U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                                   (MARK ONE)
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 002-41703

                            THE X-CHANGE CORPORATION
                     (EXACT NAME OF SMALL BUSINESS ISSUER AS
                            SPECIFIED IN ITS CHARTER)

                     NEVADA                              90-0156146
--------------------------------------------------------------------------------
             (STATE OR OTHER JURISDICTION               (IRS EMPLOYER
         OF INCORPORATION OR ORGANIZATION)           IDENTIFICATION NO.)


                          2305 CEDAR SPRINGS, SUITE 275
                                DALLAS, TX 75205
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (972) 747-0051
                            ISSUER'S TELEPHONE NUMBER

                100 ALLENTOWN PARKWAY, SUITE 110, ALLEN, TX 75002
                                (FORMER ADDRESS)

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         STATE THE NUMBER OF SHARES  OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON EQUITY, AS OF THE LATEST PRACTICAL DATE: SEPTEMBER 30, 2004 13,602,000


         TRANSITIONAL  SMALL BUSINESS  DISCLOSURE FORMAT (CHECK ONE). YES ; NO X









<PAGE>





                                     PART I
ITEM 1.  FINANCIAL STATEMENTS

                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                               (Unaudited)
                                                                              September 30,         December 31,
                                                                                  2004                  2003
                                                                           -------------------  --------------------
ASSETS
<S>                                                                        <C>                  <C>
Current Assets:                                                            $                 -  $                  -
                                                                           -------------------  --------------------


TOTAL ASSETS                                                               $                 -  $                  -
                                                                           ===================  ====================

LIABILITIES
Current Liabilities:
     Accounts Payable                                                      $                 -  $                926
                                                                           -------------------  --------------------
Total Current Liabilities                                                                    -                   926
                                                                           -------------------  --------------------


TOTAL LIABILITIES                                                                            -                   926
                                                                           -------------------  --------------------

STOCKHOLDERS' EQUITY (DEFICIT)
     Preferred Stock, Par Value $.001,
       Series A Convertible - 5,000,000 Shares Authorized,
       0 Issued at September 30, 2004 and
       December 31, 2003                                                                     -                     -
     Common Stock, Par value $.001, Authorized
       100,000,000 Shares, Issued 13,602,000 and
       13,002,000 at September 30, 2004 and
       December 31, 2003                                                                13,602                13,002
     Common Stock to be Issued, 15,000 and 0                                                15                     -
     Paid-In Capital                                                                   657,181               580,796
     Retained Deficit                                                                 (536,688)             (536,688)
     Deficit Accumulated During Development Stage                                     (134,110)              (58,036)
                                                                           -------------------  --------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                         -                  (926)
                                                                           -------------------  --------------------

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)                                                           $                 -  $                  -
                                                                           ===================  ====================
</TABLE>

                             See accompanying notes

                                       F-2

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                              Cumulative
                                                                                                                Since
                                                                                                              October 4,
                                                                                                                 2000
                                              For the Three Months Ended     For the Nine Months Ended       Inception of
                                                September 30,                      September 30,             Development
                                            2004             2003             2004             2003             Stage
                                      ---------------- ----------------- --------------- ----------------- ----------------

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

Expenses
   General & Administrative                      4,575               626           8,759             6,976           66,795
                                      ---------------- ----------------- --------------- ----------------- ----------------

Net Loss from Continuing
   Operations                                   (4,575)             (626)         (8,759)           (6,976)         (66,795)
                                      ---------------- ----------------- --------------- ----------------- ----------------

Discontinued Operations
   Loss on Sale of AirGate                     (67,315)                -         (67,315)                -          (67,315)
                                      ---------------- ----------------- --------------- ----------------- ----------------

          Net Loss                    $        (71,890)$            (626)$       (76,074)$          (6,976)$       (134,110)
                                      ================ ================= =============== ================= ================

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

Weighted Average Shares
  Outstanding                               17,102,000        22,540,000      15,379,635        22,540,000
                                      ================ ================= =============== =================
</TABLE>






