    
    232
    
    
    
    (15,285
    )Net cash provided by (used in) investing activities
    
    
    5,447
    
    
    
    (21,728
    )Cash flows from financing activities:Proceeds from issuance of common stock from exercise of options
    
    
    174
    
    
    
    948Proceeds from issuance of common stock from exercise of warrants
    
    
    38
    
    
    
    1,017Payment of notes payable
    
    
    (70
    )
    
    
    Payment of financing related costs
    
    
    (3
    )
    
    
    (133
    )Net cash provided by financing activities
    
    
    139
    
    
    
    1,832Effect of currency changes on cash
    
    
    11
    
    
    
    (6
    )Net increase (decrease) in cash and cash equivalents
    
    
    327
    
    
    
    (21,012
    )Cash and cash equivalents, beginning of period
    
    
    1,075
    
    
    
    24,617Cash and cash equivalents, end of period
    
    $
    1,402
    
    
    $
    3,605Supplemental cash flow information:Interest paid
    
    $
    3
    
    
    $
    Income taxes paid
    
    $
    2
    
    
    $
    1Non-cash investing and financing transactions:Common stock issued for asset purchase
    
    
    
    
    
    $
    750
  6




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INTERCHANGE CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  1. Basis of presentation
   2. Significant accounting policies
 Principles of consolidation
  Foreign currency translation
  Intangible assets
    Goodwill
 Goodwill and Other Intangible Assets
 7




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Web site development costs and computer software developed for internal use
 Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use Accounting for Web Site Development Costs
 Stock-based compensation
 Share-Based Payment
 Accounting for Stock-Based Compensation
  Three months ended
    
    
    Six months endedJune 30, 2006
    
    
    June 30, 2006Sales and marketing
    
    $
    199
    
    
    $
    370General and administrative
    
    
    391
    
    
    
    1,062Research and development
    
    
    76
    
    
    
    149Total stock-based compensation expense
    
    $
    666
    
    
    $
    1,581Basic and diluted net compensation expense per share
    
    $
    0.07
    
    
    $
    0.17
  Risk-free interest rate
    
    
    4.47
    %Expected lives (in years)
    
    
    8.3Expected dividend yield
    
    NoneExpected volatility
    
    
    83.83
    %
 Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation  Transition and Disclosure
 8




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30, 2005
    
    
    June 30, 2005Net loss, as reported
    
    $
    (828
    )
    
    $
    (696
    )Add: Stock-based compensation expense
recorded in accordance with APB No. 25
    
    
    65
    
    
    
    65Deduct: Additional stock-based employee
compensation expense determined under the fair
value based method for all awards, net of tax
effects
    
    
    (1,176
    )
    
    
    (2,272
    )Pro forma net loss
    
    $
    (1,939
    )
    
    $
    (2,903
    )Net loss per share:Basic  as reported
    
    $
    (0.10
    )
    
    $
    (0.08
    )Basic  pro forma
    
    $
    (0.23
    )
    
    $
    (0.35
    )Net loss per share:Diluted  as reported
    
    $
    (0.10
    
    
    $
    (0.08
    )Diluted  pro forma
    
    $
    (0.23
    )
    
    $
    (0.35
    )
 Net income (loss) per share
 Earnings per Share
   9




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3. Composition of certain balance sheet and statement of operations captions
  June 30,
    
    
    December 31,2006
    
    
    2005Furniture and fixtures
    
    $
    197
    
    
    $
    195Office equipment
    
    
    93
    
    
    
    93Computer equipment
    
    
    1,761
    
    
    
    1,754Computer software
    
    
    1,333
    
    
    
    1,169Leasehold improvements
    
    
    580
    
    
    
    5803,964
    
    
    
    3,791Less accumulated depreciation and amortization
    
    
    (1,589
    )
    
    
    (1,019
    )Property and equipment, net
    
    $
    2,375
    
    
    $
    2,772
  June 30,
    
    
    December 31,2006
    
    
    2005Developed technology
    
    $
    2,233
    
    
    
    2,233Non-compete agreements
    
    
    261
    
    
    
    261Purchased technology
    
    
    1,239
    
    
    
    1,239Domain name
    
    
    701
    
    
    
    7014,434
    
    
    
    4,434Less accumulated amortization
    
    
    (1,147
    )
    
    
    (674
    )Intangible assets, net
    
    $
    3,287
    
    
    $
    3,760
 10




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4. Operating segment information
 Disclosures about Segments of an Enterprise and Related Information
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue by segment:United States
    
    $
    3,300
    
    
    $
    4,525
    
    
    $
    6,392
    
    
    $
    10,334Europe
    
    
    74
    
    
    
    228
    
    
    
    133
    
    
    
