UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark  One)

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

                   For  the  fiscal  year  ended  December  31,  2005

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

     For  the  transition  period  from             to
                                        -----------    -------------

                       Commission file number: 000-32885

                                    XA, INC.
     ----------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

               NEVADA                                    88-0471263
  (State  or  other  jurisdiction of           (IRS Employer Identification No.)
   incorporation  or  organization)

          875 North Michigan Avenue, Suite 2626, Chicago, Illinois 60611
                -------------------------------------------------
                    (Address  of  principal  executive  offices)

                                 (312)  397-9100
                          -------------------------------
                         (Registrant's  telephone  number)

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  PER  SHARE

     Check  whether  the  registrant  (1)  has filed all reports  required to be
filed  by  Section 13 or 15(d) of the 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. Yes
[X]  No  [ ]

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  not contained in this form, and no disclosure  will be
contained,  to  the  best  of the 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.  [ ]

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

<PAGE>

     The  issuer's  revenues  for the most recent fiscal year ended December 31,
2005 were $10,912,614.

     The  aggregate  market  value  of the issuer's voting and non-voting common
equity  held  by non-affiliates computed by reference to the average bid and ask
price  of  such  common  equity  as  of  March 23,  2006,  was approximately
$740,897.31.

     As  of  March 23, 2006 the issuer had 3,752,250 shares of common stock,
$.001  par  value  per  share  outstanding  ("Common  Stock").

                    Documents  Incorporated  by  Reference:  NONE

          Transitional  Small  Business  Disclosure  Format:  Yes  [ ]  No  [X]

                                    XA, INC.
                                   FORM 10-KSB
                          YEAR ENDED December 31, 2004
                                      INDEX

                                     Part  I

    Item  1.             Description  of  Business                            3

    Item  2.             Description  of  Property                            12

    Item  3.             Legal  Proceedings                                   13

    Item  4.             Submission  of  Matters  to  a  Vote  of
                         Security  Holders                                    14


                                     Part  II

    Item  5.             Market  for  Common  Equity  and  Related
                         Stockholder  Matters                                 15

    Item  6.             Management's  Discussion  and  Analysis  or
                         Plan  of  Operation                                  18

    Item  7.             Financial  Statements                               F-1

    Item  8.             Changes  in  and  Disagreements  with
                         Accountants  on  Accounting  and  Financial
                         Disclosure                                           28

    Item  8A.            Controls  and  Procedures                            28

    Item  8B             Other Information                                    28


                                    Part  III

    Item  9.             Directors,  Executive  Officers,  Promoters
                         and  Control  Persons;  Compliance  with
                         Section  16(a)  of  the  Exchange  Act               28

    Item  10.            Executive  Compensation                              32


    Item  11.            Security  Ownership  of  Certain  Beneficial
                         Owners and Management and Related Stockholder
                         Matters                                              34

<PAGE>

    Item  12.            Certain  Relationships  and  Related
                         Transactions                                         37

    Item  13.            Exhibits  and  Reports  on  Form  8-K
                         (a)   Exhibits                                       38

                         (b)   Reports  on  Form  8-K                         40

    Item  14.            Principal  Accountant  Fees  and  Services
                         Signatures                                           40

                                     PART  I
ITEM 1. DESCRIPTION OF BUSINESS

   SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Certain  statements  in  this  Annual  Report on Form 10-KSB (this "Form 10
KSB"),  including  statements under "Item 1. Description of Business," and "Item
6.  Management's  Discussion  and  Analysis",  constitute  "forward  looking
statements"  within the meaning of Section 27A of the Securities Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995 (collectively,
the  "Reform  Act").  Certain,  but not necessarily all, of such forward-looking
statements  can  be identified by the use of forward-looking terminology such as
"believes",  "expects",  "may",  "should",  or  "anticipates",  or  the negative
thereof or other variations thereon or comparable terminology, or by discussions
of  strategy  that  involve  risks  and  uncertainties.  Such  forward-looking
statements  involve  known  and  unknown  risks, uncertainties and other factors
which  may  cause  the  actual  results, performance or achievements of XA, Inc.
("XA",  "the  Company", "we", "us" or "our") to be materially different from any
future  results,  performance  or  achievements  expressed  or  implied  by such
forward-looking  statements. References in this form 10-KSB, unless another date
is  stated,  are  to  December  31,  2005.

BUSINESS HISTORY

     XA,  Inc.,  was originally incorporated in Nevada as Synreal Services Corp.
("Synreal") on August 28, 2000. The Company's business plan was to engage in the
business  of providing due diligence and administrative services for real estate
syndications. Prior to entering into an Exchange Agreement, discussed below, and
the  consummation  of  the transactions thereunder, the Company was considered a
development stage enterprise, as defined in Financial Accounting Standards Board
No. 7. Our principal executive offices are located at 875 North Michigan Avenue,
Suite  2626, Chicago, Illinois 60611. Our telephone number is (312) 397-9100 and
our  fax  number  is  (312)  573-1515.

     On  December  4, 2003, Synreal, The Experiential Agency, Inc., formerly G/M
Productions,  Inc.,  an  Illinois  corporation  ("Experiential")  and the former
Experiential  shareholders entered into an Exchange Agreement (the "Exchange" or
"Acquisition")  whereby  Experiential  became  a  wholly-owned subsidiary of the
Company  and  control  of  the  Company  shifted  to  the  former  Experiential
shareholders.  In addition, Frank Goldstin, the Company's former Chief Executive
Officer  and  a  former  director  of the Company, entered into a stock purchase
agreement  with  the  Company's  former officers and directors, Brian Chelin and
Jennifer  Wallace.  Synreal  was  considered  a  "shell"  at  the  time  of  the
Acquisition;  therefore,  the  transaction  was  treated  as  a  reverse merger.

     Effective  February  2,  2004, the Company declared a 13 to 1 forward stock
split. Effective December 9, 2004, the Company declared a 1 for 20 reverse stock

                                        3
<PAGE>

split. The effects of the stock splits have been retroactively reflected in this
Form  10-KSB  unless  otherwise  stated.

     In  June  2004,  the  Company  entered  into  a Subscription Agreement (the
"Subscription  Agreement")  with  Alpha  Capital  Aktiengesellschaft  ("Alpha
Capital"),  Stonestreet  Limited  Partnership  ("Stonestreet"), Whalehaven Funds
Limited  ("Whalehaven"), Greenwich Growth Fund Limited ("Greenwich") and Genesis
Microcap  Inc.  ("Genesis")  (collectively  the  "Note  Holders")  to  purchase
convertible promissory notes having an aggregate principal amount of $2,500,000,
a  6%  annual  interest  rate,  and  a  conversion price of $0.25 per share (the
"Convertible  Notes"  or "Notes"). Following the reverse stock split on December
9,  2004,  the  conversion  price  of the Notes would have been $5.00 per share,
however, the Company agreed to change the conversion price of the Notes to $2.00
per  share.

     Alpha  Capital,  Stonestreet,  Whalehaven,  Greenwich  and  Genesis  are
collectively  referred  to  herein  as  the  "Purchasers."  Of the $2,500,000 in
Convertible  Notes  issued  to  the  Note  Holders,  $467,500  in  principal and
$4,555.67  in  interest  have  been  converted into a total of 94,412 post split
shares,  leaving  $2,032,500  (not  including any accrued interest) which can be
converted  into approximately 1,016,250 shares of Common Stock. The Subscription
Agreement  also  provided  for  the  issuance  of  warrants to purchase up to an
aggregate of 250,000 shares of Common Stock, with an exercise price of $9.60 per
share  (the  "Class A Warrants"), and warrants to purchase up to an aggregate of
500,000  shares  of Common Stock, with an exercise price of $5.00 per share (the
"Class  B  Warrants").  The  Class  A  Warrants  are  referred  to herein as the
"Warrants".  The Company did not agree to change the exercise price of the Class
A  Warrants  or the exercise price of the Class B Warrants. The Class A Warrants
expire  Four (4) years from the date they were issued. The Class B Warrants have
expired  and  no  Class  B  Warrants  were  ever  exercised  by  the Purchasers.

     In  June  2004,  the  Company also entered into a Consulting Agreement with
Loev  Corporate Filings, Inc. ("Filings") for Edgar filing services for one year
in  exchange for 5,000 shares of Common Stock, which was subsequently revised in
January 2005, to include the Company's Edgar filing services until May 2006, for
an  additional  30,000  shares  of  the  Company's  Common  Stock.

     As  part of the Company's growth strategy, the Company purchased all of the
assets  of  Fiori,  Inc.  an  event  decor company ("Fiori"), in August 2004, in
exchange  for  40,000  restricted  shares  of the Company's Common Stock and the
assumption  of certain liabilities of Fiori. Included in the assets purchased by
the  Company were accounts receivable, floral inventory, and glassware. Excluded
from  the  sale  of  assets  were  insurance  policies,  claims for tax refunds,
employee  plans,  and  all  real  estate  held  by Fiori or affiliated entities.
Additionally,  the  Company  agreed  to  assume  certain  liabilities  of Fiori,
including  accounts  payable,  accrued  payroll,  and  customer  deposits.

     On  January  3,  2005,  in  furtherance  of  the  Company's  growth through
acquisition strategy, the Company entered into an Asset Acquisition Agreement to
purchase  certain  assets  of  Musters  &  Company, Inc., a New York corporation
("Musters"), an event planning and decor company whose operations are located in
the  floral  district  in New York, in exchange for 150,000 restricted shares of
the  Company's  Common  Stock and the assumption of the leases of Musters. Entry
into  the  Asset  Acquisition  Agreement  was approved by the Company's board of
directors  on December 29, 2004. Included in the assets purchased by the Company
were  copyrights,  contract  rights,  customer  lists,  goodwill,  leasehold
improvements,  leases, permits, fixed assets, software, trademarks, trade names,
trade  secrets,  internet  domains, and phone numbers. Excluded from the sale of

                                        4
<PAGE>

assets  were  accounts  receivable,  insurance policies, claims for tax refunds,
employee  benefit  plans  (or  interests therein) and all real estate (excluding
leasehold  improvements)  either  held  by  Musters  or  an  affiliated  entity.
Additionally,  the  Company  did not assume any of the liabilities of Musters in
connection  with  the  Asset  Acquisition  Agreement.


     In  the  third quarter of 2005, we formed a wholly owned Nevada subsidiary,
XA  Scenes,  Inc.  ("XA Scenes"). XA Scenes was formed as a special events venue
management firm. Our senior management team believes that there is a significant
opportunity  for XA Scenes to capitalize on the synergies that exist between our
event  marketing  agency,  The  Experiential  Agency,  Inc.,  and selected joint
venture  partners.

     The  Company filed a Certificate of Amendment ("Amendment") to its Articles
of  Incorporation  with the Secretary of State of Nevada, which became effective
on  December  19,  2005,  to increase its authorized shares, reauthorize the par
value  of  its  common stock, reauthorize its preferred stock and to reauthorize
the  par  value  of  its preferred stock. The Amendment increased the authorized
shares  of  the  Company  to Twenty Million (20,000,000) shares of common stock,
re-authorized  the  par  value  of  $0.001 per share, re-authorized Five Hundred
Thousand (500,000) shares of preferred stock, and re-authorized the par value of
$0.001  per  share  of  preferred  stock.

     Shares  of  the  preferred  stock of the Company may be issued from time to
time  in one or more series, each of which shall have distinctive designation or
title as shall be determined by the Board of Directors of the Company ("Board of
Directors")  prior  to the issuance of any shares thereof. Preferred stock shall
have  such  voting  powers,  full  or  limited,  or  no  voting powers, and such
preferences  and  relative,  participating, optional or other special rights and
such  qualifications, limitations or restrictions thereof, as shall be stated in
such  resolution  or resolutions providing for the issue of such class or series
of preferred stock as may be adopted from time to time by the Board of Directors
prior  to the issuance of any shares thereof. The number of authorized shares of
preferred  stock  may  be  increased  or  decreased (but not below the number of
shares  thereof  then  outstanding)  by the affirmative vote of the holders of a
majority  of  the voting power of all the then outstanding shares of the capital
stock  of  the  Company entitled to vote generally in the election of directors,
voting together as a single class, without a separate vote of the holders of the
preferred  stock,  or  any  series thereof, unless a vote of any such holders is
required  pursuant  to  any  preferred  stock  designation.

     On  December  27, 2005, we entered into an Agreement with David M. Loev, an
attorney,  to  be responsible for certain corporate/securities matters including
the  preparation of and/or review of Schedule 13ds, Form 3's, Form 4's, Schedule
13g's,  Schedule  14a's,  Schedule  14c's, Form 10-QSB's, Form 10-KSB's and Form
8-K's  to  be  filed  by  us with the Securities and Exchange Commission and the
review  of  our  press  releases (the "Legal Services Agreement"). In connection
with  the  Legal Services Agreement, we agreed to pay Mr. Loev $4,250 per month,
reimburse  him  for out of pocket expenses and to issue him 30,000 S-8 shares of
our  common  stock,  which  shares were issued to Mr. Loev in February 2006. The
Legal  Services  Agreement  is  in  effect  until December 31, 2006 and services
provided outside of the Legal Services Agreement are to be rendered on an hourly
basis.

                                        5
<PAGE>

BUSINESS OPERATIONS

     The  Company,  through  its  wholly-owned  subsidiary,  Experiential,  is a
comprehensive  event  marketing,  design  and  production  services agency. With
full-service  offices  in Chicago and New York City as well as a sales office in
Los  Angeles,  XA is a leading provider of event services on an outsourced basis
for  corporations, associations and other organizations in the United States and
abroad.  XA  provides  its  clients  with  a  single  source  to  their business
communications  and  event  planning  needs.

     For  sixteen  (16)  years,  XA  has worked with clients around the globe to
design  and  produce  strategic multidimensional, highly stylized and integrated
event  programs.  During the fiscal year ended December 31, 2005, XA planned and
executed over one hundred and fifty (150) events that were attended by more than
an  aggregate  of  approximately  thirty  thousand (30,000) people in the United
States and foreign markets. XA's clients during the year ended December 31, 2005
included  L'Oreal USA, Barnes & Noble (NYSE:BKS), Cargo Magazine, VH1, W Hotels,
Walt  Disney  Co.  (NYSE:DIS),  ABN  AMRO  (NYSE:ABN),  Finesse,  Kenneth  Cole
(NYSE:KCP),  McDonald's  Corporation  (NYSE:MCD),  Starbucks Corp. (NASDQ:SBUX),
UNICEF,  Beaty  products,  Starbucks,  Royal  Caribbean  (NYSE:RCL),  discovery
networks,  British  Telecom,  Heineken  Light  and  the  Wella  Corporation.
Additionally,  XA planned Lennox Louis' wedding in Jamaica during the year ended
2005.

     XA  focuses  on  strategic  growth  that  includes, among other things, the
acquisition  and  development  of  targeted  business  communications  and event
management  companies  in  key  regions  throughout  the  United  States. XA has
developed  a  vertically integrated infrastructure that it believes will enhance
its  ability to continue to provide event services on a national basis. In order
to  provide  its  clients  with a single source solution to their event planning
needs,  XA  offers  a  wide  range of services that encompass the event planning
process  including  general  management,  concept creation, content creation and
execution.  XA  believes  that  its vertically integrated organization, creative
talent,  technological  leadership  and  its  willingness  to  commit capital to
acquire  or  develop  proprietary exhibitions and special events are competitive
advantages in fragmented industry in which most vendors provide a limited set of
services  on  a  local  basis.

Industry and Market Overview

     According to an event marketing study conducted by PROMO Magazine ("PROMO")
in  2004,  and  published  in  its  April  1, 2005 edition, marketers spent $166
billion  in event marketing in 2004. The events industry in the United States is
highly fragmented with several local and regional vendors that provide a limited
range  of  services  in  two main segments: 1) business communications and event
management;  and  2)  meeting,  conferences  and  trade shows. The industry also
consists  of  specialized vendors such as production companies, meeting planning
companies,  and  destination  logistics  companies that may offer their services
outside  of  the  events  industry.

     Integrated  business  communications  and event management services involve
the  design,  production, planning and execution of an organization's message at
conventions,  sales  meetings, conferences, executive presentations, shareholder
and  investor  meetings,  training  sessions  and product launches. The services
range  from  concept and content creation to execution and general management of
the  entire  event.  Specific  services  may  include  staging,  video and media
development  and  production,  production  of  brochures,  handouts  and  other
collateral  materials,  and  the  planning  and  execution  of  meetings  and
conventions.  Local  or regional firms generally offer a limited number of these
services  to  clients.  Most  work  is performed on a project-oriented basis and
services  are  rendered  on  a  fee  basis.

                                        6
<PAGE>

     The  meetings,  conferences  and  trade  shows  segment  is  comprised  of
exhibition  owners  and  managers  who  typically  use  a wide range of business
communications and event management services during production of an exhibition.
This  segment  consists mainly of exhibitions, consumer shows and special events
that  typically  provide  a forum for face-to-face interaction and communication
between  buyers and sellers. While the largest owner-managers of exhibitions are
divisions  of  several  multinational  publishing companies, competition in this
industry  remains  highly  fragmented.

     XA  believes that there is an increasing trend on the part of associations,
historically  the  largest owners and operators of exhibitions, to outsource the
operational  management  and often the ownership of exhibitions as they focus on
their  core  missions  and  seek  to  improve  efficiencies.

     XA  believes that the market or event planning services is positive for two
reasons: 1) XA believes that companies in the United States are increasing their
use  of  events  to  achieve their marketing efforts; and 2) XA believes that an
increasing number of U.S. companies are outsourcing the production and design of
events  to  specialized  firms.  As  a result, XA's management believes that the
market for event services is undergoing a shift towards outsourced management as
organizations  focus  on  their core competencies while at the same time seek to
improve  the  professionalism,  creativity  and cost-efficiency of their events.

     XA  believes  that the events industry revolves on a competitive axis based
on service breadth and quality, creativity, responsiveness, geographic proximity
to  clients,  and  price.  Most  vendors of outsourced event services are small,
local  companies  that  cannot provide the wide range of services, international
coverage,  creative  talent,  purchasing  power  and  technological capabilities
required  by  large  corporations  and  associations. As a vertically integrated
service  provider,  XA  believes  that  it will be able to offer a comprehensive
solution  to these organizations with the assurance of a high quality of service
and  the  opportunity  to  form  a  long-term  relationship.

     XA  competes primarily with a large number of local and regional firms that
also  provide  business  communications  and  event management services. XA also
competes with specialized vendors such as production companies, meeting planning
companies  and  destination  logistics  companies. These primary competitors and
specialized  vendors,  however,  provide a limited range of services relative to
the  services  that  XA  provides.  XA  competes  in its market based on service
breadth,  quality,  creativity,  responsiveness, and geographic proximity to its
clients  and  price. XA differentiates itself from its competitors by offering a
single  source  solution  to  the  market  for  business communication and event
management  services  on  a  national  basis,  employing  creative,  energetic
professionals,  centralizing  its  administration  and purchasing functions, and
using  advanced  communications  technologies.

Principal  Products  and  Services

     XA  offers  a  wide  range  of  services  that encompass the event planning
process  including  general  management, concept creation, content creation, and
execution. XA earns most of its revenue from event services fees that it charges
clients  regarding  the  following  general  service  areas:

     *  Event  Marketing;
     *  Design  and  production;
     *  Meetings,  Conferences  and  Trade  Shows;
     *  Entertainment  and  Show  Production;
     *  Business  Theater  &  General  Sessions;
     *  Mobile  Marketing;
     *  Audio/Visual  Production;
     *  Public Relations;
     *  Destination  Management; and
     *  XA  Interactive  (Digital  Marking).

     XA  earns a management fee when it provides general management services. XA
earns  fees  on  a fee-for-services basis when it undertakes event marketing and
business  communications  projects.

     The  following  is  a  more  detailed  description  of the services that XA
provides  through  its  vertically  integrated  infrastructure:

     The  following  is  a  more  detailed  description  of the services that XA
provides  through  its  vertically  integrated  infrastructure:

General Management Services

     XA  offers  general  management  services  that  provide  its  clients with
centralized  coordination and execution of the overall event. In connection with
providing  general  management  services,  XA  utilizes  an  executive  producer
responsible  for  overseeing  the  production  of  an  event  or exhibition. The
executive  producer coordinates the services that XA provides for the client. XA
provides  the  following  general  management  services:

     *    Project  oversight;
     *    Budget  oversight;
     *    Quality  assurance  and  control;
     *    Project  funding  and  sponsorship  development;
     *    Project  control  and  accountability;
     *    Event  promotion  and  marketing  creation;
     *    Schedule  management;  and
     *    Fulfillment  provider  management.