                             See accompanying notes

                                       F-3

<PAGE>




                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                            Cumulative
                                                                                                               Since
                                                                                                            October 4,
                                                                                                               2000
                                                                       For the Nine Months Ended           Inception of
                                                                             September 30,                  Development
                                                                 --------------------------------------
                                                                        2004                2003               Stage
                                                                 ------------------  ------------------  -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                 ------------------  ------------------  -----------------
<S>                                                              <C>                 <C>                 <C>
Net Loss                                                         $          (76,074) $           (6,976) $        (134,110)

Adjustments to reconcile net loss to
  net cash Provided by operating activities:
      Stock Issued for Services                                               3,000                   -              3,000

Change in Operating Assets and Liabilities:
Net Loss from Discontinued Operations                                        67,315                   -             67,315
Increase (Decrease) in Accounts Payable                                        (926)              6,351             29,095
                                                                 ------------------  ------------------  -----------------

Net Cash Used in Operating Activities                                        (6,685)               (625)           (34,700)
Net Cash From Discontinued Activities                                         6,685                   -              6,685
                                                                 ------------------  ------------------  -----------------

Net Cash Used in Operating Activities                                             -                (625)           (28,015)
                                                                 ------------------  ------------------  -----------------

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

CASH FLOWS FROM FINANCING ACTIVITIES:
     Capital Contributed                                                          -                 625             28,015
                                                                 ------------------  ------------------  -----------------

Net Cash Provided by Financing Activities                                         -                 625             28,015
                                                                 ------------------  ------------------  -----------------


Net (Decrease) Increase in Cash                                                   -                   -                  -
Cash at Beginning of Period                                                       -                   -                  -
                                                                 ------------------  ------------------  -----------------

Cash at End of Period                                            $                -  $                -  $               -
                                                                 ==================  ==================  =================
</TABLE>





                                       F-4

<PAGE>





                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                            Cumulative
                                                                                                               Since
                                                                                                            October 4,
                                                                                                               2000
                                                                       For the Nine Months Ended           Inception of
                                                                             September 30,                  Development
                                                                 --------------------------------------
                                                                        2004                2003               Stage
                                                                 ------------------  ------------------  -----------------


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the year for:
<S>                                                              <C>                 <C>                 <C>
  Interest                                                       $                -  $                -  $               -

  Franchise and income taxes                                     $                -  $                -  $               -
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
----------------------------------------------------------------------

None.




















                             See accompanying notes

                                       F-5

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of  accounting  policies for The X-Change  Corporation  (A
Development Stage Company) is presented to assist in understanding the Company's
financial  statements.  The accounting  policies  conform to generally  accepted
accounting  principles and have been consistently  applied in the preparation of
the financial statements.

Nature of Operations and Going Concern

         The accompanying  financial  statements have been prepared on the basis
of accounting principles applicable to a "going concern",  which assume that the
Company  will  continue in  operation  for at least one year and will be able to
realize  its assets  and  discharge  its  liabilities  in the  normal  course of
operations.

         Several conditions and events cast doubt about the Company's ability to
continue  as  a  "going  concern".  The  Company  has  incurred  net  losses  of
approximately  $134,000  for the  period  from  October  4, 2000  (inception  of
development stage) to September 30, 2004, has a liquidity problem,  and requires
additional  financing in order to finance its business  activities on an ongoing
basis.  The  Company is  actively  pursuing  alternative  financing  and has had
discussions  with various third parties,  although no firm commitments have been
obtained. In the interim,  shareholders of the Company have committed to meeting
its minimal operating expenses.

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

         These  financial  statements do not reflect  adjustments  that would be
necessary  if the Company  were unable to continue as a "going  concern".  While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be successful.

         If the  Company  were unable to  continue  as a "going  concern",  then
substantial adjustments would be necessary to the carrying values of assets, the
reported  amounts of its  liabilities,  the reported  expenses,  and the balance
sheet classifications used.






                                       F-6

<PAGE>




                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

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

Interim Reporting

         The unaudited financial statements as of September 30, 2004 and for the
three and nine month period then ended,  reflect,  in the opinion of management,
all adjustments (which include only normal recurring  adjustments)  necessary to
fairly state the financial  position and results of operations for the three and
nine  months.   Operating  results  for  interim  periods  are  not  necessarily
indicative of the results which can be expected for full years.

