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,  2004

[ ]     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.  [ ]

<PAGE>

     The  issuer's  revenues  for the most recent fiscal year ended December 31,
2004  were  $8,544,659.

     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  February  17,  2005,  was approximately
$2,173,127.

     As  of  February  22, 2005 the issuer had 3,516,250 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                            13

    Item  3.             Legal  Proceedings                                   13

    Item  4.             Submission  of  Matters  to  a  Vote  of
                         Security  Holders                                    13


                                     Part  II

    Item  5.             Market  for  Common  Equity  and  Related
                         Stockholder  Matters                                 14

    Item  6.             Management's  Discussion  and  Analysis  or
                         Plan  of  Operation                                  16

    Item  7.             Financial  Statements                                25

    Item  8.             Changes  in  and  Disagreements  with
                         Accountants  on  Accounting  and  Financial
                         Disclosure                                           38

    Item  8A.            Controls  and  Procedures                            38

    Item  8B             Other Information                                    38


                                    Part  III

    Item  9.             Directors,  Executive  Officers,  Promoters
                         and  Control  Persons;  Compliance  with
                         Section  16(a)  of  the  Exchange  Act               39

    Item  10.            Executive  Compensation                              43

                                        2
<PAGE>

    Item  11.            Security  Ownership  of  Certain  Beneficial
                         Owners and Management and Related Stockholder
                         Matters                                              44

    Item  12.            Certain  Relationships  and  Related
                         Transactions                                         46

    Item  13.            Exhibits  and  Reports  on  Form  8-K
                         (a)   Exhibits                                       47

                         (b)   Reports  on  Form  8-K                         48

    Item  14.            Principal  Accountant  Fees  and  Services
                         Signatures                                           49

                                     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,  2004.

BUSINESS  DEVELOPMENT

     XA,  Inc. (the "Company"), 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.

                                        3
<PAGE>

     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  Chief  Executive
Officer  and  a 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  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, Genesis and Filings are
collectively  referred  to  herein  as  the  "Selling  Security Holders." 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 and the Class B Warrants
are collectively 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 are valid until March 2, 2005, at which
time  they  expire.

     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.

RECENT  AMENDMENTS  TO  THE  COMPANY'S  ARTICLES  OF  INCORPORATION

     The  Company  filed a Certificate of Amendment ("Certificate of Amendment")
to  its  Articles  of Incorporation with the Secretary of State of Nevada, which
became  effective  December  9,  2004,  to  affect  a  name change, increase its
authorized  shares,  affect  a 1:20 reverse stock split, and reauthorize the par
value  of  its common stock. The Certificate of Amendment affected a name change
of  the Company to "XA, Inc.", increased the authorized shares of the Company to
Two  Hundred  Million  (200,000,000)  shares of common stock, and authorized the
issuance  of  Ten Million (10,000,000) shares of preferred stock. As a result of
the  1:20  reverse  stock  split  affected  in the Certificate of Amendment, the
Company now has Ten Million (10,000,000) shares of Common Stock and Five Hundred
Thousand  (500,000)  shares  of  Preferred  Stock  authorized.

                                        4
<PAGE>

     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.
Business  of  the  Company

BUSINESS  OF  THE  COMPANY

     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  fifteen  (15)  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, 2004, XA planned and
executed  over  one  hundred  (100)  events  that  were attended by more than an
aggregate  of approximately twenty thousand (20,000) people in the United States
and  foreign  markets.

     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.

                                        5
<PAGE>

Industry  and  Market  Overview

     According  to an event marketing study conducted by PROMO Magazine in 2004,
and  published  in  its January 1, 2005 edition, marketers spent $152 billion in
event  marketing  in  2003, up approximately 15% since 2002. Additionally, PROMO
reported  that  in  2003,  budgets  for  event  marketing  reached an average of
$901,935.  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.

     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  its  market environment is positive for two reasons: 1)
companies  in  the  United  States are increasing their use of events to achieve
their  marketing  efforts;  and  2)  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.

                                        6
<PAGE>

     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
     *  Destination  Management

     XA earns a management fee when it provides general management services.  In
some cases, all or a part of the management fee may be supplemented by an income
sharing  arrangement  with the client. XA earns fees on a fee-for-services basis
when  it  undertakes  business  communications  projects.

     XA  also earns fees payable in advance based on the spread between its cost
and the cost that it charges its clients for leasing exhibition space, equipment
rentals,  sponsorships,  and  ticket  sales.

     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:

                                        7
<PAGE>

     *  Project  oversight
     *  Budget  oversight
     *  Quality  assurance  and  control
     *  Project  funding  and  sponsorship  development
     *  Project  control  and  accountability
     *  Event  promotion  and  marketing  creation
     *  Schedule  management
     *  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
     *  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
     *  Collateral  materials  design  and  distribution
     *  Entertainment  and  speaker  scripting  and  booking
     *  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
     *  Food  and  beverage  management

                                        8
<PAGE>

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.

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.

     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  an advertising and public
relations  program  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.

                                        9
<PAGE>

     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  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.

     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.

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  twenty-six  (26)  full-time  and  thirty  (30)  part-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).

                                       10
<PAGE>

     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
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  six  (6) 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:

                                       11
<PAGE>

     *    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)."  Additionally,  the  Company also owns the following internet domain
names:

     *  www.gmproductions.com
     *  www.gmproductions.com
     *  www.gmprodutions.net
     *  www.expagency.com
     *  www.experientialagency.com

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

     The  Company  has  filed  for  a  trademark  for  "XA".

Subsequent  Events

                                       12
<PAGE>

     On  January  3,  2005,  in  furtherance  of  the  Company's  growth through
acquisition strategy, the Company entered into an Asset Acquisition Agreement to
purchase  substantially all of the 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.  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 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.

     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.

     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.

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  $9,590  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 current lease commitment is $1,250 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
$1700  per  month  plus  the  obligation  to  pay  utilities.

ITEM  3.  LEGAL  PROCEEDINGS

     The  Company  is not a party to, and its properties are not the subject of,
any  material  pending legal proceeding nor to the knowledge of the Company, are
any  such  legal  proceedings  threatened  against  the  Company.