Concept Creation

     XA  works  with  a  client to craft the client's message, identify the best
means  of  communicating  that  message,  and  develop  cost-effective  creative
solutions.  XA  provides  the  following  concept  creation  services:

     *    Joint  determination  of  client  needs  and  goals;
     *    Market  research  to  support  message  creation  and  communication;
     *    Message  content  design;
     *    Media  selection;  and
     *    Initial  project  pricing  and  budgeting.

Content Creation

     After  the  concept  for  an  event  is created, XA's professionals work to
develop  and  produce  the  client's  message. XA provides the following content
creation  services:

     *    Speech  composition;
     *    Speaker  support-graphics  creation;
     *    Audio/Video  production;
     *    Digital  media  creation;

                                        7
<PAGE>

     *    Collateral  materials  design  and  distribution;
     *    Entertainment  and  speaker  scripting  and  booking;  and
     *    Theme  and  staging  design.

Execution

     XA  uses  internal  resources  to  execute  an event. As the clients' needs
dictate,  however,  XA  can  structure  its  role  so  that it is transparent to
attendants  at  the  event.  XA  provides  the  following  execution  services:

     *    On-site  quality  and  logistics  control;
     *    Hotel  and  venue  coordination  and  buying;
     *    Transportation  management;
     *    Security  coordination;
     *    Telemarketing  services  for  the  sale  of  exhibition  space;
     *    Hospitality  management;
     *    Registration  management;
     *    Cash  and  credit  card  payment  management;
     *    Entertainment  coordination;
     *    Tour  program  design;
     *    Permit  and  approval  procurement;  and
     *    Food  and  beverage  management.

Fulfillment

     Fulfillment  is the last stage in the event process. It includes the actual
provision  of  services  such  as catering, registration, transportation rental,
audio  and  visual  equipment  rental,  decoration  rental and temporary on-site
labor.  XA  offers  fulfillment  services  using  either  internal  resources or
third-party  vendors  as  determined  on  an  event-by-event  basis.

Full Service Offices

     XA  operates  two full-service offices located in Chicago and New York City
as  well as a sales office in Los Angeles. Chicago is home to XA's headquarters,
which  serves  as  the  centralized  base  for administration and purchasing. XA
opened  the  Los Angeles and New York City offices during 2003. XA chose to open
offices  in  New  York  City and Los Angeles to better serve its national client
base  by  providing  existing clients with local offices and staff to coordinate
and  provide  ongoing  integrated communication services. In addition, by having
local  offices  operating in New York City and Los Angeles, XA is better able to
acquire new clients and business opportunities through aggressive local business
development  activities.

     Additionally,  in  December  2005,  XA  Scenes, entered into a lease on the
ninth floor of 636-642 West 28th Street, New York, New York 10001, also known as
the  "Terminal  Warehouse".  We plan to use the Property for office space, event
and  production  space  and  to host certain events in the future. The XA Scenes
lease  is  described  in  greater detail under "Description of Property," below.
When  completed  in  approximately  May  2006,  the 11,500 square foot multi-use
facility  will  consist  of  approximately  5,000  square  feet  of  design
production/office  space  and  6,500  square feet of special event space. The XA
Scenes  facility will provide clients with spectacular views of the Hudson River
within  a  state  of  the  art  special  events  facility.

                                        8
<PAGE>

Growth Strategy

     The major focus of XA's growth strategy over the next several years will be
the  acquisition  and  development of targeted business communications and event
management  companies  in  key  regions  throughout  the  United  States.  XA's
management  has  identified  a  number  of  targeted  strategic  acquisition
opportunities  in  the  form  of  business  communications  and event management
companies  in  key  regions  throughout  the  United  States.  XA's  targeted
acquisitions are intended to add geographic coverage to XA's existing businesses
as  well  as  broaden  XA's  service offerings. The initial acquisitions will be
focused  on  business  communications  and  event management companies which are
specialized in the on-site logistical aspects of the business communications and
event management industry, and are located in the Chicago, New York City and Los
Angeles  areas.

     XA  will  also  fuel  growth  through  a broader, carefully designed growth
strategy  that  includes extending relationships with existing clients, building
new  client  relationships,  expanding  its  international  client  base, making
selected  infrastructure  acquisitions,  and  expanding  its media services. The
Company  is  currently  performing  due  diligence  on  a  number  of  potential
acquisitions,  but  has  not  entered  into  a  formal Letter of Intent with any
potential  acquisition  targets.

     XA  believes  that  substantial opportunities exist to expand relationships
with existing clients by cross-selling the full range of XA's services, building
out  its  national  office  network  and  expanding  XA's  service  offerings,
particularly  with  respect  to  XA  events,  multimedia  and corporate branding
capabilities. XA seeks to capitalize on the services provided to one division or
operation  of a client by selling its services to other divisions or operations,
including  their  foreign  operations.  XA  initiated  advertising  and  public
relations  programs  to  enhance  its  brand  recognition  in  the  marketplace.

     As  organizations  focus on their core competencies and seek to improve the
professionalism,  creativity  and  cost-efficiency  of their events, XA believes
they  will continue to outsource the management of events. XA believes that many
opportunities  exist to add new clients with large-scale business communications
and event management needs. XA seeks relationship-building opportunities through
client  referrals  and  its  internal  sales  force.

     XA  believes that multinational organizations headquartered both inside and
outside  of  the  United  States  are  increasingly  interested  in  building
relationships with business communications and event management firms and owners
of  events  who  can  provide  their  services  on  a  worldwide  basis.  XA's
international  client  base continues to grow and in order to better serve these
organizations,  XA  plans  to  aggressively expand its international client base
over  the  next  12  to  24  months.

     XA  believes that as the event industry continues to consolidate there will
be  many domestic and international acquisition opportunities. XA may acquire or
affiliate  with  select  additional companies to expand its client base, further
build out its infrastructure, add new service applications or provide additional
operating  efficiencies  and  synergies.

     XA  currently  provides  digital  communications and multimedia services to
clients  in  such  areas as exhibition promotion, training programs and Internet
home  pages.  XA  designs  and  develops  websites,  CD-ROM / DVD-ROM materials,
promotional  videos,  targeted  marketing  presentations  and  other  multimedia
products.  XA  believes  that continued technological advances, coupled with the
growing  need  of  organizations to more effectively tailor their messages, will
create  opportunities  for  XA to develop new services for clients, particularly
for  business  communications  and  event  management  services.

                                        9
<PAGE>

     As  part of the Company's growth strategy, the Company purchased all of the
assets  of  Fiori,  Inc.  an  event  decor company ("Fiori"), in August 2004, in
exchange  for  40,000  restricted  shares  of  the Company's Common Stock and in
January  2005,  the Company purchased certain assets of Musters, in exchange for
150,000  restricted  shares  of the Company's Common Stock and the assumption of
the  leases  of  Musters  (as  described above in greater detail under "Business
History").

Creative Talent

     A  primary  value  that  XA  brings  to its clients is the creative talent,
energy  and commitment of its employees. XA seeks to attract and retain the best
personnel  by developing attractive compensation, benefits and training programs
and providing long-term career opportunities that its smaller competitors cannot
duplicate.  XA  has  thirty-two  (32)  full-time  employees.

     XA  compliments  its staff with a pool of over 100 professionals hired on a
project-by-project  basis  who  have  distinguished  themselves  through  prior
experience  with  XA.  XA  is not a party to any collective bargaining agreement
with  a  union. From time to time, however, XA does independently contract with,
or hire, union personnel during the production of a particular meeting or event.
XA  considers  itself  to have good relations with its employees and independent
contractors.

     Today,  corporations  are  searching  for  new ways to motivate, excite and
impart  a  message  to  their audience. XA is able to help them accomplish these
goals  by designing a creative platform from which to communicate. For instance,
most  companies  do  not  realize  they  can  afford  to do a concert event with
headline talent because it has never been presented to them as a marketing tool.
Most of XA's programs are more in line with the standard format of events (i.e.,
meetings  and  business  theater).

     Breaking  the traditional mold can be a hard sell to a conservative client,
but  when  XA's  team can demonstrate how hosting one large, memorable event can
save  $250,000  from the marketing budget, and, most importantly, have a greater
impact  on  attendees,  the  client  understands  the  value  of  XA  marketing.

     To  execute  XA's expansion plans, XA has also recruited a number of senior
executives  with  broad and diverse experience managing rapidly growing national
and  international  businesses.

Centralized Administration and Purchasing

     XA  has  centralized its administrative and purchasing functions to enhance
cost  efficiency  and quality control. The corporate headquarters in Chicago are
the  center for administration, MIS, finance, accounting and human resources. XA
has a national client base. XA oftentimes plans and executes multiple events for
different  national  clients  in  a  single  geographic  location. XA negotiates
through  the Chicago office with local vendors in these geographic locations for
the  provision  of services to its national clients. XA repeatedly uses the same
vendors  in these local markets. XA believes that it enjoys purchasing power and
economies  of  scale  greater  than  that  available  to  its local competitors.

Technological Capabilities

     XA  believes  that  it  can  invest  more  in  technology  than  its  local
competitors  and  thereby become a leader in utilizing advanced technologies. XA
is  able  to allocate its investment in technology over its large national event
base,  whereas  a  local competitor that does not have a national event base may
not  be  willing  to  invest  heavily  in advanced technology. XA currently uses

                                       10
<PAGE>

advanced  communications  technologies  such  as  digitized  presentations  and
multimedia  applications  to provide high quality customer service. In addition,
XA  is  creating  business  communication  applications using media, such as DVD
technology,  plasma screens, interactive video and the satellite communications.

Sales and Marketing

     XA's  client  list  is  comprised  of  a  diverse  mix  of  corporations,
associations,  universities  and  governmental entities. XA has a separate sales
force  that  targets  users  of  business  communications  and  event management
services.  XA's  senior  management  team  and executive producers of events are
frequently  influential  in establishing and expanding new client relationships.
Sales  personnel are compensated through a commission plan based on a percentage
of  either  gross  profits  or  gross  revenues.

     XA's  sales  force  comprises  four (4) full-time sales people who identify
prospects,  respond  to  requests for proposals and create solutions to clients'
requests. XA has created compensation incentives to encourage the sales force to
sell  XA's  wide  range  of  services.  New  business  is  generated  by:

     *    Pursuing  client  referrals  from  existing clients and other business
          contacts;
     *    Expanding  sales to existing clients by providing additional services;
     *    New  client  solicitation;  and
     *    Strategic  acquisitions.

     An  executive  sales  person  and an executive producer will serve a large,
national  client  and  maintain  the  ongoing client relationship. The executive
sales  person  will introduce the client to XA's national execution capabilities
and,  together  with  an  executive producer, is responsible for maintaining the
client  relationship  at  the  local  level.  These team leaders develop a close
working  relationship  with  clients  that require a broad range of services for
their  events.  XA staffs a particular project with team members that work under
the  direction of the executive producer. These team members are responsible for
the  overall  project.  The team selectively utilizes other Company resources in
order  to  create  the  concept and content for an event and then to prepare and
execute  the  event.

     In  general,  XA's  operations  are  generally  organized  to serve the two
principal  areas,  with  separate  groups  responsible  for  the  business
communications  and events management components of XA's business. Professionals
in  XA's  business  communications  group  provide  creative  solutions  for
organizations  seeking  to  develop  and execute conventions, meetings and other
means  of  communicating  with their intended audiences. XA's event planning and
destination logistics group, its entertainment production and distribution group
and its multimedia and Internet services group provide support for XA's clients.
XA's  professionals  work  closely  together  to develop, produce and execute an
event  or  communication.

     XA  has  also initiated an advertising and corporate branding initiative to
enhance  its  brand  recognition  in the marketplace. Under this program, XA has
restructured  its  website  and  marketing  materials.

Intellectual Property

     The  Company  is  the owner of the proprietary trademark, "The Experiential
Agency(R)"  (US  Serial No: 78241557). Additionally, the Company has filed for a
trademark  for  "XA"  and "XA Scenes," but has not as of the date of this filing
received  approval  of  such  trademarks.

                                       11
<PAGE>

     The  Company  also owns the rights to the internet domain names, including:

     *    www.gmproductions.com;
     *    www.gmprodutions.net;
     *    www.expagency.com;
     *    www.experientialagency.com;
     *    www.theexperientialagency.com;  and
     *www.musters.com.

     The Company does not own any patents or licenses related to its products or
services.

Competition

     Companies  in  the  events  industry  compete  based on service breadth and
quality, creativity, responsiveness, geographic proximity to clients, and price.
Most vendors of outsourced event services are small, local companies that cannot
provide  the  wide  range  of services, international coverage, creative talent,
purchasing  power  and technological capabilities required by large corporations
and  associations.

     XA  competes  primarily  with a large number of local and regional firms as
well  as  specialized  vendors  such  as  production  companies meeting planning
companies  (such  as  Carat Face-to-Face), entertainment & show production firms
and  destination  logistics companies. Most of these competitors and specialized
vendors  provide a limited range of services relative to XA's service offerings.
As  a  vertically  integrated  service  provider,  we  believe  XA  offers  a
comprehensive  solution  to  client  organizations  with the assurance of a high
quality  of service and the opportunity to form a long-term relationship. At the
national level, XA faces larger competitors such as Jack Morton Worldwide - part
of  the  Interpublic  Group  of  Companies  (IPG:  NYSE), and George P. Johnson.

     We  believe  that  XA  is positioning itself as the Event Marketing Partner
with  its  unique  selling point being the ability to act as a single source for
the  client's  total  event  marketing  needs.  This  would encompass the entire
spectrum  of  services  associated with event marketing, right from strategizing
and  defining  an  event  portfolio,  conceptualization  of  the event theme and
content  creation  to  the final implementation / management of the event itself
and  post  event  Return  On  Investment  assessment.


ITEM 2. DESCRIPTION OF PROPERTY

     The  Company's  corporate headquarters are located in Chicago, Illinois. In
July  2004,  the Company entered into an eight-year lease of approximately 4,600
square  feet  of  office  space  for  its  corporate headquarters. The Company's
current  lease  commitment  is  $10,069  per  month.

     In  August 2003, the Company opened an office in New York City. The Company
leases  this  office  space  from  Thom  Filicia,  Inc.  pursuant to a five year
sublease. The Company's lease commitment is $1,300 per month plus the obligation
to  pay  utilities.

     The  Company  also  has  offices in Los Angeles, California. On January 15,
2004, the Company entered into a four-year and seven-month lease for this office
space  from Gilmore North Market, LLC. The Company's current lease commitment is
$1,750  per  month  plus  the  obligation  to  pay  utilities.

                                       12
<PAGE>

     On December 23, 2005, XA Scenes, Inc., our wholly owned subsidiary, entered
into  a Lease, (the "Lease") on the ninth floor of 636-642 West 28th Street, New
York,  New  York  10001, also known as the "Terminal Warehouse" (the "Property")
with  Waterfront  NY Realty Corp. ("Landlord"). The Lease has a term of ten (10)
years  (the  "Term"),  and  will commence upon thirty (30) days notice after the
completion  of  certain  improvements  by  the Landlord (as described below). We
agreed  to  pay  initial annual rent under the Lease equal to $260,000 per year,
which  rent  increases at the rate of 3% per year (with the rate of rent for the
10th  year  of the Lease being $350,000), payable monthly at the initial rate of
$21,666.66  per  month.  In  connection with the lease, we agreed to deposit two
months  rent  ($43,333,333)  with the Landlord, which deposit we are required to
increase  in  the  future in connection with the 3% annual increases in rent for
the  Property.

     We  plan  to  use the Property for office space, event and production space
and  to  host  certain  events  in  the  future.

ITEM 3. LEGAL PROCEEDINGS

     Our  wholly  owned subsidiary, The Experiential Agency, Inc., formerly G/M!
Productions,  Inc.,  an  Illinois  corporation has a pending lawsuit, Erie West,
L.L.C.,  v.  G/M!  Productions,  Inc.,  No. 04 M1 137777, with one of our former
landlords,  in  the  Circuit  Court  of Cook County, Illinois. The lawsuit is in
connection  with  office  space we previously leased from Eire West, L.L.C. (the
"Landlord"),  at  308  West  Erie Street, Chicago, Illinois. The Landlord in its
First Amended Verified Complaint, alleged that we failed to provide the Landlord
a  cash  deposit  or  new  standby  letter of credit when our previous letter of
credit  expired;  and  that  the  Landlord is owed money for unpaid rental fees,
which  it  alleged  we  stopped  paying under our lease with Landlord on July 1,
2004, which lease was to run until March 31, 2008.

     We  filed  an  Answer  and  Affirmative  Defenses to First Amended Verified
Complaint to the Landlord's claims in the Circuit Court of Cook County, Illinois
on  May  31,  2005 (the "Answer"). In the Answer, we pleaded certain affirmative
defenses,  including  that  we have fully performed all conditions and covenants
under  the  lease,  and  that  we  are therefore not in default; that we validly
terminated  the  lease on June 30, 2004, after giving previous notice on several
occasions  to  the  Landlord, as a result of the fact that we were prevented the
use  and quiet enjoyment of the premises; and that the Landlord had the duty and
obligation  at  all  times  to  take  reasonable  steps  to mitigate the damages
sustained (the "Affirmative Defenses").

     Since  the  filing  of  our Answer, the Landlord has filed Second and Third
Amended  Verified  Complaints,  and  we  have  answered  such  complaints.  The
Landlord's  Third  Amended  Verified  Complaint  alleged damages for our alleged
breach  of the lease and alleged damages for prospective rent. The total damages
asked  for  by  the  Landlord  in  the  Third  Amended  Verified Complaint total
approximately  $309,710 plus interest. On February 28, 2006, we filed our Answer
and  Affirmative Defenses to Third Amended Verified Complaint, whereby we denied
certain  of  the  Landlord's  claims  and  asserted  our  Affirmative  Defenses.

     In  March 2006, we received notice of a lawsuit filed against XA, Inc., our
wholly  owned subsidiary, The Experiential Agency, Inc., and our Chief Executive
Officer  and  Director, Joseph Wagner, Chief Operating Officer, Jean Wilson, and
one  of  our employees, Marcy Manley, individually, by our former employee, Lara
Shipp ("Shipp"). The lawsuit was filed in the Northern District of Illinois. The
lawsuit  alleges damages in connection with our discharge of Shipp, alleges that
we  failed  to  pay  her  certain commissions which she was due and that she was
denied  rights  under  the  Family  Medical Leave Act. Additionally, the lawsuit
alleges  breach  of  contract, declaratory relief regarding her interests in the
Company, promissory estoppel, tortious interference with contract and fraudulent
inducement.  Shipp  alleges that her employment contract with us entitled her to
commissions  of  gross  revenues  on  reoccurring  business  and  that  she  was
terminated  in  violation  of Family and Medical Leave Act ("FMLA"). The lawsuit
asks for all wages, benefits and other compensation that she lost as a result of
her  alleged  termination  in  violation  of  FMLA,  front  pay  and  reasonable
attorney's  fees.  Shipp also alleges that we violated the Illinois Wage Payment
and  Collection  Act  and  alleges that she is due commissions and other amounts

                                       13
<PAGE>

greater  than  $100,000  in  unpaid  commissions  and  automobile reimbursement,
attorney's  fees,  pre  and  post  judgment  interest  and  punitive  damages
Furthermore,  Shipp  alleges  that she is due an ownership interest in XA, Inc.,
which  is larger than her current stake, to be proven at trial. The lawsuit also
asks  for  all  such other relief as the court deems just and equitable. We, The
Experiential  Agency,  Inc.,  and  the  individual  employees  deny  Ms. Shipp's
allegations  in total and intend to vigorously contest them in the proper forum.
To  this end, we have engaged legal counsel with whom we are actively working in
order  to  properly  defend  this  case.

     The  Company  is  not  aware of any pending legal proceeding other than the
ones  described  above, to which it is a party which is material to its business
operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     At  the  Company's  annual  meeting  of shareholders, which was held at the
Company's  Chicago  offices  on  December  19,  2005  ("Meeting"), the Company's
majority  shareholders voted to approve the filing of a Certificate of Amendment
(the  "Amendment") to its Articles of Incorporation and to approve the Company's
2005  Stock Incentive Plan (the "Plan"). The number of shares of common stock of
the  Company outstanding as of the record date of the Meeting was 3,683,750, the
number  of  shares  of  Series  A Preferred Stock outstanding was three (3). The
Company's  common  stock was able to vote one vote per each outstanding share of
common  stock  and the preferred stock was able to vote 1,278,036 votes for each
share  of preferred stock due to the face that the Series A Preferred Stock have
the  right,  voting  in  aggregate,  to vote on all shareholder matters equal to
fifty-one percent (51%) of the total vote. As a result of the outstanding common
and  preferred  stock,  the  total voting shares able to vote at the Meeting was
7,517,857  shares. The number of shares which voted to approve the Amendment and
the  Plan  was  5,878,340 shares, which represented a majority of the issued and
outstanding  shares  of  the Company and the unanimous vote of the voting shares
represented  at  the  Meeting.