Organization and Basis of Presentation

         The Company was incorporated under the laws of the State of Delaware on
February  5,  1969  as  Diversified   Technologies   Group,  Inc.,  the  Company
reincorporated  and  changed  its  domicile to the State of Nevada on October 4,
2000. The Company on December 1, 1999, entered into an agreement (Reorganization
Agreement) to acquire all of the  outstanding  capital stock of S&J  (Chatteris)
Holdings Limited, a United Kingdom  corporation (S&J Holdings).  Pursuant to the
Reorganization  Agreement,  the Company agreed to acquire all of the outstanding
capital stock of S&J in exchange for shares of Common Stock. The  Reorganization
Agreement  required S&J Holdings to perform  certain  conditions,  including the
delivery  of  audited  financial  statements.  These  conditions  had  not  been
fulfilled by February 14, 2000;  therefore,  the  agreement  was  rescinded  and
deemed  to  have  been  void  and of no  effect  from  the  beginning  as if the
acquisition had not occurred. All shares issued in the acquisition were returned
to treasury.  The Company also attempted two  acquisitions  in 2000,  neither of
which were able to deliver  the  required  financial  statements.  The first was
rescinded and the second was not consummated.  In June 2001, the Company entered
into a reorganization  agreement that was later rescinded for failure to provide
adequate  compliance with the  representations,  warranties and covenants of the
agreement.  In  July  2001,  the  Company  changed  its  name  to  The  X-Change
Corporation.

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

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

                                       F-7

<PAGE>




                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

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

Organization and Basis of Presentation (Continued)

in the Company to Michael Sheriff.

         In June  2004,  the  Company  formed  two  wholly  owned  subsidiaries,
Innovative Telecommunication Technologies, Inc. (ITT) and OIL ID Systems, Inc.

Nature of Business

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

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

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




                                       F-8

<PAGE>




                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

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

Principals of Consolidation

         The  consolidated  financial  statements  include the  accounts for The
X-Change  Corporation and its wholly owned  subsidiaries  AirGate  Technologies,
Inc., Innovative Telecommunication  Technologies, Inc. (ITT) and OIL ID Systems,
Inc. The results of subsidiaries  acquired during the year are consolidated from
their effective dates of acquisition.  All significant intercompany accounts and
transactions   have  been  eliminated.   On  September  30,  2004,  the  AirGate
Technologies was sold and thus is not included in the consolidation.

Cash and Cash Equivalents

         For the purpose of  reporting  cash flows,  the Company  considers  all
highly liquid debt  instruments  purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Concentrations of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Stock Compensation for Non-Employees

         The  Company  accounts  for the fair  value of its  stock  compensation
grants for  non-employees  in accordance with FASB Statement 123. The fair value
of each grant is equal to the market price of the Company's stock on the date of
grant if an active  market  exists or at a value  determined  in an arms  length
negotiation between the Company and the non-employee.

                                       F-9

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

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

Earnings (Loss) per Share

         Basic loss per share has been  computed  by  dividing  the loss for the
year  applicable to the common  stockholders  by the weighted  average number of
common  shares  outstanding  during  the  years.  The  effects  of common  stock
equivalents are anti-dilutive and thus are not considered.

NOTE 2 - INCOME TAXES

         As  of  December  31,  2003,  the  Company  had a  net  operating  loss
carryforward for income tax reporting  purposes of  approximately  $594,123 that
may be offset against future taxable income through 2021. Current tax laws limit
the amount of loss  available to be offset  against future taxable income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carryforwards  will expire  unused.  Accordingly,  the potential tax
benefits of the loss  carryforwards  are offset by a valuation  allowance of the
same amount.

NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN

         As is common  with a  development  stage  company,  the Company has had
recurring losses during its development stage.  Continuation of the Company as a
going  concern is  dependent  upon  obtaining  the  additional  working  capital
necessary to be successful in its planned  activity,  and the  management of the
Company has  developed  a  strategy,  which it  believes  will  accomplish  this
objective through additional equity funding and long term financing,  which will
enable the Company to operate for the coming year.

NOTE 4 - COMMITMENTS

         As of  September  30,  2004,  all  activities  of the Company have been
conducted from corporate  officers  either from their home or business  offices.
There are no commitments for future use of the facilities.




                                      F-10

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

NOTE 5 - PREFERRED STOCK

         The Company has  authorized a total of  10,000,000  shares of Preferred
Stock.  Series A Convertible  Preferred Stock is the initial series of Preferred
Stock. This series shall consist of 5,000,000 shares with a par value of $.001.