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

     The  Company  filed a Certificate of Amendment ("Certificate of Amendment")
to  its  Articles  of Incorporation with the Secretary of State of Nevada, which
became  effective  December  9,  2004,  to  affect  a  name change, increase its
authorized  shares,  affect a reverse stock split, and reauthorize the par value
of  its common stock. The Certificate of Amendment affected a name change of the
Company  to  "XA,  Inc.",  increased the authorized shares of the Company to Two
Hundred  Million  (200,000,000)  shares  of  common  stock,  and  authorized the
issuance  of  Ten Million (10,000,000) shares of preferred stock. As a result of
the  1:20  reverse  stock  split  affected  in the Certificate of Amendment, the
Company now has Ten Million (10,000,000) shares of Common Stock and Five Hundred
Thousand  (500,000)  shares  of  Preferred  Stock  authorized.

                                       13
<PAGE>

     The  Certificate  of Amendment was approved at the Company's annual meeting
("Meeting")  held  December  3,  2004.  The  number  of  shares  of  the Company
outstanding  as  of  the  record  date of the Meeting was 3,298,555 post-reverse
stock  split shares and the number of shares entitled to vote at the Meeting was
the  same.  The  number  of  shares  which  voted  to  approve the Amendment was
2,114,232  post  reverse stock split shares, which represented a majority of the
issued  and  outstanding  shares  of  the  Company.

                                     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,  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
               December  31,  2003               $0.08          $0.08
               September  30,  2003              $0.08          $0.08

*  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.

                                       14
<PAGE>

    There were 39 holders of record of the Common Stock as of February 22, 2005.
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.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     In December 2004, the Company issued 27,112 post split restricted shares of
the  Company's  Common  Stock to Nine (9) employees in consideration of services
provided  to  the Company.  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  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 in a transaction
that was not be registered under the Securities Act of 1933.  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.

Recent  Sales  of  Registered  Securities

     In  November  2004,  the  Company  issued 40,577 post reverse shares of the
Company's  Common  Stock  to  Greenwich in connection with a conversion of their
Convertible  Notes.

        ISSUANCES SUBSEQUENT TO THE THREE MONTHS ENDED DECEMBER 31, 2004

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.  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.

                                       15
<PAGE>

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
fifteen (15) 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, and using advanced
communications  technologies.

                                       16
<PAGE>

COMPARISON  OF  OPERATING  RESULTS

FISCAL  YEAR  ENDED DECEMBER 31, 2004 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
2003

     Sales  revenue  for  the  fiscal  year  ended  December  31, 2004 increased
$3,075,764  (or  56.2%)  to  $8,544,659 as compared to $5,468,895 for the fiscal
year  ended  December  31,  2003.  The  increase in sales revenue was due to the
acquisition  of new clients and the expansion, as well as the Company's internal
business  development  efforts.

     Cost  of  goods sold as a percentage of revenue for the year ended December
31, 2004 increased to 72.6% of gross revenue at $6,206,254 as compared to 62% of
gross  revenue  at $3,388,816 for the fiscal year ended December 31, 2003. Costs
of  goods  sold  increased  83.1%  for  the  fiscal year ended December 31, 2004
compared  to  the  fiscal  year ended December 31, 2003. The increase in cost of
goods  sold was due to the increase in sales and increased venue and entertainer
expenses  for  larger productions which had lower margins, as well as variations
in  the  Company's  costs  of  good  sold  from  quarter  to  quarter.

     Gross  profit as a percentage of sales ("gross profit margin") decreased to
27.4% for the fiscal year ended December 31, 2004 from 38.0% for the fiscal year
ended  December  31,  2003.  The  decrease in gross profit margin was due to the
56.2% increase in sales revenue that was offset by the 83.1% increase in cost of
goods  sold.

     General and administrative ("G&A") expenses increased $1,694,432 (or 83.7%)
to $3,718,794 for the fiscal year ended December 31, 2004 compared to $2,024,362
for the year ended December 31, 2003. The increase in administrative expense was
principally attributed to costs associated with the capital campaign, the
addition of key personnel, acquisition costs, platform development integral to
our business plan, and accounting and legal professional fees.

     The  Company had a loss from operations of ($1,380,389) for the fiscal year
ended  December  31, 2004, compared to income from operations of $55,717 for the
year  ended December 31, 2003. This was mainly attributable to greater increases
in  G&A expenses and costs of good sold compared to the increase in revenues for
the  year  ended  December 31, 2004.

     Other income and expenses was $17,372 for the year ended December 31, 2004,
consisting  of $41,865 of other income and ($24,493) of other expenses, compared
to  ($41,433)  for  the year ended December 31, 2003, which consisted of $750 of
other  income  and  ($42,183)  of  other  expenses.

     The  Company  had  a net loss of ($838,017) for the year ended December 31,
2004  as compared to net income of $14,284 for the year ended December 31, 2003.
Net loss was principally attributed to costs associated with a capital campaign,
the addition of key personnel, acquisition costs,  platform development integral
to our business plan, and accounting and legal professional fees.

                                       17
<PAGE>

LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  December  31,  2004,  the  Company's  total  current  assets  were
$1,774,810,  which  consisted  of  $1,037,117  of  cash,  $459,029  of accounts
receivable, $186,606 of inventories, $2,734 of prepaid expenses, and $89,324 of
prepaid  employment  contract.  The  prepaid  employment  contract consisted of
225,000 shares of the Company's Common Stock which were issued to the Company's
President, Joseph Wagner and 70,000  shares  of the Company's restricted Common
Stock which were  issued  to  the  Company's Vice President of Operations, 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  the  remaining 150,000  are  subject  to  a  risk   of
forfeiture.  Of  Ms.  Wilson's  75,000  restricted shares, 25,000 became  fully
vested as of December 31, 2004, and the remaining 50,000 are subject to a  risk
of forfeiture.

     The  Company  had working capital of $936,994 and a ratio of current assets
to  current  liabilities  of  2.12.

     The  Company  had  fixed  assets of $124,440 as of December 31, 2004, which
consisted  of  equipment  of  $166,463,  furniture  and fixtures of $42,175, and
leasehold  improvements  of  $40,735,  offset  by  ($124,933)  in  accumulated
depreciation.

     The  Company  had other assets of $1,844,279 as of December 31, 2004, which
consisted  of  $310,574  discount  on  convertible  notes  payable,  $525,000 of
deferred  taxes,  $162,291 of prepaid employment bonus, $38,180 of deposits, and
$808,234  of  goodwill.  The prepaid employment bonus consisted of an employment
contract  entered  into  with  the  President  of  Musters  &  Company, Inc.  in
connection with an Asset Acquisition Agreement.