     The  Company  filed the Amendment to its Articles of Incorporation with the
Secretary  of  State  of Nevada, which became effective on December 19, 2005, to
increase  its  authorized shares, reauthorize the par value of its common stock,
reauthorize  its  preferred  stock  and  to  reauthorize  the  par  value of its
preferred stock. The Amendment increased the authorized shares of the Company to
Twenty  Million (20,000,000) shares of common stock, re-authorized the par value
of  $0.001  per  share,  re-authorized Five Hundred Thousand (500,000) shares of
preferred  stock,  and  re-authorized  the  par  value  of  $0.001  per share of
preferred  stock.

     Shares  of  the  preferred  stock of the Company may be issued from time to
time  in one or more series, each of which shall have distinctive designation or
title as shall be determined by the Board of Directors of the Company ("Board of
Directors")  prior  to the issuance of any shares thereof. Preferred stock shall
have  such  voting  powers,  full  or  limited,  or  no  voting powers, and such
preferences  and  relative,  participating, optional or other special rights and
such  qualifications, limitations or restrictions thereof, as shall be stated in
such  resolution  or resolutions providing for the issue of such class or series
of preferred stock as may be adopted from time to time by the Board of Directors
prior  to the issuance of any shares thereof. The number of authorized shares of
preferred  stock  may  be  increased  or  decreased (but not below the number of
shares  thereof  then  outstanding)  by the affirmative vote of the holders of a
majority  of  the voting power of all the then outstanding shares of the capital
stock  of  the  Company entitled to vote generally in the election of directors,
voting together as a single class, without a separate vote of the holders of the
preferred  stock,  or  any  series thereof, unless a vote of any such holders is
required  pursuant  to  any  preferred  stock  designation.

     The  Plan  was  also approved by the Company's majority shareholders at the
Meeting.  Subject  to  adjustment  in  connection  with  the  payment of a stock
dividend,  a  stock  split or subdivision or combination of the shares of Common

                                       14
<PAGE>

Stock,  or  a  reorganization or reclassification of the Company's common stock,
the  maximum  aggregate  number  of  shares  of common stock which may be issued
pursuant  to  awards  under  the  Plan  is  two  million  (2,000,000)  shares.

     The  Plan  is  intended to secure for the Company the benefits arising from
ownership  of  the  Company's common stock by the employees, officers, Directors
and  consultants of the Company, all of whom are and will be responsible for the
Company's future growth. The Plan is designed to help attract and retain for the
Company,  personnel  of  superior  ability  for  positions  of  exceptional
responsibility,  to  reward  employees,  officers, Directors and consultants for
their  services  to  the  Company and to motivate such individuals through added
incentives  to  further  contribute  to  the  success  of  the  Company.

     The  Plan  is  attached  as  Appendix  B  to  the  Company's Definitive 14c
Information  Statement  filed  with  the  Securities  and Exchange Commission on
November  28,  2005,  and  incorporated  herein  by  reference.





                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     "Bid"  and  "asked"  offers  for  the common stock are listed on the NASDAQ
OTC-Bulletin  Board  published  by  the  National  Quotation  Bureau,  Inc.  The
Company's  common  stock  began  regular trading during the third quarter of the
fiscal year ended December 31, 2003. The trading symbol for the Common Stock was
originally  "SYSC",  and  was changed to "EXAG" in connection with the Company's
name  change on December 11, 2003, and was later changed to "XAIN" in connection
with  the  Company's  name  change  on  December  9,  2004.

     The  following  table  sets  forth  the  high  and  low  bid prices for the
Company's  common  stock  for  the  periods  indicated as reported by the NASDAQ
OTC-Bulletin  Board.  The quotations reflect inter-dealer prices, without retail
mark-up,  mark-down  or  commission  and  may not represent actual transactions.

                                                      BID PRICES*
               QUARTER  ENDED                    HIGH             LOW
               --------------                    ----             ---
               December 31, 2005                 $0.70          $0.30
               September 30, 2005                $0.55          $0.33
               June 30, 2005                     $1.35          $0.38
               March 31, 2005                    $2.50          $1.15

               December 31, 2004(1)              $4.20          $1.55
               September 30, 2004               $16.20          $2.40
               June 30, 2004                    $36.00          $8.00
               March 31, 2004(2)                $27.60          $1.25


*    The high  and  low  bid  prices  listed retroactively take into account the
     stock  splits  listed  under  footnote  (1)  and  (2)  below.

(1)  The  Company  affected a 1 for 20 reverse stock split effective December 9,
     2004.

(2)  The  Company  affected  a 13 to 1 forward stock split effective February 2,
     2004.

                                       15
<PAGE>

     There  were  approximately  40  holders of record of the Common Stock as of
March  23,  2006. The Company has never paid a cash dividend on its Common Stock
and  does  not  anticipate  the  payment  of  a cash dividend in the foreseeable
future.  The  Company  intends  to reinvest in its business operations any funds
that  could  be  used  to  pay  a  cash  dividend. The Company's Common Stock is
considered  a  "penny  stock"  as  defined in the Commission's rules promulgated
under  the Exchange Act. In general, a security which is not quoted on NASDAQ or
has  a  market price of less than $5.00 per share where the issuer does not have
in  excess  of  $2,000,000  in net tangible assets (none of which conditions the
Company  meets)  is  considered  a penny stock. The Commission's rules regarding
penny stocks impose additional sales practice requirements on broker-dealers who
sell  such securities to persons other than established customers and accredited
investors (generally persons with net worth in excess of $1,000,000 or an annual
income  exceeding  $200,000  or  $300,000  jointly  with  their  spouse).  For
transactions  covered  by  the  rules,  the  broker-dealer  must  make a special
suitability  determination for the purchaser and receive the purchaser's written
agreement  to  the  transaction  prior  to  the sale. Thus, the Rules affect the
ability of broker-dealers to sell the Company's shares should they wish to do so
because  of  the  adverse  effect  that  the  Rules have upon liquidity of penny
stocks.  Unless  the transaction is exempt under the Rules, under the Securities
Enforcement  Remedies  and  Penny  Stock  Reform  Act  of  1990,  broker-dealers
effecting  customer  transactions  in penny stocks are required to provide their
customers  with  (i)  a risk disclosure document; (ii) disclosure of current bid
and  ask  quotations  if  any;  (iii)  disclosure  of  the  compensation  of the
broker-dealer  and  its  sales  personnel  in  the transaction; and (iv) monthly
account  statements  showing  the  market  value of each penny stock held in the
customer's  account.  As  a result of the penny stock rules the market liquidity
for  the Company's securities may be severely adversely affected by limiting the
ability  of  broker-dealers  to sell the Company's securities and the ability of
purchasers  of  the  securities  to  resell  them.

SECURITIES ISSUED DURING THE YEAR ENDED DECEMBER 31, 2005

     In  June  2004,  the  Company entered into a Consulting Agreement with Loev
Corporate  Filings,  Inc.  ("Filings") for Edgar filing services for one year in
exchange for 5,000 S-8 registered shares of Common Stock, which was subsequently
revised  in  January  2005, to include the Company's Edgar filing services until
May 2006, for an additional 30,000 S-8 registered shares of the Company's Common
Stock.  The  agreement  with  Filings was revised in May 2005, with an effective
date  of April 1, 2005, for additional consideration of 10,000 shares to be paid
to  Filings.  The  new  agreement  provides for Filings to vest a portion of the
40,000  shares  on  the  last  day  of  each month covered by the new agreement.
Filings  vested  17,060  shares  on  April 30, 2005 (1,765 shares for each month
January  to April 2005, and 10,000 shares as consideration for entering into the
new  agreement),  pursuant  to  the  new  agreement  and  will  continue to vest
one-seventeenth  (1/17)  of the remaining shares, or 1,765 shares, at the end of
each  month  covered  by the new agreement. As of December 31, 2005, Filings had
vested  an aggregate of 31,240 shares of the Company's Common Stock. Filings was
issued  the  full  amount  of the 40,000 shares in September 2005, pursuant to a
Form  S-8  Registration  Statement.  The President of Filings is the wife of our
Attorney,  David  M.  Loev.

     The  Company  entered  into  an Agreement with its attorney, David M. Loev,
Attorney at Law ("Attorney") in January 2005, whereby Attorney agreed to perform
legal  services  for  the Company until December 2005, for the payment of $8,250
per  month  plus  reimbursement  for expenses and 65,000 shares of the Company's
Common  Stock,  which  the  Company  agreed  to  register  pursuant  to  an  S-8
Registration  Statement.  In  May 2005, Attorney agreed to modify that agreement
for  consideration  of  an  additional  10,000 shares, with an effective date of
April  1,  2005.  The amended agreement calls for Attorney to be paid $8,250 per
month  and  a  total  of 75,000 S-8 registered shares, for legal services to the
Company.  The  75,000  shares  vested  to attorney on the last day of each month
covered  by  the  amended  agreement. Attorney vested 35,000 shares on April 30,
2005, which amount included the 10,000 shares given to Attorney in consideration
for  Attorney modifying the Agreement, and Attorney continued to vest one-eighth
(1/8) of the remaining shares, or 5,000 per month, on the last day of each month

                                       16
<PAGE>

covered  by  the  amended agreement. As of the date of this filing, Attorney had
vested all 75,000 shares of the Company's Common Stock, which shares were issued
to  Attorney  in  September 2005, pursuant to a Form S-8 registration statement.

     In  February 2005, the Company issued 150,000 post reverse-split restricted
shares  of  the Company's Common Stock to Musters & Company, Inc., in connection
with an Asset Acquisition Agreement which was approved by the Company's board of
directors  on  December  29, 2004, and entered into in January 2005. The Company
claims  an exemption from registration afforded by Section 4(2) of the Act since
the  foregoing  issuances  did not involve a public offering, the recipients had
access  to  information that would be included in a registration statement, took
the  shares  for  investment  and  no  resale  and  the Company took appropriate
measures  to  restrict  transfer.

     On June 1 2005, the Company issued an aggregate of 52,500 restricted shares
of  its  Common  Stock  to eleven employees of the Company, in consideration for
services  rendered  to  the  Company.  The  Company  claims  an  exemption  from
registration  afforded  by  Rule 506 of Regulation D under the Securities Act of
1933  (the  "Act"),  for  the  issuance  of  these  shares.

     In November 2005, the Company issued 10,000 shares of its restricted common
stock to an employee, in consideration for services rendered. The Company claims
an  exemption  from  registration  afforded by Section 4(2) of the Act since the
issuance  did  not  involve a public offering, the recipient took the shares for
investment  and not resale and the Company took appropriate measures to restrict
transfer.  No  underwriters  or  agents  were  involved  in  the issuance and no
underwriting  discounts  or  commissions  were  paid  by  the  Company.

     On  December  19,  2005,  the  Company  entered  into  a twelve (12) month,
renewable  consulting agreement with Christopher Spencer, whereby Mr. Spencer is
to  serve  as  our  Director,  described  in greater detail under Employment and
Consulting Agreements below. Pursuant to Mr. Spencer's consulting agreement, the
Company  agreed  to  issue  Mr.  Spencer  an  aggregate of 100,000 shares of our
restricted  Common  Stock,  which  shares  were  to be issued as follows, 25,000
shares  upon  his  entry  into  the  consulting agreement, which have since been
issued  to  Mr.  Spencer, 25,000 shares on March 31, 2006, 25,000 shares on June
30,  2006  and  25,000 shares on September 30, 2006 (assuming his employment has
not  been terminated prior to those dates pursuant to the termination provisions
contained  in  the  consulting  agreement). The Company claims an exemption from
registration  afforded  by  Section  4(2)  of the Act since the issuance did not
involve  a public offering, the recipient took the shares for investment and not
resale  and  the  Company  took  appropriate  measures  to restrict transfer. No
underwriters  or  agents  were  involved  in  the  issuance  and no underwriting
discounts  or  commissions  were  paid  by  the  Company.

     On  December 27, 2005, the Company entered into an Agreement with Attorney,
whereby  Attorney  agree  to  be  responsible  for  certain corporate/securities
matters  including  the preparation of and/or review of Schedule 13ds, Form 3's,
Form  4's,  Schedule  13g's, Schedule 14a's, Schedule 14c's, Form 10-QSB's, Form
10-KSB's  and  Form  8-K's  to  be  filed by the Company with the Securities and
Exchange  Commission  and  the review of our press releases (the "Legal Services
Agreement"). In connection with the Legal Services Agreement, the Company agreed
to  pay  Attorney $4,250 per month, reimburse him for out of pocket expenses and
to  issue him 30,000 S-8 shares of our common stock, which shares were issued to
Attorney  in  February  2006.  The  Legal  Services Agreement is in effect until
December  31, 2006 and services provided outside of the Legal Services Agreement
are  to  be  rendered  on  an  hourly  basis.

RECENT ISSUANCES OF SECURITIES

     On  February  6, 2006, we issued an aggregate of 3,500 restricted shares of
our  Common Stock to two of our employees in consideration for services rendered
to  us.  The  Company  claims an exemption from registration afforded by Section

                                       17
<PAGE>

4(2)  of  the  Act  since  the  issuances did not involve a public offering, the
recipients  took  the  shares for investment and not resale and the Company took
appropriate  measures  to  restrict  transfer.  No  underwriters  or agents were
involved  in the issuance and no underwriting discounts or commissions were paid
by  the  Company.


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

     This  report  contains  forward  looking  statements  within the meaning of
Section  27a  of  the  Securities  Act of 1933 and Section 21e of the Securities
Exchange  Act  of  1934. These forward looking statements are subject to certain
risks  and  uncertainties  that  could cause actual results to differ materially
from  historical results or anticipated results, including those set forth under
"Risk  Factors"  in  this  Management's  Discussion  and  Analysis  of Financial
Condition and Results of Operations" and elsewhere in this report. The following
discussion  and  analysis should be read in conjunction with "Selected Financial
Data"  and  the  Company's  financial  statements  and  notes  thereto  included
elsewhere  in  this  report.

OVERVIEW

     On December 4, 2003, the Company acquired 100% of the outstanding shares of
Experiential pursuant to the Exchange. As a result of the Exchange, the business
of  Experiential  became  the  business  of  the Company, control of the Company
shifted  to  the  former Experiential shareholders, and the Company subsequently
changed  its  name  to  The  Experiential Agency, Inc. For the last sixteen (16)
years,  Experiential  has  been engaged in the business of organizing, promoting
and  managing  events such as business and trade shows, conventions, conferences
and  meetings for corporations, associations and other organizations in the U.S.
and  abroad.  The  Company  later  changed  its  name  to  XA,  Inc.

     In  June  2004,  the  Company  received $1.25 million of debt financing. In
September  2004,  the  Company  received  an  additional  $1.25  million of debt
financing.

MARKETING  STRATEGY

     The  Company  believes  that  there  is  an increasing trend on the part of
associations,  historically  the largest owners and operators of exhibitions, to
outsource  the  operational management and often the ownership of exhibitions as
they  focus  on  their  core  missions  and  seek  to  improve  efficiencies.

     The  Company  believes  that  the events industry revolves on a competitive
axis  based  on  service  breadth  and  quality,  creativity,  responsiveness,
geographic  proximity  to  clients,  and price. Most vendors of outsourced event
services  are  small,  local  companies  that  cannot  provide the wide range of
services,  international  coverage,  creative  talent,  purchasing  power  and
technological capabilities required by large corporations and associations. As a
vertically  integrated  service  provider,  the Company believes that it will be
able to offer a comprehensive solution to these organizations with the assurance
of  a  high  quality  of  service  and  the  opportunity  to  form  a  long-term
relationship.

     The Company differentiates itself from its competitors by offering a single
source  solution  to  the market for business communication and event management
services  on  a  national  basis,  employing  creative, energetic professionals,
centralizing  its  administration  and  purchasing  functions.

COMPARISON OF OPERATING RESULTS

FISCAL  YEAR  ENDED DECEMBER 31, 2005 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
2004

     We  had sales of $10,912,614 for the year ended December 31, 2005, compared
to  sales  of  $8,544,659  for  the year ended December 31, 2004, an increase of
$2,367,955  or  27.7%  from  the prior period. This increase in sales was mainly

                                       18
<PAGE>

attributable to our addition of two business development account managers during
the  fiscal year ended December 31, 2005, which account managers helped us bring
in  new  business  and  increase  our  sales.

     We  had  direct  production costs of $6,767,383 for the year ended December
31, 2005, compared to production costs of $6,206,254 for the year ended December
31,  2004,  which  represented  an  increase  of $561,129 or 9.0% from the prior
period.  This  increase  in  direct  production costs was due to various factors
including  the  increased  cost  of  key  vendors  associated with our projects,
increased  travel expenses, and the negotiated use of certain budget factors and
vendors  by  our  clients,  which caused us to have lower margins on some of our
events.

     Gross  profit  as  a  percentage of sales ("gross profit margin") increased
from  27.4%  for  the  year  ended  December  31, 2004 to 38% for the year ended
December  31,  2005. The increase in gross profit margin was mainly attributable
to  the greater focus of our management on increasing our margins and decreasing
our  direct  production  costs.

     We  had  gross  profit  of $4,145,231 for the year ended December 31, 2005,
compared  to  gross  profit  of $2,338,405 for the year ended December 31, 2004,
which  represented  an  increase in gross profit of $1,806,826 or 77.3% from the
prior  period.

     We  had  total  administrative  expenses  of  $4,001,362 for the year ended
December  31,  2005, compared to total administrative expenses of $3,718,794 for
the  year  ended December 31, 2004, which represented an increase in expenses of
$282,568 or 7.6% from the prior period. This increase in administrative expenses
was  due  to our two new business development employees, which were added during
fiscal  2005,  as  well as the increased expenses related to our acquisitions of
Fiori  and Muster's during the year ended 2004 and 2005, respectively, which are
described  in  greater  detail  above.

     We had total income from operations for the year ended December 31, 2005 of
$143,869,  compared  to  total  loss  from operations of $1,380,389 for the year
ended  December  31,  2004,  which  represented an increase in total income from
operations of $1,524,258 or 110.4% from the prior period. This increase in total
income  from  operations  was  mainly due to our increase in gross profit margin
coupled  with our increased sales for the year ended December 31, 2005, compared
to  the  year  ended  December  31,  2004.

     We  had  other  income  of  $15,079  for  the year ended December 31, 2005,
compared  to other income of $41,865 for the year ended December 31, 2004, which
represented  a decrease in other income of $26,786 or 64% from the prior period.
We had other expenses of $283,594 for the year ended December 31, 2005, compared
to  other  expenses  of  $24,493  for  the  year  ended December 31, 2004, which
represented  an  increase  in  other expenses of 1,057.9% from the prior period.

     We  had  total  tax  provisions of $540,000 for the year ended December 31,
2005,  compared  to  total tax provision of $525,000 for the year ended December
31,  2004,  an  increase  of $15,000 from the prior period. This increase in tax
provision  was  due  to  the  additional  net  loss.

     We  had net loss of $109,646 for the year ended December 31, 2005, compared
to  net loss of $838,017 for the year ended December 31, 2004, a decrease in net
loss  of  $728,371  or 86.9% from the prior period. The decrease in net loss was
mainly due to our increased gross profit margin and increased sales for the year
ended  December  31,  2005  compared  to  the  year  ended  December  31,  2004.
Additionally,  our  net  loss  for  the  year  ended  December  31,  2004,  was
uncharacteristically  high  due to costs associated with a capital campaign, the
addition  of  key personnel, acquisition costs and platform development integral
to  our business plan, as well as legal and accounting costs associated with our
Convertible  Note  funding  (described below) and the preparation of a Form SB-2
Registration  Statement.