         The  Corporation  is under no  obligation to pay dividends or to redeem
the Series A Convertible  Preferred  Stock.  This series of stock is convertible
into 10  shares  of  Common  Stock  at the  option  of the  shareholder  or upon
automatic conversion.

         In the  event of any  liquidation,  dissolution  or  winding-up  of the
Corporation,  the holders of outstanding  shares of Series A Preferred  shall be
entitled  to be  paid  out  of  the  assets  of the  Corporation  available  for
distribution to  shareholders,  before any payment shall be made to or set aside
for holders of the Common Stock, at an amount of $1 per share.

         As of September 30, 2004, there are no preferred shares issued.

NOTE 6 - STOCK TRANSACTIONS

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

         On March 15, 2004, the Company acquired furniture and fixtures totaling
$9,000 for 15,000 shares of common stock.  As of June 30, 2004,  the Company has
not issued these shares.

         On April 2, 2004, the Company issued 100,000 shares of common stock for
consulting services. The shares were valued at $0.53 per share.

         On April  26,  2004,  the  Company's  president  surrendered  his stock
options  contract for  12,000,000  common shares in exchange for the issuance of
4,000,000  shares of restricted  common stock.  The shares are  restricted for 2
years.  In  connection  with  issuance  of the shares,  $15,000 was  recorded as
consulting expense.

         On September 30, 2004,  the Company sold 100% of its AirGate,  a wholly
owned  subsidiary,  shares in  exchange  for return of  3,500,000  of its common
shares. These shares were returned to treasury and subsequently canceled.




                                      F-11

<PAGE>



                            THE X-CHANGE CORPORATION
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)
                                   (Unaudited)

NOTE 7 - CONTINGENCIES

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

NOTE 8 - MERGER/ACQUISITION

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

         On March 13, 2003,  the Company  rescinded its agreement  with X-Change
Technologies.  The  rescission,  essentially,  resulted  in  the  return  of all
X-Change  Corporation's  assets in exchange for the surrender of all  securities
held by the former  X-Change  Technologies  shareholders  in the Company and the
assumption by X-Change  Technologies Corp. of all the Company's debt immediately
prior to closing. The rescission effected a change in control over the business,
policies  and affairs of the Company  from the  X-Change  shareholders  to those
shareholders  holding  securities in the Company prior to January 15, 2002. As a
result,  15,062,000  shares of common  stock and  5,000,000  shares of preferred
stock were  returned to treasury  and the Company now has  22,540,000  shares of
common stock, which was the amount  outstanding  immediately prior to closing of
the X- Change  Technologies  Corp.  acquisition on January 15, 2002. All lock-up
agreements pertaining to these shares were released effective with the closing.

NOTE 9 - SUBSEQUENT EVENTS

         On  September  30,  2004,  the Company  entered  into a share  purchase
agreement  with Kolt Oil and Gas, a Texas  Corporation,  whereby it will acquire
the business, operations and prospects of Kolt Oil & Gas for 2,500,000 shares of
common stock. The acquisition is expected to close November 19, 2004.


                                      F-12

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This discussion should be read in conjunction with  Management's  Discussion and
Analysis of  Financial  Condition  and Results of  Operations  in the  Company's
annual report on Form 10-KSB for the year ended December 31, 2003.

PLAN OF OPERATION

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

MANAGEMENT

DEAN L. ELLIOTT

Dean L. Elliott  holds a Bachelor of Arts degree from the  University  of Texas.
Mr. Elliott has over 25 years experience in the oil and gas industry.  The first
15 years was spent in the crude oil marketing division of Tesoro Petroleum Corp.
(NYSE),  Mitsuri & Co. (NYSE) subsidiary of Avant Petroleum and Adams Resources,
Inc. (AMEX) subsidiary  Gulfmark Energy,  Inc. where the negotiated purchase and
sales and  logistics  movements  of  millions  of barrels  of oil.  From 1991 to
present,  Mr. Elliott has acted as president of  Independent  oil Companies Kolt
Oil & Gas, Inc. and PRL Oil Company, Inc. His responsibilities  include seeking,
securing,  and overseeing  exploration projects,  producing oil and gas property
acquisitions,  raising necessary capital from private investors,  supervision of
pumpers,  field  personnel,  administrative  staff  dealing with  entering  into
contacts and all other aspects of operations from prospects to pipeline.