     The  Company  had total assets of $3,743,529 as of December 31, 2004, which
consisted  of  current assets of $1,774,810, fixed assets of $124,440, and other
assets  of  $1,844,279.

     The  Company  had  current liabilities of $837,816 as of December 31, 2004,
which  consisted  of  $246,126  of accounts payable, $17,798 of accrued payroll,
$4,206  of  withheld  and  accrued  taxes,  and  $569,686  of unearned interest.

     The  Company  had  total  long  term  debt of $2,032,500 for the year ended
December  31,  2004,  which consisted of a note payable. This amount consists of
Convertible Notes held by five (5) unrelated parties. Each Note accrues interest
at  6%  per year and is convertible into the Company's Common Stock at $2.00 per
share.  The  Notes  can  therefore  be  converted  into  1,016,250 shares of the
Company's  Common  Stock  as  of  December  31,  2004.

     The  Company  had net cash used by operating activities of ($1,205,041) for
the  year  ended December 31, 2004, which consisted of a net loss of ($838,017),
provision for deferred taxes of ($525,000), depreciation of $6,403, amortization
of  discounts  on  note  payable  of  $117,914,  stock  for services of $40,750,
increase  in  accounts  receivable  of  ($259,360),  increase  in inventories of
($140,676), increase in prepaid expenses of ($2,734), increase in officers loans
of  ($53,371),  increase in prepaid employment contracts of ($150,000), increase
in  accounts  payable  of  $150,409,  decrease  in withheld and accrued taxes of
$64,936,  and  increase  in  unearned  revenue  of  $564,025.

                                       18
<PAGE>

     The Company had net cash used by investing activities of ($283,753) for the
year  ended December 31, 2004, which consisted of ($96,812) of purchase of fixed
assets,  ($148,761)  of  increase  in  goodwill,  and  ($38,180)  of increase in
deposits.

     The Company had $2,211,259 of net cash used by financing activities for the
year  ended  December  31,  2004,  which  consisted  of sales of common stock of
$615,000,  sale  of  warrants  of $121,000, increase in discounts on convertible
notes  ($525,805),  payments on line of credit ($205,400), increase in long-term
debt  of  $2,500,000  and  payments  on  long-term  debt  of  ($294,536).

     The  Company  requires  $1  to $3 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.  We recently 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.  There is currently
$2,032,500  remaining under the Notes, 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  had  converted  $267,500  of  principal  and $1,679 of accrued interest
into  53,835  post  split  shares  of  Common  Stock  as  of September 30, 2004,
leaving  $2,232,500 (excluding accrued interest) due as of  September  30,  2004
and  as  of  the  date  of  this  filing  have converted an additional  $200,000
of  principal  and  $2,883.33  of interest into 40,577 shares of  Common  Stock,
leaving  $2,032,500  still  owed  to  the  Note Holders as of the date  of  this
filing.

     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 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.

                                       19
<PAGE>

     At this time, no 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.

                                  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 $3 million of financing to implement
our  business  plan, which is in addition to $2.5 million already raised. 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. 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.  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  FRANK  GOLDSTIN,  JOSEPH  WAGNER  AND  JEAN  WILSON.
-----------------------------------------------------------------------------

   The  success  of  the  Company  heavily depends upon the personal efforts and
abilities  of Frank Goldstin, Joseph Wagner and Jean Wilson. Mr. Goldstin served
as  the Company's Chief Executive Officer during the time period of this report,
and  as  a  Director of the Company pursuant to an employment agreement with the
Company.  Mr.  Goldstin  resigned  as  Chief  Executive  Officer  of the Company
effective  February  17,  2005.  Joseph  Wagner  has  entered  into a consulting
agreement with the Company whereby Mr. Wagner serves as the Company's, President
and  Secretary.  During the time period of this report Mr. Wagner also served as
the  Company's  Chief  Operating  Officer,  and as of February 17, 2005, he will
serve as the Company's Chief Executive Officer. 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 Treasurer and as a director of the Company pursuant to
an  employment agreement with the Company.  Additionally, during the time period
of  this  report,  Ms.  Wilson  served  as  Vice President of Operations for the
Company, and was appointed as Chief Operating Officer of the Company on February
17,  2005.  Mr.  Goldstin,  Mr.  Wagner and Ms. Wilson may voluntarily terminate
their  employment  at any time. The loss of Mr. Goldstin, 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.
Goldstin,  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.

                                       20
<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.

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 Frank Goldstin,
Joseph  Wagner  and Jean Wilson were our only officers during the period of this
report,  and  Mr.  Goldstin  resigned as an officer of the Company subsequent to
this  report.  The Company has limited employees in addition to its small number
of  officers.  Further,  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 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.

                                       21
<PAGE>

FRANK  GOLDSTIN, JOSEPH WAGNER AND JEAN WILSON CAN VOTE AN AGGREGATE OF 81.8% OF
OUR  COMMON  STOCK  AND  CAN  EXERCISE  CONTROL  OVER  CORPORATE  DECISIONS.
----------------------------------------------------------------------------

     Frank  Goldstin,  Joseph  Wagner  and  Jean Wilson can vote an aggregate of
5,617,930  shares  (or  81.8%)  of  our  outstanding Common Stock which includes
3,503,700  votes  due  to their aggregate ownership of Series A Preferred Stock.
Frank Goldstin 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 1,633,032
shares  of  Common  Stock owned by Mr. Goldstin in addition to Common Stock that
Mr.  Wagner and Ms. Wilson otherwise respectively own. Mr. Goldstin retained the
right  to  vote  544,552  shares  of Common Stock. 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, Mr. Goldstin,
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, regardless
of whether their aggregate Common Stock ownership falls below 50%. The interests
of  Mr. Goldstin, 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.

                                       22
<PAGE>

THE  COMPANY HAS ESTABLISHED BLANK CHECK PREFERRED STOCK WHICH CAN BE DESIGNATED
BY  THE  COMPANY'S  BOARD  OF  DIRECTORS  WITHOUT  SHAREHOLDER  APPROVAL.
-----------------------------------------------------------------------------

     The  Company  has 500,000 shares of blank check 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.  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.
As  a result of this fact 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.