                                       19
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     We  had  total  current assets of $2,859,264 as of December 31, 2005, which
included cash of $595,472, accounts receivable of $1,214,492, work in process at
cost  of  $770,562,  prepaid expenses of $36,925, prepaid employment contract of
$64,467  and discount on convertible notes payable of $117,346. This is compared
to total current assets of $1,774,810 as of December 31, 2004, which represented
an  increase  in  total  current  assets  of  $1,084,454  or  61.1%. The prepaid
employment  contract  consisted  of 225,000 shares of the Company's Common Stock
which  were  issued  to the Company's Chief Executive Officer, Joseph Wagner and
70,000  shares of the Company's restricted Common Stock which were issued to the
Company's Chief Operating Officer, Jean Wilson, in August 2004, in consideration
of  their  services  to  the Company. Of Mr. Wagner's 225,000 restricted shares,
75,000  became  fully  vested  as of December 31, 2004, and 75,500 shares became
fully vested as of December 31, 2005. The remaining 75,000 shares are subject to
a risk of forfeiture and will vest December 31, 2006, if Mr. Wagner's employment
is  not  terminated  prior to that date (unless his employment is terminated for
good  reason  by  Mr.  Wagner,  terminated  without  cause  by  the  Company, or
terminated  with  the mutual consent of both Mr. Wagner and the Company). Of Ms.
Wilson's 70,000 restricted shares, 25,000 became fully vested as of December 31,
2004,  and  22,500  shares  became  fully  vested  as  of December 31, 2005. The
remaining  22,500  shares  become  fully  vested  on  December  31, 2006, if Ms.
Wilson's  employment is not terminated prior to that date (unless her employment
is  terminated  for good reason by Ms. Wilson or terminated without cause by the
Company).

     The  main  factors  leading  to the increase in current assets for the year
ended  December 31, 2005, compared to the prior period were a $755,463 or 164.6%
increase in accounts receivable, which was due to increased business development
and  a  $583,958  or 312.9% increase in work in progress at cost, which was also
attributable  to  increased  client  work.

     We  had  total  fixed  assets  of  $135,772  as of December 31, 2005, which
represented $194,491 of equipment, $53,059 of furniture and fixtures and $40,735
of  leasehold  improvements,  less  $152,513  of  accumulated  depreciation.

     We  had  total  other  assets  of $1,578,021 as of December 31, 2005, which
included  deferred  taxes  of  $540,000,  prepaid  employment bonus of $100,000,
deposits  of  $72,712  and  goodwill  of  $865,309. The prepaid employment bonus
consisted  of  prepaid  employment bonuses with the Company's senior management.

     We  had  total  assets  as  of  December  31,  2005  of  $4,573,057.

     We  had  total  liabilities  consisting  solely  of  current liabilities of
$3,766,662 as of December 31, 2005, which included $445,986 of accounts payable,
$4,471 of withheld and accrued taxes, $61,476 of accrued interest, $1,222,229 of
unearned  revenues,  which  were attributable to us better matching our revenues
and  costs  as  described  by  GAAP,  which  caused  a corresponding increase in
unearned  revenues  for  the  year  ended  December  31, 2005, and $2,032,500 of
current  portion  of long term debt. This was compared to current liabilities of
$837,816  as  of  December  31,  2004,  which represented an increase in current
liabilities  of  $2,928,846  from  the  prior  period, and was mainly due to the
$2,032,500 of note payable moving from long-term debt to a current liability, as
well  as  a  $199,860  or  81.2%  increase in accounts payable and a $652,543 or
114.5%  increase  in  unearned revenues as of December 31, 2005, compared to the
prior  period.

     We  had  negative  net working capital of $907,398 as of December 31, 2005.

     We had net cash used in operating activities of $311,126 for the year ended
December  31,  2005,  which  was  mainly attributable to an increase in accounts
receivable  of  $755,463, which was due to increased client work, an increase in
work  in  progress  of  $583,956  and  net  loss  of  $109,646, as well as other
non-significant line items, which were offset by an increase in accounts payable
of  $199,860  and  an  increase  in  unearned revenue of $652,543, as well as an
increase  in  other  non-significant line items, for the year ended December 31,
2005,  compared  to  the  year  ended  December  31,  2004.

     We  had  $80,825  of  net cash used by investing activities for the quarter
ended  December 31, 2005, which consisted of $15,826 of purchase of fixed assets
in  connection  with  IT  equipment,  and  $64,999  of  increase  in deposits in
connection  with  XA  Scenes  and  a  lease  for  the  space  in  New  York.

                                       20
<PAGE>

     We  believe  that  trends  in  the  event marketing industry include larger
budgets  and  bigger  events. According to an event marketing study conducted by
PROMO  Magazine  ("PROMO")  in 2004, and published in its April 1, 2005 edition,
marketers  spent $166 billion in event marketing in 2004, a 9% increase from the
previously.  The  same article in Promo, entitled "Buzz Gets Louder" states that
on average companies spent 25% of their budgets for event marketing, which is up
from  only  10.7%  of  their  budgets  from  the  prior  year.

     The  Company  requires  $1  to $5 million of financing to support strategic
acquisitions  and  the current expansion plan for the next 18 to 24 months. This
financing is in addition to $2.5 million already raised. The Company received an
aggregate  of $2.5 million of Convertible Note financing from five (5) unrelated
parties.  In  connection  with the Convertible Note financing, we issued Class A
Warrants  to purchase 250,000 shares of our Common Stock at an exercise price of
$9.60  per  share  and Class B Warrants to purchase 500,000 shares of our Common
Stock  at  an  exercise  price  of $5.00 per share. The Class B Warrants expired
unexercised  on September 3, 2005. There is currently $2,032,500 remaining under
the  principal  amounts  of  the  Notes  (not  including  any accrued and unpaid
interest),  of  which approximately one-half is due in June 2006 and one-half is
due  in  September 2006. Currently the Company does not have enough cash on hand
to  pay  the  amounts  due  on  the  Notes.

     A  substantial  portion of the Company's investment capital will be used to
finance  the  expansion  of  the  Company's  business  in  accordance  with  its
acquisition  strategy.  To  the  extent  that  the  proceeds  are  not  used for
acquisitions,  such proceeds will be used for general corporate purposes and for
working capital needs. The amount and timing of such uses will vary depending on
the  availability  of  acquisition  opportunities.  Pending  such  uses, the net
proceeds  will  be  invested  in  short-term  investment  grade  securities.

     As  of  the  date  of this Report, the Note Holders have purchased, and the
Company  has  issued, all of the Convertible Notes having an aggregate principal
amount  of $2,500,000. Of the $2,500,000 that the Company owed, the Note Holders
have  previously  converted  $467,500  of  principal  and  $4,562.33  of accrued
interest into 94,154 post split shares of Common Stock, leaving $2,032,500 still
owed  to  the  Note  Holders  as  of  the date of this filing, not including any
accrued  and  unpaid  interest.

     The  Company has a line of credit agreement which it entered into on August
12,  2004,  with  a bank for $750,000. The note was due August 12, 2005, and the
interest varies at 0.25% over the bank's prime rate. The Company's assets secure
the note. The balance outstanding under this line of credit at December 31, 2005
was  $0.  Prior  to the expiration of the line of credit, the line of credit was
renewed  for another year under the same terms and conditions, however, the line
of  credit  was  increased  to  $1,000,000.

     While  the  Company is not currently a party to any agreements with respect
to  any  acquisitions,  it  is  possible  that  an  agreement  in principle or a
definitive  agreement  as  to one or more acquisitions will be executed prior to
the  completion of the current capital raising efforts. The Company is currently
performing  due  diligence  on  a  number of potential acquisitions, but has not
entered  into  any Letter of Intents for any potential acquisitions. The capital
requirements  as  stated  will  be  sufficient to complete the Company's initial
acquisition  and  expansion phase over the next 18 to 24 months. The Company may
require  additional  investment  capital  in  the  future  to support additional
strategic  acquisitions  and  further  expansion  initiatives.

     At  this time, no additional financing has been secured. The Company has no
commitments  from  officers,  directors  or  affiliates  to provide funding. Our
growth  and  continued operations could be impaired by limitations on our access
to  the  capital  markets.  Without  additional  financing,  we can continue our
operations.  However, if we are unable to obtain additional financing upon terms
that  management  deems  sufficiently  favorable,  or  at  all,  it would have a
material  adverse  impact  upon our ability to pursue our expansion strategy and
repay  the  Notes.  There  can be no assurance that capital from outside sources
will  be  available,  or  if such financing is available, it may involve issuing
securities senior to our Common Stock or equity financings which are dilutive to
holders  of  our  Common  Stock.  In  addition,  in  the  event  we do not raise
additional  capital from conventional sources, it is likely that our growth will
be restricted and we may need to scale back or curtail implementing our business
plan.

                                       21
<PAGE>

     Due  to  the  substantial  amount  of  money which we still owe to the Note
Holders,  of  which  half is due in June 2006 and half in September 2006, we may
seek  to enter into acquisitions or mergers in the future, which could result in
a  restructuring,  change  of  control and/or a change in our business focus. In
addition,  the result of such a transaction could be significant dilution to the
then  current  shareholders.

                                  RISK FACTORS
                                ----------------

                         RISKS RELATING TO THE COMPANY

WE HAVE A PRESENT NEED FOR CAPITAL IN ADDITION TO $2.5 MILLION ALREADY RAISED.

     It  is  imperative  that  we  raise $1 to $5 million of financing to pursue
additional  acquisitions if the opportunity arises, which is in addition to $2.5
million  already  raised, and $2,032,500 which we still owe to the Note Holders.
During  2004,  we  received  an  aggregate  of  $2.5 million of Convertible Note
financing  from  five  (5) unrelated parties. In connection with the Convertible
Note  financing,  we  issued  Class A Warrants to purchase 250,000 shares of our
Common  Stock  at  an  exercise price of $9.60 per share and Class B Warrants to
purchase  500,000  shares  of our Common Stock at an exercise price of $5.00 per
share,  which have since expired. At this time, no additional financing has been
secured. Our growth and continued operations could be impaired by limitations on
our  access  to the capital markets. There can be no assurance that capital from
outside  sources  will  be available, or if such financing is available, that it
will  be on terms that management deems sufficiently favorable. If we are unable
to  obtain  additional  financing  upon terms that management deems sufficiently
favorable,  or  at all, it would have a material adverse impact upon our ability
to  continue  our business operations and pursue our expansion strategy. We need
to  raise  additional  capital to repay the Note Holders and as a result, we may
seek  to enter into acquisitions or mergers in the future, which could result in
a  restructuring,  change  of  control and/or a change in our business focus, as
well  as potential dilution to then current shareholders. In the event we do not
raise  additional  capital  from conventional sources, there is every likelihood
that  we  may  need  to  scale  back  or curtail implementing our business plan.

WE HEAVILY DEPEND ON JOSEPH WAGNER AND JEAN WILSON.

     The  success  of  the Company depends heavily upon the personal efforts and
abilities  of  Joseph  Wagner  and  Jean  Wilson.  Joseph  Wagner entered into a
consulting  agreement  with  the Company and Mr. Wagner serves as the Company's,
Chief  Executive Officer, President and Secretary. Mr. Wagner is also a director
of  the  Company.  Mr.  Wagner  may  engage  in business activities or interests
outside of the Company which are not adverse or competitive to the Company. Jean
Wilson,  serves  as  the  Company's  Chief Operating Officer, Treasurer and as a
director  of  the  Company pursuant to an employment agreement with the Company.
Mr.  Wagner  and  Ms.  Wilson  may voluntarily terminate their employment at any
time.  The  loss  of  Mr. Wagner, Ms. Wilson or other key employees could have a
material  adverse  effect  on  our  business, results of operations or financial
condition.  In addition, the absence of Mr. Wagner or Ms. Wilson may force us to
seek  a  replacement  who may have less experience or who may not understand our
business  as  well,  or  we  may  not  be  able  to find a suitable replacement.

                                       22
<PAGE>

OUR  ABILITY  TO OPERATE SUCCESSFULLY AND MANAGE OUR POTENTIAL GROWTH DEPENDS ON
OUR ABILITY TO ATTRACT AND RETAIN HIGHLY QUALIFIED TECHNICAL, MANAGERIAL, SALES,
MARKETING  AND  FINANCIAL  PERSONNEL.

     The  Company's  success  heavily  depends  upon  its ability to attract and
retain  highly  qualified  technical, managerial, sales, marketing and financial
personnel. The Company faces competition for qualified personnel in these areas.
The  Company  cannot  be  certain  that  it  will  be able to attract and retain
qualified  personnel.  The  Company's  inability  to  hire and retain additional
qualified  personnel  in  the future could have a material adverse effect on our
business,  results  of  operations  or  financial  condition.

OUR INDUSTRY IS HIGHLY COMPETITIVE.

     The  event  production  industry  is highly competitive and fragmented. The
Company  expects competition to intensify in the future. The Company competes in
each  of its markets with numerous national, regional and local event production
companies,  many  of  which have substantially greater financial, managerial and
other  resources  than  those  presently  available  to  the  Company.  Numerous
well-established companies are focusing significant resources on providing event
marketing,  design  and production services that will compete with the Company's
services. No assurance can be given that the Company will be able to effectively
compete  with  these  other  companies  or that competitive pressures, including
possible  downward  pressure  on  the  prices  it  charges  for its products and
services,  will  not  arise.  In  the  event that the Company cannot effectively
compete  on a continuing basis or competitive pressures arise, such inability to
compete  or  competitive  pressures  will  have a material adverse effect on the
companies  business,  results  of  operations  and  financial  condition.

WE  CURRENTLY  HAVE  A  PENDING  LAWSUIT WITH ONE OF OUR FORMER LANDLORDS, WHICH
LANDLORD  ALLEGED  APPROXIMATELY $309,710 IN DAMAGES AS WELL AS A LAWSUIT WITH A
FORMER  EMPLOYEE  WHO  ALLEGES  APPROXIMATELY  $133,329  IN  DAMAGES.

     Our  former  landlord,  Eire West, L.L.C. (the "Landlord"), filed a lawsuit
against  us  (described  in  greater  detail  under  "Legal Proceedings," above)
claiming  approximately  $309,710  in  damages and alleging that the Landlord is
owed money for unpaid rental fees, which it alleged we stopped paying rent under
on  July  1, 2004, which lease was to run until March 31, 2008. We filed answers
to  the  Landlord's  allegations,  denying  certain  allegations  and  asserting
affirmative  defenses to others. Our former employee, Lara Shipp filed a lawsuit
against  us  (described  in  greater  detail  under  "Legal Proceedings," above)
claiming  approximately $133,329 in damages, plus punitive damages, which amount
may increase after the discovery phase of the trial, if any. If we are forced to
pay  the  approximately $309,710 in alleged damages and/or additional amounts in
attorney's  fees and interest owed to our form landlord, and/or if we are forced
to  pay  the  $133,329 or more which our former employee alleges she is due, our
cash  on  hand  would  be  severely impacted and our business could be adversely
affected.

OUR GROWTH WILL PLACE SIGNIFICANT STRAINS ON OUR RESOURCES.

     The  Company's  growth  is  expected  to  place a significant strain on the
Company's  managerial,  operational and financial resources as Joseph Wagner and
Jean Wilson are our only officers. The Company has limited employees in addition
to its small number of officers. Furthermore, as the Company receives contracts,
the  Company  will  be  required  to  manage multiple relationships with various
customers and other third parties. These requirements will be exacerbated in the

                                       23
<PAGE>

event  of further growth of the Company or in the number of its contracts. There
can  be  no assurance that the Company's systems, procedures or controls will be
adequate to support the Company's operations or that the Company will be able to
achieve  the  rapid  execution  necessary to successfully offer its services and
implement  its  business  plan. The Company's future operating results will also
depend  on  its ability to add additional personnel commensurate with the growth
of  its  business.  If  the  Company is unable to manage growth effectively, the
Company's  business,  results  of  operations  and  financial  condition will be
adversely  affected.

JOSEPH WAGNER AND JEAN WILSON CAN VOTE AN AGGREGATE OF 54.5% OF OUR COMMON STOCK
AND  CAN  EXERCISE  CONTROL  OVER  CORPORATE  DECISIONS.

     Joseph Wagner and Jean Wilson can vote an aggregate of 4,173,283 shares (or
54.5%)  of  our  outstanding  Common Stock which includes 2,603,602 votes due to
their  aggregate  ownership  of  two  shares  of Series A Preferred Stock. Frank
Goldstin,  our  former  Director and former Chief Executive Officer entered into
voting  agreements with Joseph Wagner and Jean Wilson with respect to a total of
1,088,480  shares  of  Common Stock owned by Mr. Goldstin. The general affect of
the  voting  agreements  is  that Mr. Wagner and Ms. Wilson can vote 544,240 and
544,240  shares,  respectively, out of 1,523,032 shares of Common Stock owned by
Mr.  Goldstin  in  addition  to  Common  Stock  that  Mr.  Wagner and Ms. Wilson
otherwise  respectively  own.  Additionally, on December 28, 2004, the Company's
Board  of  Directors  approved  the  issuance  of  Three  (3) shares of Series A
Preferred  Stock, One (1) each to Frank Goldstin, Jean Wilson, and Joseph Wagner
for  services  rendered.  The  three shares of Series A Preferred Stock have the
right,  voting  in  aggregate,  to  vote  on  all  shareholder  matters equal to
fifty-one  percent  (51%) of the total vote. Accordingly, Joseph Wagner and Jean
Wilson  will  exercise  control  in  determining  the  outcome  of all corporate
transactions  or  other  matters,  including the election of directors, mergers,
consolidations, the sale of all or substantially all of our assets, and also the
power  to  prevent or cause a change in control. The interests of Mr. Wagner and
Ms.  Wilson  may  differ  from  the interests of the other stockholders and thus
result  in  corporate  decisions  that  are  adverse  to  other  shareholders.

                       RISKS RELATING TO OUR COMMON STOCK
                      -----------------------------------

THE MARKET PRICE OF OUR COMMON STOCK HISTORICALLY HAS BEEN VOLATILE.

     The  market  price  of  our  Common  Stock  historically  has  fluctuated
significantly based on, but not limited to, such factors as general stock market
trends,  announcements  of  developments  related  to  our  business,  actual or
anticipated  variations  in  our  operating results, our ability or inability to
generate  new  revenues,  conditions and trends in the event production industry
and  in  the  industries  in  which  our  customers  are  engaged.

     Our  Common  Stock  is traded on the OTCBB under the symbol XAIN. In recent
years,  the  stock  market in general has experienced extreme price fluctuations
that have oftentimes been unrelated to the operating performance of the affected
companies.  Similarly,  the  market  price  of  our  Common  Stock may fluctuate
significantly  based upon factors unrelated or disproportionate to our operating
performance.  These  market fluctuations, as well as general economic, political
and  market  conditions,  such  as  recessions,  interest rates or international
currency fluctuations may adversely affect the market price of our Common Stock.

                                       24
<PAGE>

THE  COMPANY  HAS  ESTABLISHED  PREFERRED  STOCK  WHICH CAN BE DESIGNATED BY THE
COMPANY'S  BOARD  OF  DIRECTORS WITHOUT SHAREHOLDER APPROVAL AND HAS ESTABLISHED
SERIES A PREFERRED STOCK, WHICH GIVES THE HOLDERS MAJORITY VOTING POWER OVER THE
COMPANY.

     The Company has 500,000 shares of preferred stock authorized. The shares of
preferred  stock  of  the Company may be issued from time to time in one or more
series,  each  of  which shall have distinctive designation or title as shall be
determined by the Board of Directors of the Company ("Board of Directors") prior
to  the  issuance  of  any  shares  thereof. The preferred stock shall have such
voting  powers,  full  or limited, or no voting powers, and such preferences and
relative,  participating,  optional  or  other  special  rights  and  such
qualifications,  limitations  or restrictions thereof as adopted by the Board of
Directors.  On  December 28, 2004, the Company's Board of Directors approved the
issuance  of Three (3) shares of Series A Preferred Stock, One (1) each to Frank
Goldstin, Jean Wilson, and Joseph Wagner for services rendered. The three shares
of  Series A Preferred Stock have the right, voting in aggregate, to vote on all
shareholder  matters  equal  to  fifty-one  percent (51%) of the total vote. For
example, if there are 10,000,000 shares of the Company's common stock issued and
outstanding at the time of a shareholder vote, the holders of Series A Preferred
Stock, voting separately as a class, will have the right to vote an aggregate of
10,400,000  shares,  out  of a total number of 20,400,000 shares voting. Because
the  Board  of  Directors is able to designate the powers and preferences of the
preferred  stock  without  the vote of a majority of the Company's shareholders,
shareholders  of  the  Company  will  have no control over what designations and
preferences  the  Company's  preferred stock will have. Because of the shares of
Series  A Preferred Stock, the holders of the three shares of Series A Preferred
Stock  will  exercise  voting control over the Company. As a result of this, the
Company's  shareholders  will  have  less  control  over  the  designations  and
preferences  of  the  preferred  stock  and  as  a  result the operations of the
Company.