BERT MAXWELL

Mr. Maxwell has been actively involved in all aspects of corporate financing for
the last 25 years.  Mr.  Maxwell has been  responsible  for providing 30 million
dollars in private  investment in the oil & gas industry over the past 10 years.
Previously to his participation in the oil & gas industry,  Mr. Maxwell arranged
financing for the real estate industry  totaling 2 billion dollars and consulted
and  advised  on every  aspect of the  transaction.  Mr.  Maxwell  attended  the
University of North Texas.

                                      F-13

<PAGE>




ROBERT BARBEE

Robert  Barbee holds a Business  Degree from Kilgore  College in 1992. He has 13
years  experience  in oil and gas  operations  having  worked with a fortune 500
energy companies  supervising  field operations with production if 1,000 barrels
of oil per day in the East Texas Field Mr. Barbee currently operates over 30 oil
and gas  wells  in East  Texas  for Kolt oil and  gas,  Inc.  while  maintaining
executive  position  with Oil  Patch  and  Supply  Company,  a large  oil  field
distributor  to major and large  independent  oil and gas operations in Kilgore,
Texas.


MICHAEL P. MCINERNEY

Michael P.  McInerney  joined the company on October  21, 2004 as a  consultant,
through his company Energy  Advisors,  Inc., and will be coordinating  corporate
development.  Mr.  McInerney  brings 30 years  experience  to the  company  with
emphasis on North American oil & natural gas markets and foreign exploration and
production.  Past experience includes executive officer positions with two major
New York Stock Exchange listed companies,  overseeing corporate  development and
investor  relations  and  serving  on the board of  directors  of  Canadian  and
European subsidiaries of US based international energy concerns.

In 1994,  Mr.  McInerney  formed Energy  Advisors,  Inc.,  an energy  consulting
concern,   representing  U.S.  and  international   exploration  and  production
companies.  Mr. McInerney  conducted meeting,  developed  presentation  material
coordinated  field  trips to the Far East,  U.S.  and  Canada,  Europe and South
America for  institutional  investors and was  successful  in arranging  private
investor financing.

Mr. McInerney holds a BBA from the University of Michigan and is a member of the
American   Institute  of  Certified  Public   Accountants.   His   distinguished
credentials included past President of Petroleum Investor Relations  Association
and Institute of Management Accountants.  He is highly regarded by his peers and
his  outstanding  achievements  and  long  time  contacts  will  compliment  and
contribute  significantly to the goals set forth for the continued future growth
and success of The X- Change Corporation.

BILL BOTTO

William  (Bill)  Botto  holds  degrees  in both  Biology,  with an  emphasis  in
microbiology, and Petroleum Geology. Mr. Botto is also a Registered Professional
Geologist in the state of Texas.

Mr. Botto has over 23 years experience in the oil & gas industry. His experience
ranges from

                                      F-14

<PAGE>



frontier  exploration in the East Texas  Cretaceous  carbonates and sands to the
tertiary  sands of offshore  Texas and  Louisiana.  He has worked for Placid Oil
Co., Sage Energy Co., and SPG Exploration. In 1991 he co-founded Micro-TES, Inc.
Micro-TES'  primary  focus is designing  biological  products for  enhancing oil
production  (Microbial  Enhanced  Oil  Recovery,  "MEOR"),  bioremediation,  and
related products.

Currently he is involved in oil recovery projects in the USA, China, Russia, and
the Athabasca TAR sands in western Canada.

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

OIL ID SYSTEMS, INC.

In June 2004, the Company formed a new subsidiary,  OIL ID Systems,  Inc. OIL ID
Systems,  Inc. is an independent oil & gas  exploration  and production  company
with headquarters in Dallas,  Texas. The principals involved in the company have
25 years  of  experience  in the  marketing  of and  exploration  for  petroleum
products and services.

Demand for radio frequency  identification solutions by energy producers and oil
field service companies led the Company to create OIL ID Systems as a compliment
to its oilfield operations.