                                       23
<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.  See  the  section entitled "Disclosure of Commission Position of
Indemnification  for  Securities  Act  Liabilities".

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.

                                    24
<PAGE>

Pollard-Kelley Auditing Services, Inc.
Auditing Services
3250 West Market St, Suite 307, Fairlawn, OH 44333 330-864-2265

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,  2004  and  2003, 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,  2004. 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,
2004  and  2003, and the results of its operations and it cash flows for each of
the  two  years  in  the period ended December 31, 2004, in conformity with U.S.
generally  accepted  accounting  standards.

Pollard-Kelley Auditing Services, Inc.

/S/ Pollard-Kelley Auditing Services, Inc.

Fairlawn, Ohio
February 8, 2005

                                  25
<PAGE>

<TABLE>
<CAPTION>

XA,  Inc.  and  Subsidiaries
CONSOLIDATED  BALANCE  SHEETS
December  31,  2004  and  2003

                                                     2004        2003
                                                 ------------  ----------
<S>                                                   <C>          <C>
  ASSETS
Current Assets
  Cash.                                          $ 1,037,117   $ 306,500
  Accounts receivable                                459,029     181,619
  Inventories                                        186,606           -
  Prepaid expenses.                                    2,734           -
  Prepaid employment contract                         89,324           -
  Officer's loans receivable                               -     319,129
                                                 ------------  ----------
       Total Current Assets                        1,774,810     807,248
Fixed Assets
  Equipment                                          166,463      74,936
  Furniture and fixtures                              42,175      48,978
  Leasehold improvements                              40,735           -
                                                 ------------  ----------
                                                     249,373     123,914
  Less accumulated depreciation                     (124,933)   (118,530)
                                                 ------------  ----------
                                                     124,440       5,384
Other Assets
  Discount on Convertible Notes Payable              310,574           -
  Deferred taxes                                     525,000           -
  Prepaid employment bonus                           162,291           -
  Deposits                                            38,180           -
  Goodwill                                           808,234           -
                                                 ------------  ----------
                                                   1,844,279           -
                                                 ------------  ----------
                                                 $ 3,743,529   $ 812,632
                                                 ============  ==========
  LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable                               $   246,126   $  34,246
  Accrued payroll                                     17,798      57,041
  Withheld and accrued taxes                           4,206      66,127
  Unearned revenues                                  569,686           -
  Line of credit                                           -     200,000
  Current portion of long term debt                        -      83,652
                                                 ------------  ----------
       Total Current Liabilities                     837,816     441,066
Long-term Debt
  Note payable                                     2,032,500     210,884
Stockholders' Equity
  Series A preferred stock                                 -           -
  Common stock                                         3,516      52,600
  Additional paid in capital                       2,170,532     448,400
  Retained income                                 (1,300,835)    (90,318)
  Subscription receivable                                  -    (250,000)
                                                 ------------  ----------
                                                     873,213     160,682
                                                 ------------  ----------
                                                 $ 3,743,529   $ 812,632
                                                 ============  ==========
See accompanying notes to financial statements.

</TABLE>

                                       26
<PAGE>

<TABLE>
<CAPTION>

XA,  Inc.  and  Subsidiaries
CONSOLIDATED  INCOME  STATEMENT
For  the  Years  Ended  December  31,  2004  and  2003

                                                      2004          2003
                                                  ------------  -----------

<S>                                                     <C>       <C>
Revenues
  Sales                                           $ 8,544,659   $5,468,895

Cost of goods sold
  Direct production costs                           6,206,254    3,388,816
                                                  ------------  -----------

Gross profit                                        2,338,405    2,080,079

Administrative expense
  Administrative                                    3,718,794    2,024,362
                                                  ------------  -----------

Income from operations                             (1,380,389)      55,717

Other income and expenses
  Other income                                         41,865          750
  Other expenses                                      (24,493)     (42,183)
                                                  ------------  -----------
                                                       17,372      (41,433)
                                                  ------------  -----------
Income before taxes                                (1,363,017)      14,284

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

Net Income (Loss)                                 $  (838,017)  $   14,284
                                                  ============  ===========

Earnings per Share
  Average shares outstanding                        3,003,007    1,869,167
  Basic                                           $     (0.28)  $     0.01

See accompanying notes to financial statements.

</TABLE>

                                       27
<PAGE>

<TABLE>
<CAPTION>

XA, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2004 and 2003

                                                                                    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>
Balance January 1, 2002                      -  $      -         1,000   $  1,000   $        -   $   (29,464) $      -   $ (28,464)
  Net loss                                   -         -             -          -            -       (75,138)        -     (75,138)
                                        ------  ---------  ------------  ---------  -----------  ------------- ---------   --------
Balance December 31, 2002                    -         -         1,000      1,000            -      (104,602)        -    (103,602)
  Merger with Synreal Services               -         -     2,200,000      2,200       62,800       (65,000)        -           -
     Exchange of private Company's
       stock -net                            -         -     1,768,231        769         (769)            -         -           -
     Recapitalization                        -                                 -       (65,000)       65,000         -           -

  13:1 forward stock split                   -         -    47,630,772     47,631      (47,631)            -         -           -
  Sale of stock                              -         -     1,000,000      1,000      499,000             -  (250,000)    250,000
  Net income                                 -         -             -          -            -        14,284         -      14,284
                                        ------  ---------  ------------  ---------  -----------  ------------ ----------   --------
Balance December 31, 2003                    -         -    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 September 30, 2004                   3  $      -     3,516,250   $  3,516   $2,170,532   $(1,300,835) $      -   $ 873,213
                                        ======  =========  ============  =========  ===========  ============ ==========   ========
See accompanying notes to financial statements.
</TABLE>

                                       28
<PAGE>

<TABLE>
<CAPTION>

XA,  Inc.  and  Subsidiaries
CONSOLIDATED  STATEMENT  OF  CASH  FLOWS
For  the  Years  Ended  December  31,  2004  and  2003