OUR  COMMON  STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE COMMISSION WHICH
LIMITS  THE TRADING MARKET IN OUR COMMON STOCK, MAKES TRANSACTIONS IN OUR COMMON
STOCK  CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR COMMON STOCK.

     Our  Common  Stock  is considered a "penny stock" as defined in Rule 3a51-1
promulgated by Commission under the Securities Exchange Act of 1934. In general,
a  security  which is not quoted on NASDAQ or has a market price of less than $5
per share where the issuer does not have in excess of $2,000,000 in net tangible
assets  is considered a penny stock. The Commission's Rule 15g-9 regarding penny
stocks  impose additional sales practice requirements on broker-dealers who sell
such  securities  to  persons  other  than  established customers and accredited
investors (generally persons with net worth in excess of $1,000,000 or an annual
income  exceeding  $200,000  or  $300,000  jointly  with  their  spouse).  For
transactions  covered  by  the  rules,  the  broker-dealer  must  make a special
suitability  determination for the purchaser and receive the purchaser's written
agreement  to  the  transaction  prior  to  the sale. Thus, the rules affect the
ability  of  broker-dealers  to  sell our Common Stock should they wish to do so
because  of  the  adverse  effect  that  the  rules have upon liquidity of penny
stocks.  Unless  the transaction is exempt under the rules, under the Securities
Enforcement  Remedies  and  Penny  Stock  Reform  Act  of  1990,  broker-dealers
effecting  customer  transactions  in penny stocks are required to provide their
customers  with  (i)  a risk disclosure document; (ii) disclosure of current bid
and  ask  quotations  if  any;  (iii)  disclosure  of  the  compensation  of the
broker-dealer  and  its  sales  personnel  in  the transaction; and (iv) monthly
account  statements  showing  the  market  value of each penny stock held in the
customer's  account.  As  a result of the penny stock rules the market liquidity
for  our  Common  Stock  may  be  adversely  affected by limiting the ability of
broker-dealers  to sell our Common Stock and the ability of purchasers to resell
our  Common  Stock.

                                       25
<PAGE>

     In  addition,  various  state  securities  laws  impose  restrictions  on
transferring  "penny  stocks" and as a result, investors in the Common Stock may
have  their  ability  to  sell  their  shares  of  the  Common  Stock  impaired.

THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS.

     The  Company  has paid no cash dividends on its Common Stock to date and it
is  not  anticipated  that  any  cash  dividends  will be paid to holders of the
Company's  Common  Stock in the foreseeable future. While the Company's dividend
policy will be based on the operating results and capital needs of the business,
it  is  anticipated  that  any  earnings  will be retained to finance the future
expansion  of  the  Company.

OUR  ARTICLES  OF  INCORPORATION, AS AMENDED, AND BYLAWS LIMIT THE LIABILITY OF,
AND  PROVIDE  INDEMNIFICATION  FOR,  OUR  OFFICERS  AND  DIRECTORS.

     Our  Articles  of  Incorporation, as amended, generally limit our officers'
and directors' personal liability to the Company and its stockholders for breach
of  fiduciary  duty  as  an officer or director except for breach of the duty of
loyalty or acts or omissions not made in good faith or which involve intentional
misconduct  or  a  knowing  violation  of law. Our Articles of Incorporation, as
amended,  and  Bylaws  provide indemnification for our officers and directors to
the  fullest extent authorized by the Nevada General Corporation Law against all
expense, liability, and loss, including attorney's fees, judgments, fines excise
taxes  or  penalties and amounts to be paid in settlement reasonably incurred or
suffered  by  an  officer  or  director  in  connection with any action, suit or
proceeding,  whether  civil  or  criminal,  administrative  or  investigative
(hereinafter a "Proceeding") to which the officer or director is made a party or
is  threatened  to  be  made  a  party,  or  in which the officer or director is
involved  by  reason of the fact that he or she is or was an officer or director
of the Company, or is or was serving at the request of the Company as an officer
or  director of another corporation or of a partnership, joint venture, trust or
other  enterprise  whether  the  basis of the Proceeding is alleged action in an
official  capacity  as  an  officer  or director, or in any other capacity while
serving  as  an  officer  or  director.  Thus, the Company may be prevented from
recovering  damages  for certain alleged errors or omissions by the officers and
directors  for liabilities incurred in connection with their good faith acts for
the Company. Such an indemnification payment might deplete the Company's assets.
Stockholders  who  have  questions  respecting  the fiduciary obligations of the
officers  and  directors  of  the  Company should consult with independent legal
counsel.  It  is  the  position  of  the Securities and Exchange Commission that
exculpation  from and indemnification for liabilities arising under the 1933 Act
and  the rules and regulations thereunder is against public policy and therefore
unenforceable.

IF WE ARE LATE IN FILING OUR QUARTERLY OR ANNUAL REPORTS WITH THE SEC, WE MAY BE
DE-LISTED  FROM  THE  OVER-THE-COUNTER  BULLETIN  BOARD.

     Pursuant to new Over-The-Counter Bulletin Board ("OTCBB") rules relating to
the timely filing of periodic reports with the SEC, any OTCBB issuer which fails
to  file  a  periodic report (Form 10-QSB's or 10-KSB's) by the due date of such
report  (not withstanding any extension granted to the issuer by the filing of a
Form  12b-25),  three  (3)  times  during  any  twenty-four (24) month period is
automatically  de-listed  from  the  OTCBB.  Such  removed  issuer  would not be
re-eligible  to  be  listed  on the OTCBB for a period of one-year, during which
time  any  subsequent late filing would reset the one-year period of de-listing.
If  we  are late in our filings three times in any twenty-four (24) month period
and are de-listed from the OTCBB, our securities may become worthless and we may
be  forced  to  curtail  or  abandon  our  business  plan.

                                       26
<PAGE>

IF THERE IS A MARKET FOR OUR COMMON STOCK, OUR STOCK PRICE MAY BE VOLATILE.

     If  there  is a market for our common stock, we anticipate that such market
will  be subject to wide fluctuations in response to several factors, including,
but  not  limited  to:

     (1)  actual  or  anticipated  variations  in  our  results  of  operations;
     (2)  our  ability  or  inability  to  generate  new  revenues;
     (3)  the  number  of  shares  in  our  public  float;
     (4)  increased  competition;  and
     (5)  conditions  and  trends  in  the  market  for event planning services.

     Furthermore,  because  our  Common  Stock  is  traded  on the NASD over the
counter  bulletin  board,  our  stock  price may be impacted by factors that are
unrelated  or  disproportionate  to  our  operating  performance.  These  market
fluctuations, as well as general economic, political and market conditions, such
as  recessions,  interest  rates  or  international  currency  fluctuations  may
adversely affect the market price of our common stock. Additionally, at present,
we  have  a  very limited number of shares in our public float, and as a result,
there  could  be extreme fluctuations in the price of our common stock. Further,
due  to  the  limited  volume  of  our shares which trade and our limited public
float,  we  believe  that  our  stock prices (bid, asked and closing prices) are
entirely  arbitrary,  are not related to the actual value of the Company, and do
not  reflect  the  actual value of our common stock (and in fact reflect a value
that is much higher than the actual value of our Common Stock). Shareholders and
potential investors in our Common Stock should exercise caution before making an
investment  in the Company, and should not rely on the publicly quoted or traded
stock prices in determining our Common Stock value, but should instead determine
value  of  our  Common Stock based on the information contained in the Company's
public  reports,  industry  information,  and  those  business valuation methods
commonly  used  to  value  private  companies.

CRITICAL ACCOUNTING POLICIES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  is  based  upon  our  audited  financial statements, which have been
prepared  in  accordance  with  accounting  principals generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,  and  related  disclosure  of any contingent assets and
liabilities.  On  an  on-going basis, we evaluate our estimates, including those
related  to  uncollectible  receivable,  investment  values,  income  taxes, the
recapitalization and contingencies. We base our estimates on various assumptions
that  we  believe to be reasonable under the circumstances, the results of which
form  the  basis  for  making  judgments  about  carrying  values  of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ  from  these  estimates  under  different  assumptions  or  conditions.

ITEM  7.  FINANCIAL  STATEMENTS

     The  Financial Statements required by Item 310 of Regulation S-B are stated
in  U.S.  dollars  and  are  prepared in accordance with U.S. Generally Accepted
Accounting  Principles.

                                       27
<PAGE>

Pollard-Kelley Auditing Services, Inc.
Auditing Services                               3250 West Market St, Suite 307,
                                                Fairlawn, OH 44333 330-836-2558








             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


Board  of  Directors
XA,  Inc.  and  Subsidiary

We have audited the accompanying balance sheets of XA, Inc. and Subsidiary as of
December  31,  2005  and  2004, and the related statements of income, changes in
stockholders'  equity,  and  cash  flows for each of the two years in the period
ended  December  31, 2005.  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  conduct  our  audits  in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  Those standards require that we
plan  and  perform  the  audit  to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining  on  a  test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial position of the Company at December 31,
2005  and  2004, and the results of its operations and it cash flows for each of
the  two  years  in  the period ended December 31, 2005, in conformity with U.S.
generally  accepted  accounting  standards.

Pollard-Kelley  Auditing  Services,  Inc.

/S/  Pollard-Kelley  Auditing  Services,  Inc.

Fairlawn,  Ohio
January  31,  2006

                                     F-1
<PAGE>

<TABLE>
<CAPTION>

XA, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
December 31, 2005 and 2004

                                              2005         2004
                                          ------------  ------------
<S>                                            <C>           <C>
                           ASSETS
Current Assets
   Cash                                   $    595,472  $  1,037,117
   Accounts receivable                       1,214,492       459,029
   Work in process at cost                     770,562       186,606
   Prepaid expenses                             36,925         2,734
rent Liabilities
   Prepaid employment contract                  64,467        89,324
   Discount on Convertible Notes Payable       177,346             -
   Officer's loans receivable                        -             -
                                          -------------  -----------
      Total Current Assets                   2,859,264     1,774,810
Fixed Assets
   Equipment                                   194,491       166,463
   Furniture and fixtures                       53,059        42,175
   Leasehold improvements                       40,735        40,735
                                          ------------  ------------
                                               288,285       249,373
   Less accumulated depreciation              (152,513)     (124,933)
                                          ------------  ------------
                                               135,772       124,440
Other Assets
   Discount on Convertible Notes Payable             -       310,574
   Deferred taxes                              540,000       525,000
   Prepaid employment bonus                    100,000       162,291
   Deposits                                     72,712        38,180
   Goodwill                                    865,309       808,234
                                          ------------  ------------
                                             1,578,021     1,844,279
                                          ------------  ------------
                                          $  4,573,057  $  3,743,529
                                          ============  ============
    LIABILITIES AND STOCKHOLDERS' EQUITY
CurAccounts payable                       $    445,986   $   246,126
   Accrued payroll                                   -        17,798
   Withheld and accrued taxes                    4,471         4,206
   Accrued interest                             61,476             -
   Unearned revenues                         1,222,229       569,686
   Line of credit                                    -             -
   Current portion of long term debt         2,032,500             -
                                          ------------  ------------
      Total Current Liabilities              3,766,662       837,816
Long-term Debt
   Note payable                                      -     2,032,500
Stockholders' Equity
   Series A preferred stock                          -             -
   Common stock                                  3,719         3,516
   Additional paid in capital                2,213,157     2,170,532
   Retained income                          (1,410,481)   (1,300,835)
   Treasury stock                                    -             -
                                          ------------  ------------
                                               806,395       873,213
                                          ------------  ------------
                                          $ 4,573,057   $  3,743,529
                                          ============  ============

See accompanying notes to financial statements.

</TABLE>

                                     F-2
<PAGE>

<TABLE>
<CAPTION>

XA, Inc. and Subsidiary
CONSOLIDATED INCOME STATEMENT
For the Quarters and Years Ended December 31, 2005 and 2004

                                    4th Quarter   Year ended   4th Quarter    Year ended
                                       2005           2005         2004          2004
                                   -------------  -----------  ------------  ------------
<S>                                    <C>            <C>           <C>           <C>
Revenues
     Sales                         $   3,642,321  $10,912,614  $  1,046,551  $  8,544,659

Cost of goods sold
     Direct production costs           2,424,287    6,767,383     2,197,869     6,206,254
                                   -------------  -----------  ------------  ------------

Gross profit                           1,218,034    4,145,231    (1,151,318)    2,338,405

Administrative expense
     Administrative                    1,244,480    4,001,362       941,000     3,718,794
                                   -------------  -----------  ------------  ------------

Income from operations                   (26,446)     143,869    (2,092,318)   (1,380,389)

Other income and expenses
     Other income                          5,735       15,079        (2,001)       41,865
     Other expenses                      (37,507)    (283,594)      831,110       (24,493)
                                   -------------  -----------  ------------  ------------
                                         (31,772)    (268,515)      829,109        17,372
                                   -------------  -----------  ------------  ------------
Income before taxes                      (58,218)    (124,646)   (1,263,209)   (1,363,017)

Tax provisions
    Tax provisions                       (15,000)     (15,000)            -      (525,000)
                                   -------------  -----------  ------------  ------------

Net Income (Loss)                  $     (43,218) $  (109,646) $ (1,263,209) $   (838,017)
                                   =============  ===========  ============  ============

Earnings per Share
    Average shares outstanding         3,689,806    3,582,866
    Basic                          $       (0.01) $     (0.03)
</TABLE>

                                     F-3
<PAGE>

<TABLE><CAPTION>

XA, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Period from January 1, 2004 through December 31, 2005

                                                                                     Additional                Stock
                                 Series A Preferred Stock   Common Stock --------    Paid-in     Retained   Subscription
                                     Shares       Amount      Shares      Amount     Capital     Deficit      Receivable     Total
                                 ------------  ----------   ---------- ----------  -----------  ----------   -----------  --------
<S>                                   <C>          <C>         <C>         <C>         <C>         <C>          <C>         <C>
Balance January 1, 2004                     -  $        -   52,600,003 $   52,600  $   448,400  $  (90,318)  $  (250,000) $160,682
 Correction of shares outstanding           -           -           13          -            -           -                       -
 Cancellation of Stock Subscription
  agreement                                 -           -   (1,000,000)    (1,000)    (499,000)          -       250,000   (250,000)
 1:20 reverse stock split
  December  2004                            -           -  (49,020,008)   (49,020)      49,020           -             -          -
 Renegotiated Subscription
  agreement                                 -           -       32,188         32      514,968           -             -    515,000
 Shares issue for services                  -           -      633,862        634      141,731           -             -    142,365
 Sale of stock                              -           -        8,750          9      349,991           -             -    350,000
 Additional paid in capital
  from Warrant sales                        -           -            -          -      121,000           -             -    121,000
 Treasury stock acquired and
  shares cancelled                          -           -      (22,969)       (23)          23    (372,500)            -   (372,500)
 Shares issued for acquisition
  August 2004                               -           -       40,000         40      335,960           -             -    336,000
 Shares issued upon conversion of
 Notes payable                              -           -       94,411         94      467,406           -             -    467,500
 Write-off of Discount on Notes
 Payable converted                          -           -            -          -      (96,317)          -             -    (96,317)
 Shares for acquisition
  December  2004                            -           -      150,000        150      337,350           -             -    337,500
 Issue of Series A Preferred                3           -            -          -            -           -             -          -
 Net loss                                   -           -            -          -            -    (838,017)            -   (838,017)
Balance December 31, 2004                   3           -    3,516,250      3,516    2,170,532  (1,300,835)            -    873,213
 Shares issued for services                 -           -      202,500        203       42,625                               42,828
 Net Loss                                   -           -            -          -            -    (109,646)            -   (109,646)
Balance December 31, 2005                   3  $        -    3,718,750 $    3,719  $ 2,213,157  $(1,410,481) $         - $  806,395

</TABLE>

See accompanying notes to financial statements.

                                     F-4
<PAGE>

<TABLE>
<CAPTION>

XA, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Quarters and Years Ended December 31, 2005 and 2004

                                                           4th Quarter   Year ended   4th Quarter   Year ended
                                                              2005         2005          2004          2004
                                                          ------------  -----------  ------------  ------------
<S>                                                           <C>           <C>          <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income/(loss)                                       $    (48,768) $  (109,646) $ (1,263,209) $   (838,017)
  Adjustments to reconcile net earnings to net
    cash provided (used) by operating activities:
      Provision for deferred taxes                                          (15,000)     (525,000)      (525,00)
      Depreciation                                               6,278       27,580         2,914         6,403
      Amortization of Discounts on Notes Payable                33,307      133,228        52,199       117,914
      Stock for services                                             -       42,828                      40,750
    Changes in Current assets and liabilities:
      (Increase) Decrease in Accounts receivable              (289,310)    (755,463)      432,863      (259,360)
      (Increase) Decrease in Work in process                   560,977     (583,956)       99,846      (140,676)
      (Increase) Decrease in Prepaid expenses                  (34,676)     (34,191)       39,636        (2,734)
      (Increase) Decrease in Officers loans                          -            -             -       (53,371)
      (Increase) in Prepaid employment contracts                39,564       87,148      (179,493)     (150,000)
      (Decrease) Increase in Accounts payable                  105,973      199,860       180,441       150,409
      (Decrease) Increase in Accrued payroll                    (1,600)     (17,798)      (42,632)      (50,448)
      (Decrease) Increase in Accrued interest                   61,476       61,476       (17,071)            -
      (Decrease) in Withheld and accrued taxes                     205          265      (273,519)      (64,936)
      Increase (Decrease) in Unearned revenue               (1,037,401)     652,543       569,686       564,025
                                                          ------------  -----------  ------------  ------------
      NET CASH PROVIDED (USED) BY
            OPERATING ACTIVITIES                              (603,975)    (311,126)     (923,339)   (1,205,041)

CASH FLOWS FROM INVESTING ACTIVITIES
       Purchase of Fixed assets                                (15,826)     (38,912)      (63,427)      (96,812)
       (Increase) in Goodwill                                        -      (57,075)     (459,114)     (148,761)
       (Increase) Decrease in Deposits                         (64,999)     (34,532)         (715)      (38,180)
                                                          ------------  -----------  ------------  ------------
       NET CASH (USED) BY INVESTING
            ACTIVITIES                                         (80,825)    (130,519)     (523,256)     (283,753)

CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock                                                            -       824,528       615,000
  Sale of Warrants                                                                              -       121,000
  (Increase) Decrease in Discounts on Convertible Notes                                         -      (524,805)
  Increase in Line of credit                                         -            -             -             -
  Payments on Line of credit                                                                    -      (205,400)
  Decrease in Long - term debt                                       -            -    (2,232,500)    2,500,000
  Increase in Short - term debt                                      -            -     2,032,500      (294,536)
                                                          ------------  -----------  ------------  ------------
      NET CASH USED BY
            FINANCING ACTIVITIES                                     -            -       624,528     2,211,259
                                                          ------------  -----------  ------------  ------------

NET INCREASE (DECREASE) IN CASH                               (684,800)    (441,645)     (822,067)      722,465
CASH ACQUIRED IN ACQUISITION                                         -            -      (307,340)        8,152
CASH AT BEGINNING OF PERIOD                                  1,280,272    1,037,117     2,166,524       306,500
                                                          ------------  -----------  ------------  ------------
CASH AT END OF PERIOD                                     $    595,472  $   595,472  $  1,037,117  $  1,037,117
                                                          ============  ===========  ============  ============

</TABLE>


See accompanying notes to financial statements.

                                     F-5
<PAGE>

                             XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2005

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
----------------------------------------------------------

HISTORY
-------

The Company was incorporated on August 29, 1991 as Goldstin/Mercola Productions,
Inc.  in  Illinois.  On January 4, 1993 the name was changed to G/M Productions,
Inc.  On  December  4,  2003 the Company entered into an exchange agreement with
Synreal  Services  Corp  a  publicly  traded  Nevada  corporation.  The exchange
agreement  resulted  in the exchange of 1,769,231 newly issued shares of Synreal
common  stock  for  all  the  outstanding  shares  of  G/M Productions, Inc.  In
addition  the  shareholder  of  G/M  Productions  entered  into a stock purchase
agreement  with  the  former  officers  and  directors  of  Synreal  whereby the
shareholder  acquired  1,000,000  shares of Synreal common stock.  Synreal was a
shell  at  the time of the acquisition and therefore the acquisition was treated
as  a  reverse  merger  whereby the acquired company is treated as the acquiring
company  for  accounting  purposes.  On  December  9, 2003, the stockholders and
directors  of  the Company passed two resolutions changing the Company's name to
The  Experiential  Agency  and  authorizing  a  13:1  forward  stock  split.