    329Total revenue
    
    $
    3,374
    
    
    $
    4,753
    
    
    $
    6,525
    
    
    $
    10,663Operating income (loss) by segment:United States
    
    $
    (3,495
    )
    
    $
    (1,071
    )
    
    $
    (7,260
    )
    
    $
    (1,262
    )Europe
    
    
    (62
    )
    
    
    11
    
    
    
    (184
    )
    
    
    31Total operating loss
    
    $
    (3,557
    )
    
    $
    (1,060
    )
    
    $
    (7,444
    )
    
    $
    (1,231
    )
 June 30,
    
    
    December 31,2006
    
    
    2005Total assets by segment:United States
    
    $
    29,389
    
    
    $
    34,843Europe
    
    
    179
    
    
    
    191Total assets
    
    $
    29,568
    
    
    $
    35,034
 5. Stock option plans
 1999 Plan
  2000 Plan
  11




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##### Table of Contents



2004 Plan
  2005 Plan
   Weight AverageShares
    
    
    Exercise PriceOutstanding at December 31, 2005
    
    
    1,339,360
    
    
    $
    5.95Granted
    
    
    436,417
    
    
    
    4.32Exercised
    
    
    (44,494
    )
    
    
    3.92Cancelled
    
    
    (159,469
    )
    
    
    6.74Outstanding at June 30, 2006
    
    
    1,571,814
    
    
    $
    5.47Exercisable at June 30, 2006
    
    
    879,457
    
    
    $
    5.21
 12




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##### Table of Contents



Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageContractual
    
    Exercise
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    Life
    
    Price
    
    Shares
    
    Price$0.00  $1.00
    
    
    26,250
    
    
    
    1.5
    
    
    $
    0.40
    
    
    
    26,250
    
    
    $
    0.40$1.01  $2.00
    
    
    175,000
    
    
    
    6.5
    
    
    $
    2.00
    
    
    
    175,000
    
    
    $
    2.00$2.01  $3.00
    
    
    162,163
    
    
    
    7.4
    
    
    $
    2.25
    
    
    
    132,314
    
    
    $
    2.25$3.01  $4.00
    
    
    444,252
    
    
    
    7.3
    
    
    $
    3.79
    
    
    
    207,460
    
    
    $
    4.00$4.01  $5.00
    
    
    63,000
    
    
    
    9.7
    
    
    $
    4.25
    
    
    
    
    
    
    $
    $5.01  $6.00
    
    
    198,152
    
    
    
    8.3
    
    
    $
    5.62
    
    
    
    94,945
    
    
    $
    5.65$6.01  $7.00
    
    
    116,564
    
    
    
    9.1
    
    
    $
    6.39
    
    
    
    59,247
    
    
    $
    6.39$7.01  $8.00
    
    
    186,500
    
    
    
    9.1
    
    
    $
    7.52
    
    
    
    36,053
    
    
    $
    7.75$8.01  $10.00
    
    
    70,000
    
    
    
    8.9
    
    
    $
    9.17
    
    
    
    63,333
    
    
    $
    9.21$15.01  $16.59
    
    
    129,933
    
    
    
    8.3
    
    
    $
    15.53
    
    
    
    84,855
    
    
    $
    15.501,571,814
    
    
    
    7.9
    
    
    $
    5.47
    
    
    
    879,457
    
    
    $
    5.21
 6. Warrants
  Weight AverageShares
    
    
    Exercise PriceOutstanding at December 31, 2005
    
    
    1,279,575
    
    
    $
    8.13Exercised
    
    
    (35,932
    )
    
    
    3.74Expired
    
    
    (44,229
    )
    
    
    3.80Outstanding at June 30, 2006
    
    
    1,199,414
    
    
    $
    8.42Exercisable at June 30, 2006
    
    
    1,199,414
    
    
    $
    8.42
  Warrants Outstanding
    
    Warrants ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageContractual
    
    Exercise
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    Life
    
    Price
    
    Shares
    
    Price$0.00  $3.99
    
    
    441,450
    
    
    
    2.0
    
    
    $
    3.56
    
    
    
    441,450
    
    
    $
    3.56$4.00  $5.99
    
    
    262,814
    
    
    
    1.1
    
    
    $
    4.00
    
    
    
    262,814
    
    
    $
    4.00$8.00  $9.99
    
    
    15,000
    
    
    
    1.3
    
    
    $
    8.00
    
    
    
    15,000
    
    
    $
    8.00$10.00  $19.99
    
    
    315,750
    
    
    
    3.3
    
    
    $
    10.00
    
    
    
    315,750
    
    
    $
    10.00$20.00  $25.53
    
    
    164,400
    
    
    
    3.5
    
    
    $
    25.53
    
    
    
    164,400
    
    
    $
    25.531,199,414
    
    
    
    2.3
    
    
    $
    8.42
    
    
    