                                                                            2004           2003
                                                                     ------------    ----------
<S>                                                                          <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES
     Net  loss                                                       $  (838,017)     $  14,284
     Adjustments  to  reconcile  net  earnings  to  net
      cash  provided  (used)  by  operating  activities:
       Provision  for  deferred  taxes                                  (525,000)             -
       Depreciation                                                        6,403          3,360
       Amortization  of  Discounts  on  Notes  Payable                   117,914              -
       Stock  for  services                                               40,750              -
      Changes  in  Current  assets  and  liabilities:
       (Increase)  Decrease  in  Accounts  receivable                   (259,360)        13,364
       (Increase)  in  Inventories                                      (140,676)             -
       (Increase)  in  Prepaid  expenses                                  (2,734)             -
       (Increase)  Decrease  in  Officers  loans                         (53,371)      (26,402)
       (Increase)  in  Prepaid  employment  contracts                   (150,000)             -
       Increase  in  Accounts  payable                                   150,409         11,746
       (Decrease)  Increase  in  Accrued  payroll                        (50,448)        31,375
       (Decrease)  in  Withheld  and  accrued  taxes                     (64,936)      (27,385)
       Increase  (Decrease)  in  Unearned  revenue                       564,025      (138,000)
                                                                     ------------    ----------
       NET  CASH  PROVIDED  (USED)  BY
        OPERATING  ACTIVITIES                                         (1,205,041)     (117,658)

CASH FLOWS FROM INVESTING ACTIVITIES
       Purchase  of  Fixed  assets                                       (96,812)             -
       Increase  in  Goodwill                                           (148,761)             -
       Increase  in  Deposits                                            (38,180)             -
                                                                     ------------    ----------
       NET  CASH  (USED)  BY  INVESTING
       ACTIVITIES                                                       (283,753)             -

CASH FLOWS FROM FINANCING ACTIVITIES
     Sale  of  common  stock                                             615,000        250,000
     Sale  of  Warrants                                                  121,000              -
     Increase  in  Discounts  on  Convertible  Notes                    (524,805)             -
     Increase  in  Line  of  credit                                            -        250,000
     Payments  on  Line  of  credit                                     (205,400)     (100,000)
     Increase  in  Long  -  term  debt                                 2,500,000              -
     Payments  on  Long  -  term  debt                                  (294,536)      (78,981)
                                                                     ------------    ----------
     NET  CASH  USED  BY
     FINANCING  ACTIVITIES                                              2,211,259       321,019
                                                                     ------------    ----------

NET INCREASE (DECREASE) IN CASH                                           722,465       203,361
CASH ACQUIRED IN ACQUISITION                                                8,152             -
CASH AT BEGINNING OF PERIOD                                               306,500       103,139
                                                                     ------------    ----------
CASH AT END OF PERIOD                                                 $ 1,037,117     $ 306,500
                                                                     ============    ==========

See accompanying notes to financial statements.
</TABLE>

                                       29
<PAGE>

                             XA, INC.  AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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.  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 at the rate of $2.00 per share.

The Class A Warrants are exercisable 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.

                                       30
<PAGE>

                             XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

The  Warrants  must  be  exercised by no later than 180 days after the effective
date  of  the  registration,  or  before March 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 should terminate before  the end

                                       31
<PAGE>

                             XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

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 2004 for these
employment  agreements  was  $16,385.

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 on 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 all the 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-

                                       32
<PAGE>

                            XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

The  consolidated  financial statements include the accounts of The Experiential
Agency,  Nevada  and  G/M  Productions,  Inc.,  Illinois.  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  to  be  cash  equivalents.

Cash  paid  during  the  years  for:

                                                    2004     2003
     Interest                                     $9,521    $41,467
     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  200%  declining  balance  basis  over  their  estimated useful lives as
follows:

     Equipment                         5  years
     Furniture  and  fixtures          5  years

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.

                        XA, INC. AGENCY AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

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

               Recoverable  Federal              $420,000
               Recoverable  State                 105,000
                                                  -------
                    Total                        $525,000
                                                 ========

Management  believes  it is more likely than not that the long-term deferred tax
assets will reduce future income tax payments. Significant factors considered by
management  it  its  determination  of the probability of the realization of the
deferred  tax  benefits  include:  (a)  historical  operating  results,  (b)
expectations  of  future  earnings and (c) the value of the Company's assets and
related  gain if the Company should liquidate. The carry-forward periods for the
$1,200,000 of net operating losses 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.

CONCENTRATION OF CERTAIN RISKS
------------------------------

During  2004  and  at  December  31,  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  in  2004  was  $117,914.

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

On  December  1,  2003  the  Company renewed its Line of Credit agreement with a
bank.  The  note  for  $200,000  is due on demand, and if no demand is made, the
outstanding  balance  is  due  April  4, 2004.  Interest varies at 0.5% over the
Prime  Rate  as  published in the Wall Street Journal.  The rate at December 31,
2003  was  4.5%.  The  note  was paid in full on August 5, 2004.  The balance of
this  note  at  December  31,  2004  and  2003 was $0 and $200,000 respectively.

                                       33
<PAGE>

                              XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

On  May 1, 2002, the Company entered into a loan agreement with a local bank for
$417,000.  The  initial  interest rate on the loan was 5.25% that varies at 0.5%
over  the  Wall  Street  Journal  Prime Rate.  The rate at December 31, 2003 was
4.5%.  The loan calls for 60 monthly payments of $7,933 including interest.  The
loan is unsecured, however the bank has the right of offset in all the Company's
accounts  with  the  lender.  The  note was paid in full on August 5, 2004.  The
balance  of  this  note  at  December  31,  2004  and  2003  was $0 and $294,536
respectively.

On  August  12, 2004, the Company entered into a Line of Credit agreement with a
bank  for  $750,000.  The note is due August 12, 2005.  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,
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 either the holder or
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  have  agreed to purchase an additional $1,250,000 of convertible
promissory  notes within five days of the registration of the shares convertible
under  this  agreement.  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,  2004  was  $2,032,500.

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

                                         2004               2003
     Long-term  debt               $2,032,500           $294,536
     Less  Current  portion               -0-             (83,652)
                                          ---            ---------
     Long-term  debt               $2,032,500            $210,884
                                   ==========            ========

                                       34
<PAGE>

                            XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

Maturities  on  long-term  debt  at  December  31,  2004  are  as  follows:

          Year  ending               December  31,
              2004                  $          -0-
              2005                             -0-
              2006                       2,032,500
              2007                             -0-
              2008                             -0-

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.

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

On  December  3,  2004  the  shareholder  of  the  Company  increased  the total
authorized  shares  of common stock to 200,000,000 with a par value of $.001 per
share.  The  Company  had  3,516,249  shares  outstanding  at December 31, 2004.