On  February 24, 2004 the Company issued 1,150,000,  pre-reverse split shares of
common  stock  to  two  entities as a finder's fee in consideration for services
provided  to  the  Company  in connection with the reverse merger.  Also on that
date  the  Company  issued  4,790,000  shares  to employees in consideration for
services  provided  to  the  Company.

On  March 11, 2004 the Company cancelled 459,375, pre-reverse split shares which
were  returned  to the Company in satisfaction of a shareholder receivable.  The
shares  were  valued  at  $372,500.

On  April  19,  2004 the Company entered into a stock subscription agreement for
the  sale  of  175,000,  pre-reverse  shares  for  $350,000.

On  June  29,  2004,  the Company secured a $2,500,000 financing commitment from
five  unrelated  entities  for the purchase of convertible promissory notes, and
the  issuance of Class A Warrants and Class B Warrants to purchase shares of the
Company's  common  stock.  The  Company  received $1,250,000 for the purchase of
convertible  promissory  notes.  The  notes  will convert into 500,000 shares of
common  stock,  at  the  rate  of $2.00 per share.  The Class A Warrants are for
250,000  shares  of  common  stock  at  $9.60  per  share.  The Warrants must be
exercised  within  four  years.  The  Class B Warrants are for 500,000 shares of
common  stock,  at  the  rate  of  $5.00  per  share.

                                     F-6
<PAGE>

The  Class  B  warrants  expired unexercised on September 3, 2005.  The Warrants
issued  were  valued  at  $121,000.

On  July  2, 2004, the Company issued 100,000 pre-reverse split shares of common
stock  for one year of filing services.  The shares were valued by the Company's
Board  of  Directors  at  $2,000.

On  August  2, 2004, the Company entered into an asset purchase agreement with a
floral  and  event  d'cor  company.  The  Company  purchased  all the assets and
assumed  certain  liabilities of the entity for 800,000 pre-reverse split shares
of  the  Company's  common  stock.

                          Assets Acquired
          Cash                                    $  8,152
          Accounts  receivable                      18,050
          Inventories                               45,930
          Furniture                                  1,500
          Goodwill                                 349,120
                                                  --------
                    Total                         $422,752
                                                  ========

                           Liabilities Assumed
          Accounts  payable                       $ 67,132
          Accrued  payroll                          11,205
          Withheld  and  accrued  taxes              3,015
          Line  of  credit                           5,400
                                                  --------
                    Total                         $ 86,752
                                                  ========

On  August 9, 2004 the Company issued 125,000 pre-reverse split shares of common
stock  as  a  finder's  fee for the convertible debt issued earlier in the year.
The  shares were valued by the Company's Board of Directors at $2,500.  Also, on
August  9,  2004,  the  Company issued 70,000 pre-reverse split shares of common
stock  for investor relations.  The shares were valued by the Company's Board of
Directors  at  $1,400.

     On  August  13, 2004, the Company issued 5,900,000 pre-reverse split shares
of  common  stock  as  employment  bonuses  to  two key officers. The employment
agreements  is  for 36 months and the stock has forfeit rights if the employment

                                     F-7
<PAGE>

should  terminate  before  the  end of the period. The shares were valued by the
Company's  Board  of  Directors at $118,000. This amount is being amortized on a
straight  line  basis  over  the  36  month  life  of the employment agreements.
Amortization  expense  in  2005  and  2004  for  these employment agreements was
$37,148  and  $16,385  respectively.

On  September  15, 2004, the Company converted $267,500 of Convertible debt into
1,076,693  pre-reverse  split  shares  of  the  Company's  common  stock.

On  November  1,  2004,  the Company converted $200,000 of Convertible debt into
811,533  pre-split  shares  of  the  Company's  common  stock.

On  December  8,  2004,  the  Company issued 542,235 pre-reverse split shares of
common  stock  to  employees in satisfaction of certain provisions of employment
agreements.  The  shares  were  valued  at  $10,845.

On  December  3,  2004,  the Board of Directors of the Company, with shareholder
approval,  authorized  a  1:20  reverse  split  of the outstanding shares of the
Company's  common  stock.  Unless otherwise stated the shares in these financial
statements  have  been adjusted to reflect this reverse split as if it had taken
place  at  the  beginning  of  the  year.

On  December  3,  2004,  the shareholders of the Company authorized changing the
Company's  name  to  XA,  Inc.

On  December  29,  2004, the Board of Directors of the Company, with shareholder
approval  authorized the issue of 3 shares of Series A Preferred Stock.  Also on
December  29, 2004, the Company entered into an asset purchase agreement with an
event  d'cor  company.  The Company purchased certain assets and assumed certain
liabilities  of  the  entity  for  150,000 shares of the Company's common stock.

                        Assets Acquired
          Equipment                             $  6,961
          Leasehold  Improvements                 20,186
          Goodwill  and  other  intangibles      310,353
                                                --------
                    Total                       $337,500
                                                ========

                        Liabilities Assumed
          None                                  $   -0-

                                     F-8
<PAGE>

On May 26, 2005, the Company issued 52,500 shares of common stock for services.
The shares were valued at $18,428.

On September 15, 2005, the Company issued 115,000 shares of common stock for
services.  The shares were valued at $14,950.

On November 9, 2005, the Company issued 10,000 shares of common stock for
services.  The shares were valued at $2,700.

On December 31, 2005, the Company issued 25,000 shares of common stock for
services.  The shares were valued at $6,750.

The  consolidated financial statements include the accounts of XA, Inc and Fiori
XA,  Inc.  All  significant  inter-company  accounts  and transactions have been
eliminated  in  consolidation.

The  Company is a comprehensive event marketing, design and production firm with
full  service  offices  in  Chicago,  New  York  and  Los  Angeles.

CASH  AND  CASH  EQUIVALENTS
----------------------------

For  purposes  of  the  statement  of  cash  flows,  the  Company  considers all
short-term  debt  securities  three  months  or  less  to  be  cash equivalents.

Cash  paid  during  the  years  for:

                                                2005                2004
                                                ----                ----
     Interest                                   $-0-               $19,391
     Income  taxes                              $-0-               $   -0-

PROPERTY  AND  EQUIPMENT
------------------------

Property  and  equipment are carried at cost.  Maintenance, repairs and renewals
are  expensed  as  incurred.  Depreciation of property and equipment is provided
for  on  the straight line and 200% declining balance basis over their estimated
useful  lives  as  follows:

                                     F-9
<PAGE>

     Equipment                         5  years
     Furniture  and  fixtures          7  years
     Leaseholds                       39  years

Depreciation expense for the years ended December 31, 2005 and 2004 was $27,580
and $6,403 respectively.

INCOME  TAXES
-------------

Before December 4, 2003 the date of the share exchange with Synreal, the Company
had  elected  to  be taxed under the provisions of Sub-chapter S of the Internal
Revenue Code.  Under these provisions, the Company does not pay federal or state
corporation  taxes  on its taxable income.  Instead, the shareholders are liable
for  individual  federal and state income taxes on the Company's taxable income.
There are no differences in accounting for tax and book.  After December 4, 2003
the  Company  is taxed as a Sub-chapter C corporation under the Internal Revenue
Code.

The  estimated  tax  provision  at  December  31,  2005 and 2004 consists of the
following:

     Estimated  Recoverable         2005                 2004
                                    ----                 ----

     Federal                      $ 10,000             $420,000
     State                           5,000              105,000
                                  --------             --------
                                  $ 15,000             $525,000
                                  ========             ========

The  Company  has net loss carryforwards of approximately $1,419,000 that expire
in  2020  for  federal  taxes  and  2017  for  state  taxes.

USE  OF  ESTIMATES
------------------

The  preparation  of  consolidated  financial  statements  in  conformity  with
generally  accepted  accounting principles requires management to make estimates
and  assumptions  that  affect  certain  reported  amounts  and  disclosures.
Accordingly,  actual  results  could  differ  from  those  estimates.

                                      F-10
<PAGE>

CONCENTRATION  OF  CREDIT  RISKS
--------------------------------

During 2005 and 2004 and at December 31, 2005 and 2004, the Company had deposits
in  banks  in  excess  of  the  FDIC  insurance  limit.

NOTE  2  -  DISCOUNT  ON  CONVERTIBLE  NOTES  PAYABLE
-----------------------------------------------------

Discount  on  Convertible Notes Payable represents costs the Company incurred in
connection with the convertible promissory notes.  These costs will be amortized
over  the  life  of  the  notes  (24  months)  on  a  straight-line  basis.  The
amortization  expense  for  these costs were $133,228 and $117,914 for the years
2005  and  2004  respectively.

NOTE  3  -  NOTES  PAYABLE
--------------------------

On  August  12, 2004, the Company entered into a Line of Credit agreement with a
bank  for  $750,000.  The  note  is  due September 30, 2006.  Interest varies at
0.25%  over  the  Bank's prime rate.  The Company's assets secure the note.  The
draws  are  based  on  a  borrowing  base  formula  at  75% of eligible accounts
receivable  less  90 days past due accounts.  The agreement required the payment
of  a  $5,000  commitment  fee.  The balance outstanding under this agreement at
December  31,  2005  and  2004  was  $0.

On  June  29,  2004,  the  Company  entered  into  a Convertible Promissory Note
agreement  with  5  unrelated entities.  The terms of the 5 notes are identical.
The  interest  rate  is 6%.  The notes are convertible into the Company's common
stock  at  a conversion rate of $2.00 per share.  Conversion is at the Company's
option.  However,  if  the  Company  requests  conversion  it  must convert with
registered  stock.  The  holder also received Class A and Class B Warrants (Note
4)  and  purchased  an  additional $1,250,000 of convertible promissory notes on
September  13,  2004.

On September 13, 2004, note holders with $267,500 due converted these notes into
1,076,693  pre-reverse  split shares of the Company's common stock in accordance
with  the  note  agreement.  On November 1, 2004, note holders with $200,000 due
converted  these  notes  into  811,533 pre-reverse split shares of the Company's
common  stock  in  accordance  with  the  note  agreement.   The  balance due at
December  31,  2005  and  2004  was  $2,032,500  and  $2,032.500  respectively.

                                      F-11
<PAGE>

                             XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2005

NOTE 3 - NOTES PAYABLE - CONTINUED
----------------------------------

Total  Long-Term  debt  at  December  31,  is  as  follows:

                                      2005                   2004
                                      ----                   ----
     Long-term  debt               $2,032,500            $2,032,500
     Less  Current  portion       ($2,032,500)                  -0-
                                  -------------          ----------
     Long-term  debt              $         -0-          $2,032,500
                                  =============          ==========



Maturities  on  long-term  debt  at  December  31,  2005  are  as  follows:

     Year  ending  December  31,  2006             $2,032,500


NOTE  4  -  EQUITY
------------------

PREFERRED  STOCK
----------------

On  December 27, 2004, the Board of Directors, with shareholder approval, issued
3  shares,  of  the  authorized 10,000,000 shares of "blank check" preferred, as
Series  A  Preferred  Shares.  The Series A Preferred Shares have a par value of
$.001  per  share,  have  no  rights to dividends, no liquidation preference, no
conversion  rights  and  no redemption rights.  The holders thereof, voting as a
class,  shall  have  the  right  to  vote  on  all  shareholder matters equal to
fifty-one  percent  of  the  total  vote.  There  were  3  shares outstanding at
December  31,  2005.

COMMON  STOCK
-------------

On  December  3,  2004  the  shareholders  of  the  Company  increased the total
authorized  shares  of common stock to 200,000,000 with a par value of $.001 per
share;  however, following a 1:20 reverse stock split affected on the same date,
the  Company had 10,000,000 shares of common stock authorized and 500,000 shares
of  preferred  stock  authorized.

On  December  19,  2005,  the  Company  affected an amendment to its Articles of
Incorporation which increased the authorized shares of the Company to 20,000,000
shares  of  common  stock,  re-authorized  the  par  value  of $0.001 per share,
re-authorized 500,000 shares of preferred stock, and re-authorized the par value
of  $0.001 per share of preferred stock. The Company had 3,718,750 and 3,516,250
shares  outstanding  at  December  31,  2005  and  2004  respectively.

                                      F-12
<PAGE>

NOTE  4  -  EQUITY-  CONTINUED
------------------------------

TREASURY  STOCK
---------------

On  March  11,  2004 the majority shareholder of the Company surrendered 465,625
shares  of common stock in satisfaction of $372,500 of the officer's receivable.

STOCK  WARRANTS
---------------

On June 29, 2004, the holders of the Convertible Promissory Notes received Class
A  Warrants  and  Class  B  Warrants.

Class A Warrants are to purchase 250,000 shares of the Company's common stock at
an exercise price of $9.60 per share.  The warrants may be exercised at any time
before  June  29,  2008.

Class  B  Warrants were to purchase 500,000 shares of the Company's common stock
at  an  exercise  price  of  $5.00  per  share,  however  those Warrants expired
unexercised  on  September  3,  2005.

NOTE  6  -  COMMITMENTS
-----------------------

On  February  1, 2001, the Company entered into a seven-year lease agreement for
office  space  in Chicago.  The lease terminates March 31, 2008.  Lease payments
are  on  a  sliding  scale  as  follows:

          Period                   Monthly  Rent
          Year  1                    $11,032
          Year  2                    $11,319
          Year  3                    $11,614
          Year  4                    $11,918
          Years 5  &  6              $12,231
          Year  7                    $12,886

The lease is secured by an irrevocable line of credit for $64,381, which expires
March  31,  2004.  The  lease  was  terminated  by  the Company in July of 2004.

On  August  20,  2003,  the Company entered into a five-year lease agreement for
shared  office  space  in  New  York.  The lease terminates August 1, 2008.  The
lease  calls  for  monthly  payments  of  $1,250  per  month.

                                      F-13
<PAGE>

NOTE  6  -  COMMITMENTS  -  CONTINUED
-------------------------------------

On  March  31,  2003, the Company entered into an equipment lease with a finance
company.  The  lease  is  for  36  months  with  monthly  payments  of  $145.

On  April  1,  2003,  the Company entered into an equipment lease with a finance
company.  The  lease  is  for  60  months  with  monthly  payments  of  $1,383.

On  September  18,  2003,  the  Company  entered  into an equipment lease with a
finance  company.  The  lease  is  for  36 months with monthly payments of $117.

On  October  1, 2003, the Company entered into an equipment lease with a finance
company.  The  lease  is  for  36  months  with  monthly  payments  of  $83.

On  November  20,  2001, the Company entered into a vehicle lease with a finance
company.  The  lease  is  for  39  months  with  monthly  payments  of  $1,099.

On  May  30,  2002,  the  Company  entered  into  a vehicle lease with a finance
company.  The  lease  is  for  36  months  with  monthly  payments  of  $2,483.

On  January 1, 2004, the Company entered into a sublease agreement for a portion
of its space in Chicago.  The sublease lasts for one year with monthly income of
$1,250  a  month.

On  January  14,  2004,  the Company entered into a vehicle lease with a finance
company.  The  lease  is  for  24  months  with  monthly  payments  of  $1,965.

On January 15, 2004, the Company entered into a four year and seven month shared
office  space agreement in Los Angeles.  The lease begins May 1, 2004 and has an
option for one 60-month extension.  The Company's portion of the monthly rent is
$1,820  per  month.

On  February  10,  2004, the Company entered into a vehicle lease with a finance
company.  The  lease  is  for  36  months  with  a  monthly  payment  of $1,956.

On February 17, 2004, the Company entered into an equipment lease with a finance
company.  The  lease  is  for  60  months  with  monthly  payments  of  $239.

                                      F-14
<PAGE>

NOTE  6  -  COMMITMENTS  -  CONTINUED
-------------------------------------

On  June  14,  2004,  the Company entered into an equipment lease with a finance
company.  The  lease  is  for  60  months  with  monthly  payments  of  $389.

On  June  30, 2004 the Company entered into an eight-year lease for office space
in  Chicago.  The  lease  terminates  June  30,  2012.  Lease  payments are on a
sliding  scale  as  follows:

                  Period        Monthly  Rent       Period        Monthly  Rent
                  Year  1             $ 9,590        Year 5             $11,508
                  Year  2             $10,069        Year 6             $11,987
                  Year  3             $10,549        Year 7             $12,466
                  Year  4             $11,028        Year 8             $12,946

On  June  30, 2004, the Company entered into a five-year lease for retail/office
space  in Chicago.  The lease terminates August 31, 2008.  Lease payments are on
a  sliding  scale  as  follows:

                  Period        Monthly  Rent
                  Year  1              $5,250
                  Year  2              $5,408
                  Year  3              $5,570
                  Year  4              $5,736
                  Year  5              $5,909

On  August  1,  2004, the Company entered into an equipment lease with a finance
company.  The  lease  is  for  60  months  with  monthly  payments  of  $613.

On  December  23,  2005,  the  Company entered into a ten-year lease for office,
event and production space in New York City.  The lease payments are $21,667 per
month  and  increase  3%  per  year  each  year  after  the  first  year.

Future  minimum  payments  due  under  these  lease  agreements  are as follows:

                 2006                 $540,151
                 2007                 $533,175
                 2008                 $491,130
                 2009                 $483,253
                 2010                 $491,776

                                      F-15
<PAGE>

NOTE  7  -  EMPLOYMENT  AGREEMENTS
----------------------------------

On August 1, 2004, the Company entered into employment agreements with its Chief
Executive Officer, its Chief Operating Officer, President and Secretary, and its
Vice  President  of  Operations  and Treasurer.  The agreements cover a 36 month
period,  define  annual  compensation,  paid  days  off, and severance pay.  The
agreements  also  require  the  Company  to maintain $1,000,000 of Directors and
Officers  Liability insurance.  In the case of two of the agreements it provides
as additional consideration 295,000 shares of the Company's common stock.  These
shares  are  subject  to  the  risk  of  forfeiture.

NOTE  8  -  SERVICE  AGREEMENTS
-------------------------------

On  May  11, 2005, the Company entered into a service agreement with its General
Counsel  to provide services through December 31, 2005.  The agreement calls for
payments  of  $8,250  per  month and the issue of 75,000 shares of common stock.
The  shares  are  to  vest as follows; 35,000 shares on April 30, 2005, with the
balance  vesting  at  the  rate  of  5,000 shares each month, at the end of each
month,  throughout  2005.

On  May 11, 2005, the Company entered into a service agreement with a company to
provide  electronic  filing  services  with  the  United  States  Securities and
Exchange  Commission  through  May 31, 2006.  The agreement calls for payment by
the  issue  of  40,000  shares  of common stock.  The shares vest at the rate of
17,060  on  April 30, 2005, with the balance vesting at the rate of 3,077 shares
per  month  through  the  end  of  the  agreement.

                                      F-16
<PAGE>

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

  None.

ITEM 8A. CONTROLS AND PROCEDURES

          (a)  Evaluation  of  disclosure  controls  and  procedures.  Our Chief
     Executive  Officer  and  Principal  Financial Officer, after evaluating the
     effectiveness  of  our  "disclosure controls and procedures" (as defined in
     the  Securities  Exchange  Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of
     the  end  of  the  period covered by this Annual Report on Form 10-KSB (the
     "Evaluation  Date"),  have  concluded  that  as of the Evaluation Date, our
     disclosure  controls  and  procedures  are  effective to provide reasonable
     assurance  that  information we are required to disclose in reports that we
     file  or  submit  under the Exchange Act is recorded, processed, summarized
     and  reported  within  the  time  periods  specified  in the Securities and
     Exchange  Commission  rules  and  forms,  and  that  such  information  is
     accumulated  and  communicated  to  our  management,  including  our  Chief
     Executive  Officer  and  Chief Accounting Officer, as appropriate, to allow
     timely  decisions  regarding  required  disclosure.

          (b)  Changes  in internal control over financial reporting. There were
     no  significant  changes  in  the Company's internal control over financial
     reporting  during the fourth fiscal quarter that materially affected, or is
     reasonably likely to materially affect, the Company's internal control over
     financial  reporting.

ITEM 8B. OTHER INFORMATION.

     On  February  17,  2005,  the  Company's  Board  of  Directors accepted the
resignation  of  Frank Goldstin as the Company's Chief Executive Officer. At the
same  time, the Board of Directors accepted Joseph Wagner's resignation as Chief
Operating  Officer  of  the Company and appointed Mr. Wagner the Company's Chief
Executive  Officer  to  fill the vacancy left by Mr. Goldstin and appointed Jean
Wilson  as the Company's Chief Operating Officer to fill the vacancy left by Mr.
Wagner.