Radio  Frequency  Identification  is a technology  that employs  miniature radio
transmitters in conjunction with  microprocessors  that can be utilized to track
oil  movement  and  migration  and  will be a  valuable  tool in  assessing  and
identifying  producing oil & gas formations  prior to  fracturing.  The level of
demand for RFID systems in producing oil fields around the world is on the rise,
and OIL ID Systems will assist in discovering additional oil and gas reserves.

Dean Elliott,  a twenty-five  year veteran of the petroleum  industry,  has been
named President of the new subsidiary.

The Company had $4,575 and $8,759 in general and administrative expenses for the
three and nine month periods ended September 30, 2004,  respectively and for the
same  periods  in 2003  were  $626 and  $6,976.  The  increase  in  general  and
administrative expenses is due to the fact that the company was dormant for most
of 2003, and has just started working on a business plan. For the three and nine
months ended September 20, 2004 and 2003, the Company had no revenues. Losses on
operations  will  continue  until  sufficient  revenues can be achieved from the
various business units of the company.



                                      F-15

<PAGE>



RESULTS OF OPERATIONS

         The  Company  had  $4,575  and  $8,759 in  general  and  administrative
expenses  for the  three  and nine  month  periods  ended  September  30,  2004,
respectively and for the same periods in 2003 were $626 and $6,976. The increase
in general  and  administrative  expenses  is due to the Company was dormant for
most of 2003, and has just started working on a business plan. For the three and
nine months  ended  September  30, 2004 and 2003,  the Company had no  revenues.
Losses on operations  will continue  until  sufficient  revenues can be achieved
from the various business units of the Company.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2004 and December 31, 2003, the Company had no assets.
The Company had a net working capital  (deficit) of $0 at September 30, 2004 and
($926) at December 31, 2003.

         Net  stockholders'  equity  (deficit)  in the  Company was and $0 as of
September 30, 2004 and ($926) at December 31, 2003.

         The  Company  continues  to  seek  strategic  alternatives,   including
discussions  with joint  venture  partners and  investors.  On May 9, 2004,  the
Company  signed a revolving  line of credit  promissory  note for $500,000  with
certain shareholders.  The accompanying quarterly financial statements have been
prepared  assuming the Company will continue as a going  concern.  The Company's
ability to continue as a going concern, however, is dependent upon the Company's
ability to implement its business objectives in order to generate cash flow.

ITEM 3.  CONTROLS AND PROCEDURES

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

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

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

         There  have  been no  significant  changes  in the  Company's  internal
controls or in other factors since the date of the Chief Executive Officer's and
Chief Financial Officer's evaluation that could

                                      F-16

<PAGE>



significantly  affect these internal controls,  including any corrective actions
with regards to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None

ITEM 2.  CHANGES IN SECURITIES

         On September 30, 2004,  the Company sold 100% of its AirGate,  a wholly
owned  subsidiary,  shares in  exchange  for return of  3,500,000  of its common
shares. These shares were returned to treasury and subsequently canceled.
Item 3.  Defaults Upon Senior Securities

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5.  OTHER INFORMATION

On September 30, 2004,  Michael  Sheriff  resigned  President,  Chief  Executive
Officer , Treasurer  and Chairman and Dean Elliott was  appointed as new CEO and
President and Robert Barbee and Bert Maxwell were  appointed as new directors of
the Company.

On September 30, 2004, the Company entered into a share purchase  agreement with
Kolt Oil and Gas, a Texas  Corporation,  whereby it will  acquire the  business,
operations and prospects of Kolt Oil & Gas for 2,500,000 shares of common stock.
The acquisition is expected to close November 19, 2004.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         EXHIBITS

         The following exhibits are included as part of this report:

Exhibit
Number            Title of Document

                                      F-17

<PAGE>


31       Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

32       Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

         REPORTS

         No reports were filed on Form 8-k for the quarter ending  September 30,
2004.








































                                      F-18

<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized this November 15, 2004

                            THE X-CHANGE CORPORATION
                                  (Registrant)




DATE: November 15, 2004                       By:/s/     Dean Elliott
     -------------------------------          ------------------------------
                                              Dean Elliott, President, Chief
                                              Executive Officer and Chairman
                                              (Principal Executive Officer)


                                              By: /s/ Bert Maxwell
                                              Bert Maxwell, Secretary/Treasurer
                                              (Principal Executive Officer)

















                                      F-19