The  Company had 52,600,016 pre-reverse split shares outstanding at December 31,
2003,  with  100,000,000  share  authorized.

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.

                                       35
<PAGE>

                             XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

Class B Warrants are to purchase 500,000 shares of the Company's common stock at
an  exercise  price  of $5.00 per share. They can be exercised up until 180 days
after  the effective date of a registration statement covering the shares of the
Company's  common  stock  convertible  under  the  Convertible  Promissory  Note
agreements.  The  warrants  are  valid  until  March  3,  2005.

NOTE  5  -  RELATED  PARTIES
----------------------------

The Company has from time to time made advances to its principal stockholder and
Chief  Executive  Officer. The advances are unsecured, and bear no interest. The
total  outstanding  under  this  informal  arrangement  was $-0- and $319,129 at
December  31,  2004  and  2003  respectively.

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.

                                       36
<PAGE>

                           XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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

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.

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.

                           XA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004

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.

Future  minimum  payments  due  under  these  lease  agreements  are as follows:
                    2004            $325,803
                    2005            $380,334
                    2006            $348,066
                    2007            $335,423
                    2008            $219,906

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  5,900,000  shares  of the Company's common stock.
These  shares  are  subject  to  the  risk  of  forfeiture.

                                       37
<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.  The Company's chief
     executive  officer  and  principal  financial officer, after evaluating the
     effectiveness  of  the  Company's  "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 (the
     "Evaluation  Date"),  have  concluded  that  as of the Evaluation Date, the
     Company's  disclosure controls and procedures were adequate and designed to
     ensure  that  material  information  relating  to  the  Company  and  its
     consolidated  subsidiaries  would  be  made  known to them by others within
     those  entities.

(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. Mr.
Goldstin  remains  the Company's Chairman of the Board and the Company continues
to  rely  upon  Mr. Goldstin's strategic guidance and creative direction. 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.

                                       38
<PAGE>

     Additionally, Mr. Goldstin entered into a new Employment Agreement with the
Company  on  February  17,  2005,  which will become effective on March 1, 2005,
under  which Mr. Goldstin will service as the Chairman of the Company's Board of
Directors  for a term of Twenty-Four (24) months at an annual salary of $100,000
per  year.  Under  the  new  Agreement,  the  Company is able to  terminate  the
Agreement  at  any  time  if  Mr.  Goldstin is negligent in his duties under the
Employment Agreement,  however,  in  the event of termination  for  good  reason
by Mr. Goldstin or without cause, the Company is obligated to pay Mr. Goldstin a
severance  payment of $50,000 in addition to all payments  of  salary  earned by
Mr.  Goldstin  through  such  date  of  termination  in one  lump  sum  payment.
Additionally, under the Employment Agreement, the Company shall maintain a lease
of  a  car  for  the use of Mr. Goldstin or shall provide a car allowance not to
exceed  $2,000  per  month  during  the  term  of  the  Agreement.

                                    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
----                 ---   --------                                -----
Frank Goldstin      37     Chief Executive Officer and Director    December 2003

Joseph  Wagner      39     President,  Chief  Operating  Officer,
                           Secretary  and  Director                August  2004

Jean  Wilson        44     Vice  President  of  Operations,
                           Treasurer  and  Director                August  2004

     Frank  Goldstin, age 37, founded the Company's wholly-owned subsidiary, G/M
Productions, inc., an Illinois corporation doing business as Experiential Agency
("XA"),  in 1991. Mr. Goldstin has served as the Company's CEO and as a Director
since  December  2003  after  the Company acquired XA. For the last 15 years Mr.
Goldstin  has  been  working  with  the  nation's  corporate  elite.  Under  his
direction,  the  Company provides a venue of discerning events uniquely designed
to  sell a product, market a corporate message or motivate clientele through the
highly  effective medium of special events. An expert in his craft, Mr. Goldstin
has  been  a  guest  speaker  at  industry functions and interviewed by numerous
publications  including  Chicago  Magazine,  Chicago Tribune, Chicago Sun Times,
North  Shore  Magazine, Crain's Chicago Business, Continental Airlines Magazine,
Tycoon, Special Events Magazine and Corporate And Incentive Travel. Mr. Goldstin
also  serves  as  a  leading  national  event  advisor, and he continues to make
numerous  guest  segment  appearances  on  television networks such as Bloomberg
Television,  MSNBC,  CBS, ABC and NBC speaking about various event and corporate
live  marketing  topics.  Mr. Goldstin began his career as director of sales for
the  Weiman  entertainment  group.

                                       39
<PAGE>

     Mr.  Goldstin resigned as the Company's Chief Executive Officer on February
17,  2005,  and  was  replaced  by  Joseph  Wagner.

     Joseph  Wagner  has  served  as  a consultant to the Company performing the
functions  of  President,  Chief  Operating  Officer,  and  Secretary,  and as a
Director  of  the  Company since August 2004. Mr. Wagner has worked for XA 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 February 2004. 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  has  served as the Company's Vice President of Operations and
Treasurer  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.

     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

FRANK  GOLDSTIN

                                       40
<PAGE>

     Frank  Goldstin  served  as  the Company's Chief Executive Officer and as a
director of the Company, during the period covered by the report, pursuant to an
employment  agreement  effective August 1, 2004, for a period of thirty-six (36)
months,  which  has  subsequently been replaced by another Employment Agreement.
Mr.  Goldstin  resigned as the Company's Chief Executive Officer on February 17,
2005,  and  entered  into a new Employment Agreement to serve as the Chairman of
the  Company's  Board  of  Directors.

     PRIOR  EMPLOYMENT  AGREEMENT

     Mr.  Goldstin's prior agreement, which was in effect during the time period
covered  by  this  report,  Mr.  Goldstin  was  to  receive $360,000 per year as
compensation and thirty (30) days of paid time off ("PTO"). The Company was also
obligated  to  maintain  a  director  and  officer  insurance policy of at least
$1,000,000  during the term of Mr. Goldstin's former employment agreement. Under
the prior agreement, the Company was able to terminate the employment agreement,
however,  in the event of termination for good reason by Mr. Goldstin or without
cause,  the  Company  was  obligated  to pay Mr. Goldstin a severance payment of
$150,000  in  addition  to all payments of salary earned by Mr. Goldstin through
such  date  of  termination  in  one  lump  sum  payment.