     On  December 19, 2005, Frank Goldstin failed to be re-elected as a Director
of  the  Company  at  the  Company's annual meeting of shareholders. Also at the
annual  meeting of shareholders, Christopher Spencer was elected by our majority
shareholders  to  serve  as  a  Director  of  the  Company.

     Additionally,  in December 2005, we entered into a Severance Agreement with
Frank  Goldstin,  which  is  explained in greater detail under "ITEM 12. CERTAIN
RELATIONSHIPS  AND  RELATED  TRANSACTIONS,"  below.



                                    PART III

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

DIRECTORS  AND  OFFICERS

The  Directors  and  Officers  of  the  Company  are  as  follows:

Name                 Age   Position                                Since
----                 ---   --------                                -----
Joseph  Wagner       40    President,  Chief Executive Officer,     August  2004
                           Secretary  and  Director

Jean  Wilson         45    Chief Operating Officer,                 August  2004
                           Chief Accounting Officer,
                           Treasurer  and  Director

                                       28
<PAGE>

Christopher Spencer 37     Director                                December 2005

JOSEPH  WAGNER

     Joseph  Wagner  was  appointed  Chief  Executive  Officer of the Company on
February  17,  2005.  Mr.  Wagner  has  served  as  a  consultant to the Company
performing  the  functions  of  President and Secretary and as a Director of the
Company  since August 2004. Mr. Wagner has worked for the Company since February
2003.  Mr.  Wagner may engage in business activities or interests outside of the
Company  which  are  not  adverse  or  competitive  to  the  Company. Mr. Wagner
concurrently  serves  as  President of LSC Capital Advisers ("LSC Capital"). Mr.
Wagner  has  worked  for  LSC  Capital since October 1997. From March of 2000 to
October 2004, Mr. Wagner served as Managing Director of LSC Associates, LLC. Mr.
Wagner  has  advised  public  and  private  companies  in the areas of strategic
planning,  international  project  development,  international  finance, project
management,  logistics,  and  business  development. Mr. Wagner has served as an
officer  and/or  director  of emerging growth companies and has been responsible
for  operational  oversight  in the areas of mergers and acquisitions, corporate
governance,  business  development, strategic financial planning and SEC audits.
Mr.  Wagner  earned  a Bachelor of Arts in Law & Society from Purdue University,
highest  distinction,  Phi  Beta  Kappa;  and  he  earned  a Master of Arts from
Northern  Illinois  University.

     Mr.  Wagner  resigned  as  the  Company's  Chief  Operating Officer and was
appointed  as  the  Company's  Chief  Executive  Officer  on  February 17, 2005.

JEAN WILSON

     Jean  Wilson  was  appointed  Chief  Operating  Officer  of  the Company on
February  17,  2005.  Ms.  Wilson  has  served as the Company's Treasurer, Chief
Accounting  Officer  and  as  a  Director  of the Company since August 2004. Ms.
Wilson  has  worked  for XA since July 2002. From January 1999 to July 2002, Ms.
Wilson  held  a management position with ESM Association. From September 1982 to
January  1999,  Ms.  Wilson worked in operations for The Meetinghouse Companies.
Ms.  Wilson  brings  more than twenty years of full time experience in event and
meeting  planning  to  the  Company.  During  her  career,  Ms.  Wilson has been
responsible  for  every  facet  of producing, selling and coordinating corporate
special  events, trade shows, conventions and seasonal decorating programs for a
host  of  clients.  Ms.  Wilson  earned  a  Bachelors  degree  with  honors  in
Recreation/Leisure  Studies  from  Eastern  Illinois  University.

     Ms.  Wilson  resigned as the Company's Vice President of Operations and was
appointed  as  the  Company's  Chief  Operating  Officer  on  February 17, 2005.

CHRISTOPHER SPENCER

     Christopher  Spencer has served as a Director of the Company since December
2005. Mr. Spencer entered into a one year renewable Consulting Agreement with us
on  December  19,  2005, to serve as our Director, which Consulting Agreement is
described  in  greater detail below under "Employment and Consulting Agreement."
Since approximately February 1996, Mr. Spencer has served as the Chief Executive
Officer,  President,  Treasurer  and  as  a Director of Wizzard Software Corp. a
company  which  is  publicly  traded  on the OTC Bulletin Board under the symbol

                                       29
<PAGE>

[WIZD]  and  which specializes in speech recognition software and text-to-speech
technology.  From  approximately  May  1994  to approximately February 1996, Mr.
Spencer  served as the Chief Executive Officer of Chinawire, Inc. which provided
money  transfer  services  between  high  population Chinese areas in the United
States  and  mainland China. From approximately July 1992 to approximately April
1994,  he served as Chief Executive Officer of Lotto USA, which provided lottery
ticket  brokerage  services  that  allowed  persons  in  one state to purchase a
different  state's  lottery  tickets  through Lotto USA. Mr. Spencer has his IBM
certification  in  speech  recognition.

     All Directors of the Company will hold office until the next annual meeting
of the shareholders, and until their successors have been elected and qualified.
Officers of the Company are elected by the Board of Directors and hold office at
the  pleasure  of  the  Board.

                      EMPLOYMENT AND CONSULTING AGREEMENTS

JOSEPH WAGNER

     Joseph  Wagner, a director of the Company and the Company's Chief Executive
Officer,  President  and  Secretary pursuant to a consulting agreement effective
August  1,  2004,  for  a  period  of  thirty-six  (36)  months. Pursuant to the
consulting  agreement,  Mr.  Wagner  will  devote  such  time as the Company may
reasonably  deem  to  be necessary and beneficial to the efficient and effective
operation  of  the  Company's  business.  Mr.  Wagner  may  engage  in  business
activities  or  interests  outside  of  the  Company  which  are  not adverse or
competitive  to  the  Company.  Mr.  Wagner  will  receive  $200,000 per year as
compensation  as  well  as  thirty  (30) days of PTO. In August 2004, Mr. Wagner
received  as additional consideration 225,000 restricted shares of Common Stock.
All  225,000  restricted shares were originally subject to a risk of forfeiture;
however,  on  December  31,  2004,  75,000 of the restricted shares became fully
vested  and  on  December  31, 2005, an additional 75,000 shares of common stock
became  fully  vested.  In  the  event  that  Mr.  Wagner's consulting agreement
terminates  other  than  pursuant  to  his disability, death or by us for cause,
before December 31, 2006, he must return to the Company 75,000 restricted shares
of  Common  Stock. Mr. Wagner also received "piggy-back" registration rights and
the  right  to  certain  equitable  adjustments  with  respect  to  all  225,000
restricted  shares  of  Common  Stock.  The  Company  is obligated to maintain a
director  and officer insurance policy of at least $1,000,000 during the term of
Mr.  Wagner's  consulting  agreement.  The  Company may terminate the consulting
agreement; however, in the event of termination for good reason by Mr. Wagner or
without cause, the Company is obligated to pay Mr. Wagner a severance payment of
$150,000 in addition to all payments of salary earned by Mr. Wagner through such
date  of  termination  in  one lump sum payment. In the event of termination for
good  reason  by Mr. Wagner, without cause, or by mutual agreement of Mr. Wagner
and  the  Company,  the  remaining 150,000 restricted shares that have not fully
vested  will  cease  to  be  subject  to  the  risk  of  forfeiture.

     On  February 17, 2005, Mr. Wagner resigned as the Company's Chief Operating
Officer  and  was  appointed  as  the  Company's  Chief Executive Officer by the
Company's  Board  of  Directors.

                                       30
<PAGE>

JEAN WILSON

     Jean Wilson serves as the Company's Chief Operating Officer, Treasurer, and
as  a  director of the Company pursuant to an employment agreement, which became
effective August 1, 2004, and which is effective for a period of thirty-six (36)
months.  Ms.  Wilson  will  receive  $105,000  as  compensation  during 2004 and
$125,000  beginning January 1, 2005, which compensation was increased further to
$150,000  per  year on July 1, 2005. Ms. Wilson will receive thirty (30) days of
PTO.  In  August  2004,  Ms.  Wilson received as additional consideration 70,000
restricted  shares of Common Stock. All 70,000 restricted shares were originally
subject  to  a  risk of forfeiture; however, on December 31, 2004, 25,000 of the
restricted  shares  became  fully vested and on December 31, 2005, an additional
22,500  shares  became  fully  vested. In the event that Ms. Wilson's employment
terminates  before December 31, 2006, due to her disability, death or with cause
by  the  Company,  she  must  return  to the Company 22,500 restricted shares of
Common  Stock. Ms. Wilson also received "piggy-back" registration rights and the
right  to  certain  equitable  adjustments with respect to all 70,000 restricted
shares  of  Common  Stock.  The  Company is obligated to maintain a director and
officer policy of at least $1,000,000 during the term of Ms. Wilson's employment
agreement.  The  Company may terminate the employment agreement; however, in the
event of termination for good reason by Ms. Wilson or without cause, the Company
is  obligated  to  pay Ms. Wilson a severance payment of $150,000 in addition to
all  payments of salary earned by Ms. Wilson through such date of termination in
one  lump sum payment. In the event of termination for good reason by Ms. Wilson
or  without  cause,  the  remaining 45,000 restricted shares that have not fully
vested  will  cease  to  be  subject  to  the  risk  of  forfeiture.

     On  February  17, 2005, Ms. Wilson resigned as Vice President of Operations
and  was appointed Chief Operating Officer of the Company by the Company's Board
of  Directors.

CHRISTOPHER SPENCER

     Christopher Spencer entered into a one year, renewable consulting agreement
with  us to serve as our Director on December 19, 2005. The consulting agreement
is  for  a period of twelve (12) months and is renewable for successive one-year
terms  upon  the  mutual  acceptance of both parties. Pursuant to the consulting
agreement,  Mr.  Spencer  is  to  be  paid  $2,000  per  month and to receive an
aggregate  of 100,000 restricted shares of our Common Stock while employed under
the consulting agreement, of which 25,000 shares have been issued as of the date
of  this filing, with the remaining 75,000 shares to be issued to Mr. Spencer as
follows,  25,000  shares  on  March 31, 2006, 25,000 shares on June 30, 2006 and
25,000  shares  on  September  30,  2006. The Company is obligated to maintain a
director  and  officer  policy  of  at  least  $1,000,000 during the term of Mr.
Spencer's  consulting  agreement.  The consulting agreement is terminated by Mr.
Spencer's  disability  or  his  death.  Mr. Spencer can terminate the consulting
agreement for good reason and the Company can terminate the consulting agreement
with  cause (as described in the consulting agreement attached hereto as Exhibit
10.15).  Additionally,  Mr. Spencer's consulting agreement is termination if the
Company's voting shareholders vote to remove him as a Director or if he fails to
be  re-elected  upon  the  termination of his current term as Director. Also the
consulting  agreement  may be terminated by the mutual agreement of the parties.
Upon  Mr.  Spencer's  termination for any reason, he is entitled to receive only
the compensation earned by him (including shares of stock) up to the date of the
termination.

                                       31
<PAGE>

SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section  16(a)  of the securities Exchange Act of 1934, as amended, requires the
Company's  directors,  executive officers and persons who own more than 10% of a
class of the Company's equity securities which are registered under the Exchange
Act  to  file  with  the  Securities  and Exchange Commission initial reports of
ownership  and  reports  of  changes of ownership of such registered securities.
Such  executive  officers,  directors and greater than 10% beneficial owners are
required  by  Commission  regulation  to  furnish the Company with copies of all
Section  16(a)  forms  filed  by  such  reporting  persons.

To  the  Company's  knowledge,  based  solely  on a review of the copies of such
reports  furnished  to  the Company and on representations that no other reports
were  required,  no  person required to file such a report failed to file during
fiscal  2004.  Based on stockholder filings with the SEC, Frank Goldstin, Joseph
Wagner,  Jean  Wilson,  Christopher Spencer and Alpha Capital Aktiengesellschaft
are  subject  to  Section  16(a)  filing  requirements.

CODE OF ETHICS

The  Board  of  Directors adopted a Code of Ethics in February 2004, meeting the
requirements  of Section 406 of the Sarbanes-Oxley Act of 2002. The Company will
provide  to  any  person  without  charge,  upon request, a copy of such Code of
Ethics.  Persons  wishing  to  make such a request should contact Joseph Wagner,
President,  875  North  Michigan  Avenue,  Suite  2626, Chicago, Illinois 60611,
telephone:  (312)  397-9100.

AUDIT COMMITTEE

As  of  the date of this filing, the Company has no Audit Committee in place nor
any  immediate plans to form one. However, if or when the Company is required to
maintain  an  Audit  Committee  pursuant  to the Sarbanes-Oxley act of 2002, the
Company  plans  to  comply  with  such  requirement.

ITEM  10.  EXECUTIVE  COMPENSATION

<TABLE>
<CAPTION>

                                               SUMMARY COMPENSATION TABLE
                                                  ANNUAL COMPENSATION*

                                                                Other                      All Other
                                                                Annual                       Annual
Name & Principal Payouts                              Bonus     Comp-      Restricted       Compen-
    Position               Year       Salary ($)       ($)     sation     Stock Awards       sation
------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>           <C>       <C>          <C>             <C>

Frank  Goldstin(1)         2005      $  189,246                $50,000(1)
Former CEO                 2004      $  360,000
                           2003      $  200,000
                           2002      $   40,000

Joseph Wagner (2)          2005      $  203,666(3)                           75,000(2)
CEO,  President,           2004      $  200,000                              75,000(2)
Secretary,  and  Director

Jean Wilson (4)            2005      $  143,699(5)                           22,500(4)
Chief Operating Officer,   2004      $  105,000                              25,000(4)
Treasurer,  and  Director

</TABLE>

                                       32
<PAGE>

*  Does not include perquisites and other personal benefits in amounts less than
10%  of  the  total  annual  salary and other compensation. No Executive Officer
received  any  Options,  SARS,  or  LTIP Payouts in the last three fiscal years.

(1)  Frank  Goldstin served as our Chief Executive Officer from December 2003 to
February  17,  2005, when Mr. Wagner was elected as our Chief Executive Officer.
Effective  August  1,  2004,  Mr.  Goldstin entered into a thirty-six (36) month
employment  agreement  with  the  Company  effective August 1, 2004, pursuant to
which  Mr. Goldstin would have received compensation of $360,000 per year. On or
about  February  17,  2005,  Mr.  Goldstin entered into a Twenty-Four (24) month
employment agreement with the Company which superseded the previous agreement he
had  with  the  Company,  and which would have paid him $100,000 per year as the
Chairman  of  the  Company's  Board  of  Directors.  Mr.  Goldstin's  employment
agreement  was  terminated  effective December 19, 2005, due to the fact that he
was  not elected a Director of the Company at our annual meeting of shareholders
on  the  same  day.  In  connection  with  the  termination  of  Mr.  Goldstin's
employment,  and  pursuant  to  a "Severance Agreement and Release in Full" (the
"Severance  Agreement"),  he  was  provided  a lump sum payment in the amount of
$50,000,  less  applicable  tax  withholding,  and  a payment of $5,538.43, less
applicable  tax  withholding,  in connection with amounts previously owed to Mr.
Goldstin  in  connection with his employment (collectively the "Severance Pay").

Pursuant  to the Severance Agreement, Mr. Goldstin agreed to release and forever
discharge  us,  our  former,  present and future officers, directors, employees,
agents,  administrators,  persons  and  corporations  who  may be liable for the
conduct  of  any  of  the  aforesaid  parties,  from any and all debts, demands,
promises,  actions,  claims,  liabilities,  damages, and causes of action of any
nature, known or unknown, both in law and equity, which have accrued or may ever
accrue  to  Mr. Goldstin, his heirs, executors, legal administrator, successors,
or  assigns by reason of his employment with us. Mr. Goldstin's release included
all  claims whether arising in tort, contract or statute. Additionally, pursuant
to the Severance Agreement, Mr. Goldstin agreed to repay us the Severance Pay if
he  violates  the  Severance  Agreement  in  any  material  respect.

(2)  Joseph  Wagner,  serves has served as our President Secretary and Treasurer
since  August  1, 2004, and served as our Chief Operating Officer from August 1,
2004  until  February  17,  2005,  at  which time he resigned as Chief Operating
Officer and was appointed Chief Executive Officer entered into a thirty-six (36)
month  consulting  agreement with the Company effective August 1, 2004, pursuant
to  which  Mr.  Wagner will receive compensation of $200,000 per year. In August
2004,  Mr.  Wagner  also received as additional consideration 225,000 restricted
shares  of  the  Company's  Common  Stock  subject  to  a risk of forfeiture. On
December  31,  2004,  75,000 shares became fully vested and on December 31, 2005
and  additional  75,000  shares  became  fully  vested.  The  risk of forfeiture
covering  the  remaining 75,000 shares will cease to exist on December 31, 2006,
if  Mr.  Wagner's employment with us is not terminated prior to that date due to
his  disability,  death  or  by  us for cause. Mr. Wagner may engage in business
activities  or  interests  outside  of  the  Company  which  are  not adverse or
competitive  to  the  Company.

(3)  This  amount  includes a $1,000 monthly car allowance which was paid to Mr.
Wagner  in  connection  with  his  use of a car for Company and non-Company use.

(4)  Jean  Wilson has served as our Chief Accounting Officer and Treasurer since
August 1, 2004. Between August 1, 2004 and February 17, 2005, Mrs. Wilson served
as  our  Vice  President  of  operations and on February 17, 2005, was appointed
Chief  Operating  Officer.  Mrs.  Wilson  entered  into  a thirty-six (36) month
employment  agreement  with  the  Company  effective August 1, 2004, pursuant to
which  Ms.  Wilson  will  receive compensation of $105,000 per year beginning on
August 1, 2004, and $125,000 per year beginning January 1, 2005. In August 2004,
Ms. Wilson also received as additional consideration 70,000 restricted shares of
the  Company's  Common  Stock  subject  to a risk of forfeiture. On December 31,
2004,  25,000 shares became fully vested and on December 31, 2005, 22,500 shares

                                       33
<PAGE>

became fully vested. The risk of forfeiture covering the remaining 22,500 shares
will cease to exist on December 31, 2006, if Mrs. Wilson's employment with us is
not  terminated  prior  to  that  date due to her disability, death or by us for
cause.

(5)  This  amount  includes  a  $500 monthly car allowance which was paid to Ms.
Wilson  in  connection  with  her  use of a car for Company and non-Company use.

Additionally,  we  had  four  (4)  other employees who made between $100,000 and
$129,999  per  year  for  the  year  ended  December 31, 2005, and two (2) other
employees  who  made more than $150,000 per year for the year ended December 31,
2005.  While  these  individuals perform various tasks for us, we do not believe
these  individuals  perform  any functions as Executive Officers of the Company.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED  STOCKHOLDER  MATTERS

     The  following  table  sets  forth  information  as  of  March 23, 2006,
with  respect  to  the  beneficial  ownership  of  the  Common Stock by (i) each
director  and  officer  of  the  Company,  (ii)  all directors and officers as a
group  and  (iii)  each  person  known  by the Company to own beneficially 5% or
more  of  the  Common  Stock:

                                 Shares beneficially
Name and Address                       owned (1)                 Percent (2)

Joe Wagner (3)                         2,231,242(4)(5)             29.1%(6)
875 North Michigan Avenue
Suite 2626
Chicago, Illinois 60611

Jean Wilson (7)                        1,942,041(4)(8)             25.4%(6)
875 North Michigan Avenue
Suite 2626
Chicago, Illinois 60611

Christopher Spencer (9)                   50,000(10)               1.3%(11)
875 North Michigan Avenue
Suite 2626
Chicago, Illinois 60611

Frank Goldstin (12)                    2,824,833(13)               36.9%(6)
3800 N. LAKE SHORE DRIVE
CHICAGO, IL 60613

Alpha Capital
Aktiengesellschaft                       690,000(14)              15.5%(15)
Pradafant 7, Furstentums 9490
Vaduz, Liechtenstein

                                       34
<PAGE>

Stonestreet Limited
Partnership                              405,000(16)               9.7%(17)
260 Town Centre Boulevard
Markham, Ontario 13R 8H8, Canada

---------------------------------     --------------------      ------------
All  officers  and  directors as
       a group (3 people)              4,205,936(4)(7)(10)        55.3%(19)


(1) The number of shares of common stock owned are those "beneficially owned" as
determined  under the rules of the Securities and Exchange Commission, including
any  shares  of  Common  Stock as to which a person has sole or shared voting or
investment  power  and any shares of Common Stock which the person has the right
to  acquire within 60 days through the exercise of any option, warrant or right.
Shares  of  Common  Stock  subject  to  a  Convertible Note or Warrant currently
convertible  or  exercisable,  or  convertible or exercisable within 60 days are
deemed  outstanding  for  computing  the  percentage  of the person holding such
Convertible  Note  or  Warrant, but are not deemed outstanding for computing the
percentage  of  any  other  person.