    1,199,414
    
    
    $
    8.42
 13




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7. Inspire Infrastructure 2i AB acquisition
   14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 This Quarterly Report on Form 10-Q or certain information included or incorporated by reference in
this report, contains or may contain forward-looking statements that involve risks, uncertainties
and assumptions. All statements, other than statements of historical fact, are statements that
could be deemed forward- looking statements within the meaning of the federal securities laws.
In addition, important factors to consider in evaluating such forward-looking statements include
changes or developments in social, economic, market, legal or regulatory circumstances, changes in
our business or growth strategy or an inability to execute our strategy due to changes in our
industry or the economy generally, the emergence of new or growing competitors, the actions or
omissions of third parties, including customers, competitors and governmental authorities, and
various other factors. Should any one or more of these risks or uncertainties materialize, or the
underlying estimates or assumptions prove incorrect, our actual results could differ materially
from those expressed in the forward-looking statements and there can be no assurance that the
forward-looking statements contained in this report will in fact occur..
 The following discussion and analysis of our financial condition and results of operations should
be read in conjunction with the attached condensed consolidated financial statements and related
notes thereto, and with the audited consolidated financial statements and related notes thereto as
of December 31, 2005 and for the year ended December 31, 2005 included in our Annual Report on Form
10-KSB filed with the Securities and Exchange Commission on March 22, 2006.
 Overview
   Stock-based compensation
 Share-Based Payment
 Accounting for
Stock-Based Compensation
 15




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30, 2006
    
    
    June 30, 2006Sales and marketing
    
    $
    199
    
    
    $
    370General and administrative
    
    
    391
    
    
    
    1,062Research and development
    
    
    76
    
    
    
    149Total stock-based compensation expense
    
    $
    666
    
    
    $
    1,581Basic and diluted net compensation expense per share
    
    $
    0.07
    
    
    $
    0.17
 Results of Operations
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Search serving
    
    
    40.9
    
    
    
    55.5
    
    
    
    45.4
    
    
    
    54.5Sales and marketing
    
    
    93.3
    
    
    
    31.7
    
    
    
    86.0
    
    
    
    26.7General and administrative
    
    
    45.9
    
    
    
    21.7
    
    
    
    51.4
    
    
    
    18.7Research and development
    
    
    18.3
    
    
    
    9.7
    
    
    
    24.0
    
    
    
    9.5Amortization of intangibles
    
    
    7.0
    
    
    
    3.7
    
    
    
    7.3
    
    
    
    2.1Total operating expenses
    
    
    205.4
    
    
    
    122.3
    
    
    
    214.1
    
    
    
    111.5Operating loss
    
    
    (105.4
    )
    
    
    (22.3
    )
    
    
    (114.1
    )
    
    
    (11.5
    )Interest and other income
    
    
    2.4
    
    
    
    4.8
    
    
    
    2.9
    
    
    
    5.0Loss before income taxes
    
    
    (103.0
    )
    
    
    (17.5
    )
    
    
    (111.2
    )
    
    
    (6.5
    )Provision (benefit) for income taxes
    
    
    0.0
    
    
    
    (0.1
    )
    
    
    0.0
    
    
    
    0.0Net loss
    
    
    (103.0
    )%
    
    
    (17.4
    )%
    
    
    (111.2
    )%
    
    
    (6.5
    )%
 Three months ended June 30, 2006 and 2005
 Revenue
    16




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Search serving
  Sales and marketing
  General and administrative
  Research and development
  17




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##### Table of Contents



Amortization of intangibles
  Interest and other income
  Provision (benefit) for income taxes
  Net loss
  Six months ended June 30, 2006 and 2005
 Revenue
       Search serving
  18




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##### Table of Contents



Sales and marketing
  General and administrative
  Research and development
  Amortization of intangibles
  Interest and other income
  Provision (benefit) for income taxes
  Net loss
  Liquidity and Capital Resources
   19




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##### Table of Contents



Inspire Infrastructure 2i AB acquisition
 30-day
  Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest Rate Risk
   Foreign Currency Risk
  20




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Item 4. Controls and Procedures
     21




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   
 Item 3. Defaults upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 ExhibitNumber
    
    Description31.1
    
    Certification of Principal Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Principal Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 22




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##### Table of Contents



SIGNATURES
  INTERCHANGE CORPORATIONAugust 4, 2006
    
    
    
    /s/ Heath B. ClarkeDate
    
    
    
    Heath B. ClarkeChief Executive Officer and Chairman/s/ Douglas S. NormanDouglas S. NormanChief Financial Officer and Secretary
 23




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##### Table of Contents



EXHIBITS FILED WITH THIS REPORT
 ExhibitNumber
    
    Description31.1
    
    Certification of Principal Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Principal Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 24