     NEW  EMPLOYMENT  AGREEMENT

     Mr.  Goldstin  entered  into a new Employment Agreement with the Company on
February 17, 2005, which will become effective on March 1, 2005, under which Mr.
Goldstin  will service as the Chairman of the Company's Board of Directors for a
term of Twenty-Four (24) months at an annual salary of $100,000 per year.  Under
the  new Agreement, the Company is able to  terminate  the Agreement at any time
if  Mr.  Goldstin  is  negligent  in  his duties under the Employment Agreement,
however,  in  the  event  of  termination  for  good  reason  by Mr. Goldstin or
without  cause, the Company is obligated to pay Mr. Goldstin a severance payment
of  $50,000  in  addition  to  all  payments  of  salary  earned by Mr. Goldstin
through  such  date  of  termination  in one  lump  sum  payment.  Additionally,
under  the Employment Agreement, the Company shall maintain a lease of a car for
the  use  of  Mr. Goldstin or shall provide a car allowance not to exceed $2,000
per  month  during  the  term  of  the  Agreement.

JOSEPH  WAGNER

                                       41
<PAGE>

     Joseph  Wagner,  a  director  of the Company, served as the Company's Chief
Operating  Officer  during the period covered by the report, and also served and
continues  to  serve  as  the  Company's  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.  In  the  event that Mr. Wagner's consulting agreement terminates before
December  31,  2005, or December 31, 2006, he must return to the Company 150,000
restricted  shares,  or 75,000 restricted shares, respectively, 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.

JEAN  WILSON

     Jean Wilson served as the Company's Vice President of Operations during the
period covered by this report and served and continues to serve as the Company's
Treasurer,  and as a director of the Company pursuant to an employment agreement
effective  August  1,  2004,  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,  and  thereafter.  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. In the event that Ms. Wilson's employment terminates
before  December 31, 2005, and December 31, 2006, she must return to the Company
45,000  restricted  shares, or 22,500 restricted shares, respectively, 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.

                                       42
<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,  and  Jean  Wilson  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.

ITEM  10.  EXECUTIVE  COMPENSATION

<TABLE>
<CAPTION>

                                               SUMMARY COMPENSATION TABLE
                                                  ANNUAL COMPENSATION

                                                                Other
                                                                Annual                                   LTIP    All Other
Name & Principal Payouts                               Bonus    Comp-      Restricted       Options    Payouts     Compen-
    Position               Year       Salary ($)       ($)     sation     Stock Awards       SARs       ($)        sation
<S>                       <C>            <C>           <C>       <C>          <C>             <C>       <C>         <C>
Frank  Goldstin  (1),     2004      $  360,000
CEO                       2003      $  200,000
                          2002      $   40,000

Joseph Wagner,            2004      $  200,000                              75,000(2)
President,  COO,
Secretary,  and  Director

Jean Wilson               2004      $  105,000                              25,000(3)
VP  Operations,
Treasurer,  and  Director

</TABLE>

                                       43
<PAGE>

*     Does  not  include perquisites and other personal benefits in amounts less
than  10%  of  the  total  annual  salary  and  other  compensation.

(1)     Frank Goldstin entered into a thirty-six (36) month employment agreement
with  the  Company effective August 1, 2004, pursuant to which Mr. Goldstin will
receive  compensation of $360,000 per year.  Subsequent to the period covered by
this  report,  Mr.  Goldstin  entered  into  a Twenty-Four (24) month employment
agreement  with  the Company which superceded the previous agreement he had with
the  Company,  and  which  will pay him $100,000 per year as the Chairman of the
Company's  Board  of  Directors.

(2)     Joseph  Wagner 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.  The  risk  of  forfeiture covering the remaining
150,000  shares  will  cease  to  exist  with  respect to certain amounts of the
restricted  shares  over  a  two-year period.  Mr. Wagner may engage in business
activities  or  interests  outside  of  the  Company  which  are  not adverse or
competitive  to  the  Company.

(3)     Jean  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.  The  risk  of  forfeiture covering the remaining
45,000  shares  will  cease  to  exist  with  respect  to certain amounts of the
restricted  shares  over  a  two-year  period.

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

     The  following  table  sets  forth  information  as  of  February 22, 2005,
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:

Name  and  Address                 Share  of  Common  Stock
of  Beneficial  Owners(1)          Beneficially  Owned  (2)          Percent(3)

Frank  Goldstin                        2,852,955  (4)                  60.2%

Joseph  Wagner                         2,149,364  (4)(5)               45.4%

Jean  Wilson                           1,860,163  (4)(6)               39.3%

Alpha  Capital  Aktiengesellschaft       682,500  (7)                  19.4%

Stonestreet  Limited  Partnership        420,000  (8)                  11.9%

All  officers  and  directors
as  a  group  (3  people)              6,862,483  (4)                  95.6%

                                       44
<PAGE>

(1)     The  business  address  of  the  beneficial owners is 875 North Michigan
Avenue,  Suite  2626,  Chicago,  Illinois  60611.

(2)     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.

(3)     Using  3,516,250  shares of Common Stock outstanding as of February 22,
2005.

(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
3,503,700  shares  of  common  stock, of which each of the three shares can vote
1,167,900  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 as provided in footnote (3)
of  this  table,  above.

(6)     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 as provided in footnote (3)
of  this  table,  above.

                                       45
<PAGE>

(7)     Represents  337,500  shares  of Common Stock issuable upon conversion of
Convertible  Notes,  115,000 shares of Common Stock underlying Class A Warrants,
and  230,000  shares of Common Stock underlying Class B Warrants.  Alpha Capital
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.

(8)     Represents  210,000  shares  of Common Stock issuable upon conversion of
Convertible  Notes,  70,000  shares of Common Stock underlying Class A Warrants,
and 140,000 shares of Common Stock underlying Class B Warrants.  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.

CHANGES  IN  CONTROL

     The  Company  does  not  anticipate  any changes in control of the Company.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

Advances

     From  April 2004 through July 2004, the Company advanced to Frank Goldstin,
the  Company's  Chief  Executive  Officer $32,739, which amount Mr. Goldstin has
since  repaid.  The  advances  were  unsecured,  and  bore  no  interest.