(2)  Using  3,752,250  shares  of Common Stock outstanding as of March 23, 2006.

(3)  Joseph  Wagner  is  our  Chief  Executive Officer, President, Secretary and
Director.

(4)  Includes  the  effects  of  Voting Agreements and Series A Preferred Stock.
Frank  Goldstin  entered  into  a  voting agreement with Joseph Wagner regarding
544,240  shares  of  Common  Stock,  and  a  voting  agreement  with Jean Wilson
regarding  544,240  shares  of Common Stock, owned by Mr. Goldstin (collectively
referred  to  herein as the "Voting Agreements"). The Voting Agreements began on
July  28,  2004, and end on December 31, 2009. There are no voting trustees. The
Voting Agreements provide that Mr. Wagner and Ms. Wilson are the true and lawful
agents or proxies of Mr. Goldstin with full power of substitution for and in the
name  of  Mr.  Goldstin  to  vote  544,240  and  544,240 shares of Common Stock,
respectively,  or give a written consent, in person or by proxy, at all meetings
of  the  Company's  shareholders,  and  in  all proceedings in which the vote or
written  consent  of  shareholders  may  be  required or authorized by law. This
number  also  takes  into  account  that  Frank Goldstin, Joseph Wagner and Jean
Wilson  each  hold  one (1) share of the three (3) shares of authorized Series A
Preferred  Stock.  The  three  (3)  shares  of Series A Preferred Stock have the
right,  voting  in  aggregate,  to  vote  on  all  shareholder  matters equal to
fifty-one  percent  (51%)  of the total vote (currently equal to an aggregate of
3,905,403  shares  of  common  stock, of which each of the three shares can vote
1,301,801  shares  of  common  stock).

(5)  Includes  350,000 shares of Common Stock held by Sandra M. Wagner, the wife
of  Joseph  Wagner,  of which 150,000 shares are subject to a risk of forfeiture
that  will  cease  to exist with respect to certain amounts of the shares over a
two-year  period.  Includes  544,240 shares of Common Stock held pursuant to the
voting  agreement with Frank Goldstin, and the effects of Mr. Wagner's ownership
of  one  share  of Series A Preferred Stock as described in footnote (4) of this
table,  above.

(6)  Using  7,631,633  shares  outstanding  as of March 23, 2006, which includes
3,752,250  shares  of  common  stock  outstanding  and  three shares of Series A
Preferred Stock outstanding which are able to vote in aggregate 3,905,403 shares
of  common  stock.

                                       35
<PAGE>

(7)  Jean  Wilson  is  our  Chief  Operating  Officer,  Treasurer  and Director.

(8)  Includes  70,000  shares  of  Common  Stock  that  are subject to a risk of
forfeiture  that  will  cease  to  exist  with respect to certain amounts of the
shares  over  a  three-year period. Includes 544,240 shares of Common Stock held
pursuant  to  the  voting agreement with Frank Goldstin, and the effects of Mrs.
Wilson's  ownership  of  one  share  of Series A Preferred Stock as described in
footnote  (4)  of  this  table,  above.

(9)  Christopher Spencer is our Director.

(10) Pursuant to Mr. Spencer's Consulting Agreement (described in greater detail
under  "Directors  and  Officers,"  above, we agreed to issue Mr. Spencer 25,000
shares  of  our  common  stock  upon  Mr.  Spencer's  entry  into the Consulting
Agreement,  which  shares  have  since  been issued and have agreed to issue Mr.
Spencer  25,000  shares  on  March  31, 2006, 25,000 shares on June 30, 2006 and
25,000  on  September  30, 2006. As a result of the fact that we agreed to issue
Mr.  Spencer  25,000  shares  on March 31, 2006 (within the next 60 days), he is
deemed  to  be  the  beneficial  owner of 50,000 shares of our common stock (see
footnote  (1)  above).

(11)  Using  3,777,250 shares of common stock outstanding, which number includes
the  25,000  shares  which Mr. Spencer is eligible to receive on March 31, 2006.

(12)  Frank  Goldstin served our Chief Executive Officer until February 17, 2005
and  our  Director  until  December  19,  2005  (as  described  under  "Certain
Relationships  and  Related  Transactions,"  below).

(13)  Includes  the ownership of 1,088,480 shares of Mr. Goldstin's common stock
which  are  subject to voting agreements described under footnote (4) above, and
includes  Mr.  Goldstin's ownership on one share of our Series A Preferred Stock
(also  described  in  greater detail under footnote (4) above), which allows Mr.
Goldstin  to  vote  1,293,128  shares  of  our  common  stock in addition to the
1,533,032  shares  of  common  stock  which  he  otherwise  holds.

(14)  Represents  575,000  shares  of  Common  Stock issuable upon conversion of
Convertible  Notes  and  115,000  shares  of Common Stock underlying the Class A
Warrants. Alpha Capital Aktiengesellschaft ("Alpha") has contractually agreed to
restrict  its  ability to convert its Convertible Notes or exercise its Warrants
and  receive shares of our Common Stock such that the number of shares of Common
Stock held by Alpha Capital and its affiliates after such conversion or exercise
does not exceed 9.99% of the then issued and outstanding shares of Common Stock.
In  accordance with Rule 13d-3, Konard Ackerman may be deemed the control person
of  the  shares  owned  by  Alpha  Capital.  Mr.  Ackerman  disclaims beneficial
ownership  of  the  shares  of  Common  Stock  owned  by  Alpha  Capital.

(15)  Using  4,442,250  shares  of  common stock outstanding, which includes the
conversion of $1,150,000 in Notes held by Alpha for approximately 575,000 shares
of our common stock and the exercise of Class A Warrants held by Alpha which are
exercisable  for  115,000  shares  of  our  common  stock.

(16)  Represents  335,000  shares  of  Common  Stock issuable upon conversion of
Convertible Notes and 70,000 shares of Common Stock underlying Class A Warrants.
Stonestreet  previously  converted  $30,000 of the principal amount of its notes
and  $390  in  interest  into  40,257  post  split shares of our common stock in
September  2004.  Stonestreet  Limited  Partnership  ("Stonestreet")  has
contractually agreed to restrict its ability to convert its Convertible Notes or
exercise  its  Warrants  and  receive  shares  of our Common Stock such that the
number  of  shares  of Common Stock held by Stonestreet and its affiliates after
such  conversion  or  exercise  does  not  exceed  9.99%  of the then issued and
outstanding  shares  of  Common  Stock.

(17)  Using  4,157,250  shares  of  common stock outstanding, which includes the
conversion  of  $670,000  in Notes held by Stonestreet for approximately 335,000

                                       36
<PAGE>

shares  of  our  common  stock  and the exercise of the Class A Warrants held by
Stonestreet  which  are  exercisable  for  70,000  shares  of  our common stock.

(18)  Using  7,656,633  shares of common stock outstanding which amount includes
the voting rights associated with the shares of Series A Preferred Stock held by
Mr. Wagner and Mrs. Wilson and 25,000 shares which Mr. Spencer is eligible to be
issued  on  March  31,  2006.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     On  February  17,  2005,  Frank  Goldstin  resigned  as the Company's Chief
Executive  Officer.  Also  on  February  17,  2005,  Joseph Wagner the Company's
President resigned as Chief Operating Officer and was appointed as the Company's
Chief  Executive Officer by the Company's Board of Directors to fill the vacancy
left  by  Mr.  Goldstin  and  Jean  Wilson,  the  Company's VP of Operations was
appointed  as  the Company's Chief Operating Officer to fill the vacancy left by
Mr.  Wagner.

Employment  and  Consulting  Agreements

     Effective  August  1, 2004, the Company entered into a consulting agreement
with Joseph Wagner and an employment agreement with Jean Wilson, as set forth in
more detail under the section entitled "Directors, Executive Officers, Promoters
and  Control  Person",  above.  Mr.  Wagner  will  receive  $200,000 per year as
compensation  for his services as the Company's current Chief Executive Officer,
President  and  Secretary.  In  August  2004,  Mr. Wagner received as additional
compensation  225,000 restricted shares of the Company's Common Stock subject to
a  risk  of  forfeiture. On December 31, 2004, 75,000 shares became fully vested
and  on  December 31, 2005, an additional 75,000 shares became fully vested. The
risk  of  forfeiture covering the remaining 75,000 shares will cease to exist on
December  31, 2006. Mr. Wagner is also a director of the Company. Mr. Wagner may
engage  in business activities or interests outside of the Company which are not
adverse  or  competitive  to  the Company. Ms. Wilson receives compensation at a
rate  of  $125,000  per  year  for her services as the Company's Chief Operating
Officer,  Treasurer and as a director of the Company. In August 2004, Ms. Wilson
received  as  additional consideration 70,000 restricted shares of the Company's
Common  Stock  subject  to  a  risk  of forfeiture. On December 31, 2004, 25,000
shares became fully vested and on December 31, 2005, an additional 22,500 shares
became fully vested. The risk of forfeiture covering the remaining 22,500 shares
will  cease  to  exist  on  December  31,  2006.

Series  A  Preferred  Stock

     The Company designated three (3) shares of Preferred Stock, $.001 par value
per  share  on  December 28, 2004 (the "Series A Preferred Stock"). The Series A
Preferred  Stock  has  no  dividend  rights,  no  liquidation preference, and no
conversion  or  redemption  rights.  However,  the  three (3) shares of Series A
Preferred  Stock have the right, voting in aggregate, to vote on all shareholder
matters  equal  to  fifty-one  percent  (51%) of the total vote. For example, if
there are 10,000,000 shares of the Company's Common Stock issued and outstanding
at  the  time  of  a  shareholder vote, the holders of Series A Preferred Stock,
voting  separately  as  a  class,  will  have  the right to vote an aggregate of
10,400,000  shares,  out  of  a  total  number  of  20,400,000  shares  voting.
Additionally,  the  Company  shall  not  adopt  any  amendments to the Company's
Bylaws,  Articles  of  Incorporation,  as  amended,  make  any  changes  to  the
Certificate of Designations establishing the Series A Preferred Stock, or effect
any  reclassification  of  the Series A Preferred Stock, without the affirmative
vote  of at least 66-2/3% of the outstanding shares of Series A Preferred Stock.
However, the Company may, by any means authorized by law and without any vote of
the  holders  of shares of Series A Preferred Stock, make technical, corrective,
administrative  or  similar  changes to such Certificate of Designations that do
not,  individually  or  in  the  aggregate,  adversely  affect  the  rights  or
preferences  of  the  holders  of  shares  of  Series  A  Preferred Stock. Frank
Goldstin, Joseph Wagner and Jean Wilson, who each serve as executive officers of
the  Company,  were  each  issued  one  (1)  share  of Series A Preferred Stock.

                                       37
<PAGE>

     In  December  2005,  we  entered into a "Severance Agreement and Release in
Full"  (the  "Severance  Agreement")  with  Frank  Goldstin,  our  former  Chief
Executive  Officer and a former Director of us until December 19, 2005, at which
time  Mr.  Goldstin  failed  to  be  re-elected to our Board of Directors at our
annual  meeting  of  shareholders,  in  connection  with  the termination of Mr.
Goldstin's  employment.  Pursuant  to the Severance Agreement, he was provided a
lump  sum  payment  in the amount of $50,000, less applicable tax withholding, a
payment  of  $5,538.43,  less  applicable  tax  withholding,  in connection with
amounts  previously  owed to Mr. Goldstin in connection with his employment, and
Mr.  Goldstin  was  given  an  IBM  Thinkpad laptop which he had used during his
employment  (collectively  the  "Severance  Pay").

     Pursuant  to  the  Severance  Agreement, Mr. Goldstin agreed to release and
forever  discharge  us,  our  former,  present  and  future officers, directors,
employees,  agents,  administrators,  persons and corporations who may be liable
for  the  conduct  of  any  of  the  aforesaid  parties, from any and all debts,
demands,  promises,  actions, claims, liabilities, damages, and causes of action
of  any  nature, known or unknown, both in law and equity, which have accrued or
may  ever  accrue  to  Mr.  Goldstin, his heirs, executors, legal administrator,
successors,  or  assigns  by  reason  of  his employment with us. Mr. Goldstin's
release  included  all  claims  whether  arising  in  tort, contract or statute.
Additionally,  pursuant to the Severance Agreement, Mr. Goldstin agreed to repay
us  the  Severance  Pay  if  he violates the Severance Agreement in any material
respect.

     On  December 19, 2005, Christopher Spencer was elected as a Director of the
Company  at  the Company's annual meeting of shareholders. Frank Goldstin failed
to  be  re-elected  as  a  Director  of the Company at the same meeting. Also on
December  19,  2005,  we  entered into a twelve (12) month, renewable consulting
agreement  with Christopher Spencer, to serve as our Director, pursuant to which
Mr. Spencer is to receive $2,000 per month and an aggregate of 100,000 shares of
our  restricted common stock. Mr. Spencer's consulting agreement is described in
greater  detail  above  under  "Employment  and  Consulting  Agreements."

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  EXHIBITS

Exhibit  No.    Description  of  Exhibit
----------      ----------------------
2.1(1)          Exchange  Agreement

3.1(2)          Articles  of  Incorporation

3.2(3)          Articles  of  Amendment  to  Articles  of  Incorporation

3.3(4)          Articles  of  Amendment  to  Articles  of  Incorporation

3.4(5)          Certificate  of  Designation  of  Series A Preferred Stock

3.5 (6)         Certificate of Amendment to the Company's Articles of
                Incorporation

3.6(3)          Bylaws

10.1(7)         Subscription  Agreement  dated  June  30,  2004

10.2(7)         Convertible  Note

10.3(7)         Common  Stock  Purchase  Warrant  A

10.4(7)         Common  Stock  Purchase  Warrant  B

10.5(7)         Employment  Agreement  with  Frank  Goldstin

                                       38
<PAGE>

10.6(7)         Consulting  Agreement  with  Joseph  Wagner

10.7(7)         Employment  Agreement  with  Jean  Wilson

10.8(8)         Voting  Agreement  between  Joseph  Wagner  and Frank Goldstin

10.9(8)         Voting  Agreement  between  Jean  Wilson  and  Frank  Goldstin

10.10(9)        Fiori  Asset  Purchase  Agreement

10.11(10)       Frank  Goldstin  Employment  Agreement

10.12(10)       Legal Service Agreement  with  David  Loev

10.13(11)       Asset Acquisition Agreement with Musters & Company, Inc.

10.14(11)       Waiver Agreement

10.15*          Christopher Spencer Consulting Agreement

21.1*           List of the Subsidiaries of XA, INC.

31.1*           Certificate  of  the  Chief  Executive  Officer  pursuant  to
                Section  302  of  the  Sarbanes-Oxley  Act  of  2002     *

31.2*           Certificate  of  the  Chief  Financial  Officer  pursuant  to
                Section  302  of  the  Sarbanes-Oxley  Act  of  2002


32.1*           Certificate  of  the Chief Executive Officer to Section 906
                of  the  Sarbanes-Oxley  Act  of  2002     *

32.2*           Certificate  of  the Chief Financial Officer to Section 906
                of  the  Sarbanes-Oxley  Act  of  2002

     (1)  Filed  as  Exhibit  2.1  to  the  Company's  Form  8-K  filed with the
          Securities  and  Exchange  Commission  on  December  8,  2003,  and
          incorporated  herein  by  reference.

     (2)  Filed  as Exhibits 3(i) and 3(ii) to the Company's Form 10-SB12G filed
          with  the  Securities  and  Exchange  Commission on June 15, 2001, and
          incorporated  herein  by  reference.

     (3)  Filed  as  Exhibit  3.1  to  the  Company's  Form  8-K  filed with the
          Securities  and  Exchange  Commission  on  February  2,  2004,  and
          incorporated  herein  by  reference.

     (4)  Filed  as  Exhibit  3.1  to  the  Company's  Form  8-K  filed with the
          Securities  and  Exchange  Commission  on  December  9,  2004,  and
          incorporated  herein  by  reference.

     (5)  Filed  as  Exhibit  3.1  to  the  Company's  Form  8-K  filed with the
          Securities  and  Exchange  Commission  on  January  5,  2005,  and
          incorporated  herein  by  reference.

     (6)  Filed as  an  Exhibit  to  the  Company's  Form  8-K  filed  with  the
          Commission  on  December  21,  2005.

     (7)  Filed  as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, and 10.7 to the
          Company's  Form  SB-2 Registration Statement filed with the Securities
          and Exchange Commission on August 17, 2004, and incorporated herein by
          reference.

                                       39
<PAGE>

     (8)  Filed  as  Exhibit  10.1  and  10.2  to  our  Form  8-K filed with the
          Securities and Exchange Commission on August 6, 2004, and incorporated
          herein  by  reference.

     (9)  Filed  as  Exhibit  1.1  to  the  Company's  Form  8-K  filed with the
          Securities  and  Exchange  Commission  on  September  1,  2004,  and
          incorporated  herein  by  reference.

     (10) Filed as  Exhibits  to  our  Report  on  Form  10-KSB  for  the fiscal
          year  ended  December  31, 2004, filed with the Commission on February
          24,  2005,  and  incorporated  herein  by  reference.

     (11) Filed as  Exhibits  to  our  Form  8-K  filed  with  the Commission on
          March  11,  2005  and  incorporated  herein  by  reference.

*    Filed  herein

     (b)  REPORTS  ON  FORM  8-K

The  Company  filed the following one report on Form 8-K during the last quarter
of  the  fiscal  period  covered  by  this  report:

     (1)  Form 8-K  filed  on  December  21,  2005,  to  report that the Company
          had  filed a Certificate of Amendment to its Articles of Incorporation
          to increase its authorized shares and reauthorize the par value of its
          common  stock;  report  the  election  of  Christopher  Spencer to the
          Company's  Board  of Directors at the Company's 2005 annual meeting of
          stockholders;  and to announce the Company's adoption and ratification
          of  the  Company's  2005  Stock  Incentive  Plan.

The  Company  filed  the following one report on Form 8-K subsequent to the last
quarter  of  the  fiscal  period  covered  by  this  report:

     (1)The Company  filed  a  report  on  Form  8-K  on  January  13,  2006, to
          report XA Scenes, Inc. (the Company's wholly owned subsidiaries) entry
          into  a  lease for property in New York City, New York; to report that
          the  Company  had  entered  into  a  Severance  Agreement  with  Frank
          Goldstin,  a former officer and Director of the Company; and to report
          the Company's entry into a Legal Services Agreement with its attorney.


ITEM  14.  PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES

AUDIT  FEES

The  aggregate  fees billed for each of the fiscal years ended December 31, 2005
and  2004 for professional services rendered by the principal accountant for the
audit  of  the  Company's  annual  financial statements was $29,217 and $10,000,
respectively.  The  aggregate  fees  billed  for  each of the fiscal years ended
December  31,  2005 and 2004 for professional services rendered by the principal
accountant  for  review of the financial statements included in the registrant's
Form  10-QSB  or  for  services  that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years  was  $12,744  and  $5,000,  respectively.

AUDIT  RELATED  FEES

None.


TAX  FEES

None.

                                       40
<PAGE>

ALL  OTHER  FEES

The  aggregate  fees billed for each of the fiscal years ended December 31, 2005
and  2004  for products and services provided by the principal accountant, other
than  the  services  reported  above  was  $38,950  and  $9,000,  respectively.


                                 SIGNATURES

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

                                             XA,  INC.

DATED: March 24, 2006                  By:   /s/  Joseph  Wagner
                                             ------------------------
                                             Joseph  Wagner
                                             Chief  Executive  Officer

     In  accordance  with  the  Securities Exchange Act of 1934, this report has
been  signed  below  by the following persons on behalf of the Registrant and in
the  capacities  and  on  the  dates  indicated.

NAME                    TITLE                              DATE

/s/  Joseph  Wagner     Chief Executive Officer            March 24, 2006
----------------------
Joseph  Wagner

/s/  Jean  Wilson       Principal Financial Officer        March 24, 2006
----------------------
Jean Wilson

                                       41
<PAGE>