     On  March  11, 2004, the Company's Board of Directors approved a resolution
to  cancel 22,969 shares of the Company's Common Stock held by Frank Goldstin in
consideration  for  the  repayment  of  advances by the Company in the amount of
$367,500  based  on a conversion of approximately $16.00 per share.  The Company
cancelled the shares with its transfer agent in May 2004.  The Company has since
cancelled  the  shares  on  its  financial  books  and  records.

Employment  and  Consulting  Agreements

                                       46
<PAGE>

     Effective  August 1, 2004, the Company entered into an employment agreement
with  Frank  Goldstin,  which has since been replaced by a subsequent Employment
Agreement, 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.
Goldstin's agreement called for him to receive $360,000 per year as compensation
for  his  services as the Company's Chief Executive Officer and as a director of
the  Company.  Mr. Wagner will receive $200,000 per year as compensation for his
services  as  the  Company's  current  Chief  Executive Officer and former Chief
Operating  Officer  (during  the  period  covered by this report), 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.  The risk
of  forfeiture  covering  the  remaining 150,000 shares will cease to exist with
respect to certain amounts of the restricted shares over a two-year period.  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.  Beginning August 1, 2004, Ms. Wilson will receive
compensation  at  a  rate of $105,000 per year for her services as the Company's
Chief  Operating  Officer,  and  former Vice President of Operations (during the
period  of  covered by this report), Treasurer and as a director of the Company.
Ms.  Wilson  will receive compensation of $125,000 per year beginning on January
1, 2005.  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.  The risk of forfeiture
covering the remaining 45,000 shares will cease to exist with respect to certain
amounts  of  the  restricted  shares  over  a  two-year  period.

     On February 17, 2005, the Company entered into an Employment Agreement with
Frank Goldstin, which superceded and replaced his previous Employment Agreement.
Under  the  new Employment Agreement, Mr. Goldstin will serve as the Chairman of
the  Company's  Board  of  Directors for a period of Twenty-Four (24) months and
earn  a  salary of $100,000 per year.  For more information about this agreement
see  "Directors,  Executive  Officers,  Promoters  and  Control  Person", above.

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.

Subsequent  Events

     Subsequent  to the period covered by this report, Mr. Goldstin entered into
an Employment Agreement, which superceded and replaced his former agreement with
the  Company.  Under  the new Employment Agreement, effective March 1, 2005, Mr.
Goldstin  will  serve as Chairman of the Company's Board of Directors for a term
of  Twenty-Four  (24)  months,  with  an  annual  salary  of  $100,000 per year.

     In connection with Mr. Goldstin's new Employment Agreement with the Company
entered  into  on February 17, 2005, Mr. Goldstin and the Company entered into a
Leakout Agreement. Pursuant to the Leakout Agreement, Mr. Goldstin agreed not to
sell  any  of the Company's shares of Common Stock which he owns for a period of
Sixty  (60)  days from the date of the Leakout Agreement, February 17, 2005, and
that  after  the  expiration  of  Sixty  (60)  days from the date of the Leakout
Agreement  Mr.  Goldstin  will sell no more than Ten Thousand (10,000) shares of
the  Company's  Common Stock per month while the Leakout Agreement is in effect.
Mr. Goldstin also agreed to not sell any shares of the Company's Common Stock in
the  Twenty  (20) day periods surrounding the release of the Company's Quarterly
reports  and  the Thirty-Five (35) day period surrounding the date the Company's
Annual  report  will be released. The Leakout Agreement shall be in effect until
February  18,  2007.

     Mr.  Wagner  and  Ms.  Wilson  have  agreed  to accrue $25,000 and $10,000,
respectively  of  their  salary for March through April of 2005.  Mr. Wagner and
Ms.  Wilson  will  be  paid  the  accrued  amounts  in  June  2005.

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

3.4(3)            Bylaws

10.1(6)           Subscription  Agreement  dated  June  30,  2004

10.2(6)           Convertible  Note

10.3(6)           Common  Stock  Purchase  Warrant  A

10.4(6)           Common  Stock  Purchase  Warrant  B

10.5(6)           Employment  Agreement  with  Frank  Goldstin

10.6(6)           Consulting  Agreement  with  Joseph  Wagner

10.7(6)           Employment  Agreement  with  Jean  Wilson

10.8(7)           Voting  Agreement  between  Joseph  Wagner  and Frank Goldstin

10.9(7)           Voting  Agreement  between  Jean  Wilson  and  Frank  Goldstin

10.10(8)          Fiori  Asset  Purchase  Agreement

10.11*            Frank  Goldstin  Employment  Agreement

10.12*            Agreement  with  David  Loev

                                       47
<PAGE>

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 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.

     (7)  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.

     (8)  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.

*     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 9, 2004, to report that the Company had
          filed  a  Certificate of Amendment to its Articles of Incorporation to
          affect a name change, increase its authorized shares, affect a reverse
          stock  split,  and  reauthorize  the  par  value  of its common stock.

                                       48
<PAGE>

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)  Form  8-K filed on January 5, 2005, to report that the Company entered
          into  an  Asset Acquisition Agreement to purchase substantially all of
          the  assets  of  Musters  &  Company, Inc., to report that the Company
          filed  a  Certificate of Designations for Series A Preferred Stock and
          to  report  that  the  Company  issued  three  (3)  shares of Series A
          Preferred  Stock.

ITEM  14.  PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES

AUDIT  FEES

The  aggregate  fees billed for each of the fiscal years ended December 31, 2004
and  2003 for professional services rendered by the principal accountant for the
audit  of  the  Company's annual financial statements was $ 10,000 and $ 15,000,
respectively.  The  aggregate  fees  billed  for  each of the fiscal years ended
December  31,  2004 and 2003 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  $  -  0  -  and  $  5,000,  respectively.

AUDIT  RELATED  FEES

None.

TAX  FEES

None.

ALL  OTHER  FEES

The  aggregate  fees  billed  for  each  of  the fiscal years ended December 31,
2003  and  2004  for products and services provided by the principal accountant,
other  than  the  services  reported  above  was  $ - 0 - and  $ 9,000,
respectively.

                                       49
<PAGE>

                                 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:  February    24,  2005                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       February   24,  2005
----------------------
Joseph  Wagner

/s/  Jean  Wilson       Principal  Financial  Officer   February   24, 2005
----------------------
Jean Wilson
                                       50
<PAGE>